We are almost done with the month of June.
Here are my thoughts about it.
The month of June is not really bad as projected by many traders, crypto news outfits and other observers. In fact, it defied a lot of dire projections especially the one in which Bitcoin will go down to 20K. FUDders tried to bring the price down in the last minute by publishing left and right news about the expiration of the BTC opyions contracts last weekend. It went as they wanted it to be but only for 12 hours. It was followed by price a action which we are still enjoying as of this writing.
Let me share the three things I learned during the May and June crash.
First, strong altcoin projects which are truly delivering to their promises and have less hype have more defiance to FUD attacks against Bitcoin. On the other hand, projects which have stellar price performance only because of hype are very vulnerable to FUD attacks eventhough these attacks do not primarily pertain to them.
All those times when Bitcoin is at red, I was able to distinguish strong projects which have also experienced the dip but not as much relative to the rest of the altcoin market. And when Bitcoin recovered, these strong projects are also the first one to bounce and recover from the ashes.
Second, diversification is really necessary but diversification only works well when you distribute your portfolio among strong projects. The May and June crash taught me which coins or tokens are worth keeping and which ones are to be released. With thousands of tokens we have in the crypto space right now, it is always better to diversify and choose coins and tokens which are more resistant against FUD attacks.
In relation to this, there are also a lot of coins and tokens in which you will have the difficult time releasing them to the market once you are ready to execute your exit plans at the end of this bull cycle. There is no use in keeping coins and tokens which have insufficient liquidity and traders in both decentralized and centralized exchanges. Usually, you will end up selling at lower price where there are willing buyers just because no one is willing to take the risk of buying at the prevailing market price. In decentralized exchanges, less liquidity which results to more slippage is a thief that will take a big chunk of your profit.
Lastly, it pays to learn on how to use decentralized finance (DeFi) apps and how each differs from the other. Each decentralized exchange has disadvantages and advantages over the other. Understanding how each works will help you analyze which one will work for you best depending on your risk tolerance while allowing you to increase your crypto holdings through the rewards you will be earning.
Holding crypto is so 2014 and staking crypto is so 2017. While these two options are good ways to increase your holdings, yield farming presents a greater way to earn more while waiting for the market to go back on the bullish track. Also, there are new DeFi apps which are being launch on newer, faster and more scalable blockchains and since their communities are smaller, you are sure to earn massive returns of up to thousands of APY for the first few weeks or a month after launching.
What are your thoughts on these lessons I learned? What did you learn during the May and June crash. Feel free to share. :-)
