Crypto Crash – The Schoolmaster Arrives

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5 Aug 2024

TradFi Strikes Again
With trillions being wiped off the stock market last week, it was inevitable that Crypto would eventually suffer the wrath of the TradFi market. American futures were looking terrible this morning and so we experienced a much deeper correction in the Crypto market than many anticipated. Blue chip altcoins were shedding double-digit percentage points early this morning. ChainLink, Polkadot, and others were 25% to 28% in the red this morning.
For newcomers this is more than a shock, it’s unthinkable. If you are a newcomer and have spent some time in TradFi, a 25% correction in a single trading session is like an end-of-the-world event. However, Crypto OGs are quite familiar with this level of volatility. For a newcomer or “all-in” investor this is a nightmare. However, for the disciplined investor, this is an opportunity.
Regular readers will note that I have addressed capital deployment on this blog, especially lately. This is part of risk management, a practice many investors believe is unnecessary due to greed, which restricts them from exercising disciplined approaches. The potential gains overpower their willpower, causing them to FOMO into an investment opportunity. This is unfortunately the sad reality of many Crypto investors.
Choosing The Alternative
The alternative is to practice some of the strategies addressed in this blog. Yesterday’s article, once again addressed a favorite topic, passive income. If as an investor or Cryptoneur, you are generating some form of passive income, you are in a strong position. This is especially true if your earnings are in dollars, or even Bitcoin. Deploying this capital to purchase altcoins is a great strategy.
This is a perfect example, as many altcoins are trading at an enormous discount. staking can be profitable. Deploying staking rewards into the micro-cap sector can be profitable, as these smaller projects tend to correct more severely than blue chips. Another important element of operating in this space is having a stablecoin allocation. As previously mentioned, DeFi opportunities can be utilized while you HODL.
In this way, investors earn yield exposing a portion of their portfolio to the dollar or some other fiat-based stablecoin. Furthermore, as I mentioned earlier, Dry Powder is also an essential weapon for a Crypto investor. This is effective capital deployment. Ensuring you release your bread upon the waters periodically, not simply going all in at once.
Utilizing WEB3 opportunities such as SocialFi platforms is another way that a correction can be beneficial. In certain instances, users can earn more Crypto in a corrective market. This is not standard practice. However, there are situations where this is the case. Applying sound strategies can help to offset the harshness of such a deep daily correction.

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Final Thoughts
The market is like a strict schoolmaster. Nobody leaves his class without first learning how this game is played. We continue learning, continue growing, and never stop improving as traders or investors. Be teachable, it’s your greatest advantage regarding financial markets. Thanks for stopping by, try and make this dip count and I will catch you in the next one!

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Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.