Cryptocurrency investor Sam discusses various scenarios for Bitcoin, including a potential crash, a sharp rise, and slow growth, and how he would react to each. He suggests having conviction in investments and recommends putting about 40 to 50% of one’s cryptocurrency investment into Bitcoin. If the price falls 10% from its current value, he would allocate 10% of his cash to buying the dip, and he would continue to dollar-cost average. For altcoins, he advises waiting to buy more as their prices fall. If Bitcoin rises significantly, he would not sell much, perhaps only 2%.
How’s it going everyone, it’s Sam and today I want to talk to you about what to do in case of a crypto crash. Of course, you have to do your own research and know what cryptos you feel strongly about.
H2: Focus on Bitcoin
Today, we will mainly focus on Bitcoin, but I will also touch on some other altcoins and what I would do. Whatever you do, you have to have conviction in it, especially when buying the dip.
H2: Market News
We will talk about what I will do if we move up too and if we fall down further. We might not see a large crash soon, considering there is some bullish news in the market, such as the SEC Commissioner Hester Pierce’s comments on Bitcoin. She doesn’t understand why a Bitcoin spot ETF hasn’t been approved yet, adding that the reasoning to deny it is outdated.
However, there is a lot of leverage in the market, which is why it is important to talk about what I would do in case of a crypto crash. When we have high leverage, we get shaken out, as happened when the market dropped from $56,000 to $49,000 in just a day or two days.
One crypto that’s actually doing well in the top 25 is Algorand. They have a small allocation of $3 million, which is incentivizing people to supply, borrow, and stake Algorand.
H2: What I would do
If Bitcoin falls 10% from here, I would put 10% of my cash into it. I generally try to put about 40-50% of my money into Bitcoin. If we fall down to $46,000, I will add more. However, the majority of my cash will be sitting on the sidelines. When I allocate some towards crypto, I generally try to add more over time, but I do have some set aside in stable coins on something like BlockFi, where they pay up to 9.5% interest.
With altcoins, it’s going to be a little different, and I’ll probably wait to put more in as it falls down more.
H2: Bitcoin Pumps
If Bitcoin pumps, I’m not going to sell anything at $50,000 or $60,000 or $70,000. I feel so strongly about Bitcoin for the next 10 years that I don’t want to take out anything meaningful at those levels. I believe it’s a good opportunity for me, and I’ll keep adding when I can. However, I will take out small amounts when it hits $90,000, for example, two percent of my overall amount.
In conclusion, a crypto crash might not happen soon, but it’s important to have a plan and know what you would do if it ever does. Always do your own research and know what coins you feel strongly about.