Those who decided to bet on Bitcoin earlier this year have seen their investment fall by more than 38%. Global factors have led cryptocurrencies and other riskier assets to come under pressure and sustain depreciation. Bitcoin hit a high of $67,729 at the end of last year, showing 3.4% growth over the past five years. However, 2022 has taken its toll on those gains. Although analysts raised $30,000 as a key threshold, the fall of the main electronic currency dragged down the crypto universe along with crypto investors, leading to a crypto crash. Almost half of the current year has gone by and the crypto market has already lost around $1,000 million.

According to some experts, this digital exchange market is on the verge of '<a href="https://www.cryptoknowmics.com/news/why-you-should-not-buy-yet-in-this-crypto-winter/">crypto winter</a>,' a term crypto investors use to refer to a sustained depreciation in the price of digital currencies, which can lead to a possible crypto crash. Cryptocurrencies have fallen to a greater extent due to the complex macroeconomic context, the high level of inflation, and the increase in interest rates by the Federal Reserve, which have strongly affected all markets.

Bitcoin currently has a remarkable correlation with the US stock market indices, particularly the Nasdaq, as it is a technology sector. For this same reason, cryptos have fallen in price, according to Andrés Hoyos, co-founder of <a href="https://www.tradematesports.com/">TradeMate</a>.
<h2>Main Recommendation</h2>
The main recommendation is to wait and closely monitor the virtual currency market to identify how quickly risk appetite can stabilize. In addition to monetary policy, there is a link of this scenario to the prudence of investors <a href="https://www.cryptoknowmics.com/news/impact-of-russia-ukraine-war-on-cryptocurrency-market">due to fear of the war in Ukraine</a> and the ban in China as a result of the increase in covid-19 cases. When there is a global risk, the first assets that feel the hit are those with the highest risk, such as technology stocks or cryptos.

Experts say it is a matter of time before larger losses materialize as speculators abandon their positions. According to Santiago Harker, CEO of the same company, the crypto winter begins when it reaches its maximum limit and then enters a corrective phase. Harker said,

“Previously, this corrective phase has lasted one year, until the bullish cycle begins. It should be clarified that due to the current macroeconomic conditions, the price of this market could be negatively affected, possibly extending the bearish period a little more.”
<h2>The Contrast</h2>
In contrast, other experts see an economic bubble in this market since the price of these currencies could shoot up unnaturally, reaching values ​​much higher than the logical ones. Santiago Vélez, cryptocurrency investor and co-founder of Universo Crypto, said,

"I believe in bitcoin. For me, the rest of the cryptos are technological projects and are even bubbles that have the potential to explode. That is, 99% of the cryptocurrencies that exist today will not exist in five years."

In addition to the vulnerability in computer security, these currencies have a disadvantage compared to other assets since no one is obliged, by law, to accept them.

What Decision Should Crypto Investors Make In The Event of a Crypto Crash?

Right now, the best thing to do is to wait and closely monitor the virtual currency market to identify how the risky appetite can stabilize, according to analysts. However, Edward Moya, senior market analyst at Oanda, said,

"If the latter does not happen soon, the rises for bitcoin and its peers look distant. But the solution will not be to go out and sell in desperation either. The best decision is to wait, and at the same time, buy in small quantities to take advantage of future gains that are not very clear in the short term."

According to the global crypto adoption index, Colombia is 11th by ranking and fourth in peer-to-peer transactions. Before March 2021, if a Colombian wanted to invest in bitcoin or some other digital currency, they had exposure to risks such as scams. For this reason, the <a href="https://www.superfinanciera.gov.co/jsp/index.jsf">Financial Superintendence of Colombia (SFC)</a> allocated its Arenera space for a pilot in which nine alliances participate. They comprise a financial entity supervised by the control entity and an active crypto exchange platform. According to Andrés Moreno, a financial and stock market analyst,

“The recommendation has always been that no more than 10% of the available capital be allocated to invest in this type of asset."
<h2>How Can Big-Time Crypto Investors Cope With a Crypto Crash?</h2>
Below are different tips to make the best decisions during a crypto crash.
<h3>Don't Try to Guess When to Buy or Sell</h3>
Whatever you do, don't try to guess what will happen in the market. Don't believe anyone who tells you that bitcoin has bottomed out. The truth is that no one knows where the bottom is. John Bogle, the grandfather of index funds, once said,

"If professional investors, who have models and data in their hands going back a hundred years, can't guess price movements, then neither can you."

So, one of the strategies is to buy more during a dip, but in no case can you be sure that the market will not fall further.
<h3>Investors, Keep Your Assets</h3>
Hodl is the cry of all bitcoin investors whose investments have been affected by the dip. The term comes from a drunk BitcoinTalk forum user who categorically claimed that he was 'hodling' his funds during the 2013 market crash. Five years later, that strategy would have paid off. Riding through the darkest times and the dips is a classic investment strategy. However, we are not in a traditional market like stocks or commodities. There is no long-term historical precedent for assuming bitcoin will recover.

We must also remember that the shares are linked to companies that sell real things to real people. Unfortunately, that is not (always) the case with cryptocurrencies. There have been circumstances in which Bitcoin has already recovered from the price drop, and hodlers have been rewarded. But be careful, as there is no guarantee that bitcoin will regain its former glory this time around.
<h3>Do Not Sell in Panic</h3>
It's a big mistake to sell assets when the market is on the dip. This is true because when prices go up again, you won't be able to profit. The main objective here is to buy cryptocurrencies at a low price to resell them at a higher price later. Do not buy the cryptos at a high price and then resell them at a low price.
<h3>Invest And Hope for a Better Future</h3>
The cryptocurrency market is very volatile, and we have already noticed many phases of depreciation followed by phases of increase. Therefore, it is better to invest in the long term and think about the benefits drawn from the assets in a few years. This should help hold your ground when the market curves lower.
<h3>Take the Opportunity to Do Some Research</h3>
Instead of focusing on falling prices, it is better to broaden your knowledge of cryptocurrencies and digital assets in general. Certain passive income opportunities such as yield farming and activity pools are currently experiencing renewed interest from investors. Therefore, learning a little more about these projects could be very useful in the future.
<h3>Consider Buying The Dip</h3>
It is advisable to take advantage of price drops to expand your asset portfolio. However, it will be necessary to know how to manage the risks. For example, the big mistake would be to spend money that should have been used for other projects in cryptocurrency investment. Also, investing in the wrong crypto project can be detrimental in the long run.
<h3>Investors, Cut Your Losses</h3>
Sometimes, the stress and panic of seeing the value of your investments drop are not worth it. All investors suffer losses. You should never invest more in crypto than you are willing to lose. So, cutting your losses shouldn't be too painful. If it indeed hurts you financially, then it is a sign that you have invested too much money in the market. Keep in mind that this bearish market is not over yet. Things can get worse before they get better. It is, therefore, advisable to cut your losses.
<h3>Investors, Learn</h3>
Watching any investment fall is always difficult. However, much more is learned when things go down than when things go up. You can learn more about the market, the feasibility of a project, and the strength of your team. You'll also learn more about your discipline, risk appetite, mistakes, and successes. So make sure you learn something from this market crash and apply it in the future.
<h3>Don't Panic</h3>
This is easier said than done, but the most important thing is not to panic. Now is the time to be disciplined. Before you make your next decision, take the time to do as much research as possible and try to act with clear ideas.

Hopefully, this article will offer you valuable insights into what you should do if you are one of those big-time crypto investors caught in the middle of a crypto crash and how you can cut down your losses and, in fact, make some profits out of a crisis.

Coping Mechanisms of Big-Time Crypto Investors During A Crypto Crash

While analysts raised $30,000 as a key threshold, the fall of the main electronic currency dragged down the crypto investors, leading to a crypto crash.

Oluwademilade Afolabi is a freelance writer and editor passionate about blockchain technology and the health industry. He is a 6th year medical student, and has worked with various companies and blogs since the blockchain revolution began.

Coping Mechanisms of Big-Time Crypto Investors During A Crypto Crash

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