4 things the smartest investors know about crypto right now

Crypto has had a rough year, and with a potential recession on the horizon, it’s easy to feel discouraged as an investor.

However, the right strategy can help make investing in crypto more bearable. While crypto is still speculative and no one knows for sure how it will perform over time, there are a few things smart investors know that can help maximize your earnings.

1. Crypto is a long-term investment

Cryptocurrency is not a get-rich-quick scheme, and trying to time the market can be incredibly risky. Rather than trying to buy and sell at just the right moment, a safer strategy is to hold your investments for the long term.

This is not to say that it is impossible to make a lot of money in a relatively short time with crypto. However, a long-term approach is both safer and more realistic, and it will reduce your chances of losing a lot of money if you buy or sell at the wrong moment.

2. Volatility is normal

Part of maintaining a long-term view involves preparing for volatility. Even if crypto thrives in the long run, it will likely experience extreme ups and downs along the way as it finds its footing. While this can be unnerving, it is also normal for the crypto market.

Bitcoin (BTC 4.84%), for example, has lost more than 80% of its value on several occasions. And Ethereum (ETH 5.20%) once saw prices drop by close to 95% within a year. Nevertheless, these cryptocurrencies became two of the strongest players in the field.

Volatility is not easy to figure out, but try your best to stay focused on the future. Long-term growth is more important than short-term drops, and turbulence is par for the course with crypto.

3. Real utility is key

One of the most challenging aspects of investing in crypto is determining which investments are most likely to thrive over time. All cryptocurrency is speculative right now, and even the most popular investments are not guaranteed to survive.

However, those with the greatest chance of success are those that have real-world applications. Before you invest anywhere, like yourself if that cryptocurrency has any use. If so, how does it compare to the competition?

By focusing on utility, it will be easier to determine whether a cryptocurrency is a strong long-term investment or overhyped.

4. Recessions are smart buying opportunities

Market downturns can be scary, and it can be tempting to wait to invest until prices pick up again. However, market decline can be one of the best opportunities to buy.

Crypto is often expensive, with investments like Bitcoin and Ethereum costing thousands of dollars per token. However, during a downturn, you have the chance to buy the same cryptocurrencies for a fraction of the price. Many cryptocurrencies are down 50% or more from their peaks, making right now one of the most affordable times to buy.

If you invest in strong cryptocurrencies and hold them for the long term, there is a good chance that your investments will recover over time. When that happens, you can see significant returns.

Investing in crypto is not always easy, especially during periods of volatility. But the right strategy can protect your money as much as possible, regardless of what the future holds for cryptocurrency.