Protecting Your Bitcoin in a World Turning Towards Chaos
If there is one vital thing that you MUST be able to do while investing in cryptocurrency, that vital thing would arguably be preparing for the future. For many of us, investing in crypto in general is what many of us would consider planning for the future. Hoping to free ourselves financially or build up a nest egg for the future, possibly being able to retire early. In a way that is correct. But today I am talking about preparing for the worst case scenario. By the time that those situations do come, it is already too late to react. That is why we must prepare, and even to an extent, expect that they will happen. Unfortunately in the world and especially with crypto, the worst possible situation often comes to pass. Preparing now, could be the difference from you surviving and even thriving, or potentially losing everything.
Bitcoin, ethereum and cryptocurrency are extremely volatile, and right now they are hanging on the edge of the cliff. The situation is very fragile. Mostly due to the whole Russia/Ukraine situation, and then also due to inflation and potentially rising interest rates. Right now, all it would take is one big breaking news story, that could send the price of your coins plummeting down. All of those things above are things that are out of our control. But, we can take actions to protect ourselves from it. The first thing is that you need to be very careful about using leverage while trading. With the markets being so volatile, it can tempt anyone into believing that they have a chance to make some money. But right now, the risk isn't worth it in my opinion. While there is a big chance that markets could drop in an instant. On the flip-side, a big positive news story could send prices upwards as well. Avoiding leverage can be a great move to help protect yourself. If your only making spot purchases, the upwards and downward movement of prices shouldn't have any affect on you.
Also, this is a time to be paying off your loans that you took out with crypto collateral. If you are unable to pay them off currently, adding a bunch of extra collateral would be a good decision. It is not out of the question that we will be seeing $10k upwards/downwards price candles in a very short time that would make it nearly impossible to have enough time to add more collateral to your loan before being liquidated. With how serious some of the world situations are at the moment, if the right type of news story happens, it's not out of the question that we could see price candles for much more than $10k. Which would liquidate a large amount of people. So in short, start avoiding leverage trading, and pay off or protect your loans.
The next step is to begin taking self custody of your cryptocurrency. If you have been paying attention to world news, the clues are all around us. Governments are changing. Some of us are learning that we aren't as free as we thought we were. Canada was freezing bank funds. Russia has been sanctioned and blocked from using the world financial system. Bank withdrawal limits have been implemented in both Ukraine and Russia. The biggest cryptocurrency exchange in South Korea has also stopped allowing self-custody or withdrawals. There may be a time sooner than you would think, where it is almost impossible to take self-custody of your own crypto. That is why you need to be planning ahead and begin taking action today. Personally I like Ledger's, but Trezor's are a good option as well. If those are too expensive for you, using a good self-custody software wallet is a good short-term option. Doing this now could be the thing that helps to save you from financial ruin. Coinbase just blocked over 25,000 Russian addresses on their system. This means that these people are locked out of using their accounts, and their coins are potentially stuck there. If you had all of your funds there, they could be lost. How devastating would that be for you?
While the 3 advice tips above were somewhat bearish, preparing for the worst-case scenario that could happen. The last piece of advice is something that could propel your portfolio into being a true catalyst for future success.
This could be done by simply having cash set on the side, and also taking advantage of these low prices now. I'm about as bullish as a person can be for bitcoin and there are reasons for that. Look at what is happening in the world currently. The world is moving towards chaos. But with that said, bitcoin is still above $39k. If you would have told me all of the bad things that are happening in the world, and then asked me what I thought the price of bitcoin would be. I would have guessed that it would be much lower than it actually is today. That is a very bullish thing. Yes, the war could become larger. Yes, there might be world-wide recession. And yes, inflation will probably become worse. But, each day that bitcoin survives, that blocks are minted, is a successful day for bitcoin. It is becoming stronger. People will continue to wake up to the real value of bitcoin, and its adoption will continue to increase. Remember that there will only be 21 million bitcoin, and several million of those are already lost forever. The game has already begun, and you need to get yours before it is too late.
How about you? What are you doing now with your bitcoin and crypto to protect yourself?
As always, thank you reading!
The world is sure changing rapidly and becoming more unstable. It must be a good idea to hold some crypto at this time despite the volatility! Fiat currencies can collapse rapidly, for example the russian ruple has fallen 40% in 10 days due to the conflict in Ukraine and the sanctions imposed. Who knows where the current financial system is going!