How to make money on a bitcoin crash

Every time there is a failure in cryptocurrency, ringing the alarm bells and often causes panic.

21.Sep.17 6:14 AM
By Daria Zaytseva
Photo Toinnov.com

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There are several ways to try and cash in on a sharp drop in the price of the cryptocurrencies. Some of them are more effective than others and some more suited to different types of accidents or currencies. It depends on the investor.

There are five methods described below that can help transform the disgusting collapse in a chance to earn more money than before.

1. Buy the failure
With Bitcoin’s way on a constant trajectory up, buying the failure is one of the easiest ways to achieve a convincing success. However, it is not always easy to remove because it takes time in the market.

2. To identify strong opportunities
While the cryptocurrency markets seem to be intrinsically linked, and will broadly be in a bull or bear mode, there are still opportunities to be made on certain strong coins through the market. In trying to identify these opportunities, one must identify coins with a solid foundation and a compelling business model.

3. Do nothing
Gradually, when it comes to cryptocurrencies, holding on through the bad times is the most simple and respected strategy. If you do not sell your coins when they are below what they were purchased you have not suffered damages.
This is equivalent to buying digital coins and just hold them through thick and thin. This is one of the main strategies of dealing with a crash is to do nothing.

4. Selling to fiat
A somewhat controversial strategy, and one that flies in the face of holding is exiting to fiat currencies.
Crypto asset managers are notorious for doing this when there is a crash. However, it is difficult as it again requires timing the market both on exit, and then again on reentrance.

5. Shorting bitcoin
This is a tool used primarily by traders, and is one that, when done correctly, offers a huge profit.
Several popular exchanges offer this as an option, but it needs a lot of skills and experience. Shorting an asset involves borrowing it from someone else, selling it, and then buying it back later to return to the person you borrowed from. If the price falls, you will make a fortune. If the price rises, you could lose everything.

The strategy you use should be based on your skill level and your comfort with risk. Use whatever strategies you are most comfortable with, and always know your investing goals.

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