3 important lessons from this bear season
I started my day by going through the market and the reds were alarming. As of yesterday, I thought we wouldn't go lower than 43k. Then I woke up to BTC at 41.9k. I felt a kind of way and was thinking of the next best option.
I already had some stables stashed in my savings. So I bought some BTC and CAKE.
I learnt 3 major lessons from this particular bear period.
1. Have a spare backup fund for buying the dip.
The importance of this first point cannot be overemphasized. A lot of people risk it all and when the bear comes, they are not able to attack it back with enough capital.
Having a backup fund in stables, helps your portfolio to withstand heavy bear markets.
I am of the view that when investing, 50% of the total capital should be in stable currencies.
So when a bear market as this comes, you can use 50% of the backup fund.
In summary, having a backup in stables help to cushion the effect of a bear market and also helps with capital for buying the dip.
2. Buy your coins like you buy your groceries and not like the way you buy your perfumes.
I remember the years I use to follow my mom to the market, and she will beat down the price of what she wanted to buy by 59%.
At times, I get very embarrassed when she does that but at the end of the day, she gets it for a very mysteriously cheap price.
This should also be the case when investing in cryptocurrencies.
A few days ago, I put up an order to buy BTC at 46500 and when it was at 48k.
After about two days it was ranging between 46800 and 47k.
I got tired of waiting and bought BTC at 46700. Two days later, BTC dropped to 43k and today it I at 41.9k
What I am trying to say is, when buying a cryptocurrency, determine its intrinsic value and then buy at that price.
In essence, buy it for its worth and not the hype.
3. Know your risk capacity.
A lot of people make silly risks. I had a colleague who use this whole salary on a shit coin and the shitcoin went down by over 70%.
It was crazy to me. I mean why would you do that.
I remember back in 2017 when I thought bitcoin was going to hit 50k that year.
I put 80% of my savings there and BTC went to 6k. I sold off at a loss.
The most important thing in crypto is risk management and long term view.
Many people just feel investing in crypto is a get rich quick scheme.
Today BTC is on 41.9k and a lot of people are saying shit about bitcoin instead of trying to buy in at this cheap price.
The funny thing is they decide to buy when Bitcoin hits an ATH and the hype is everywhere.
Final words
I think it's time to get in and buy some more coins with use case and value.
I will be focusing on BTC, CAKE, HIVE, and CUB
Thank you for reading.
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