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Cryptocurrency Bear Market: Four Options – Choose Wisely

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In the decade since the introduction of bitcoin, it has been a rollercoaster of a ride for cryptocurrency investors – especially after the start of the bull run late in 2017. There have been thrills and spills, and more ups than downs across the 10 years. Certainly, those who were clever – or lucky – enough to invest in the early days will be very pleased with their yield.

Much like a rollercoaster, following a steep ascent comes an exhilarating – sometimes scary – drop, and that has been the case for bitcoin and the other major cryptos in 2018.

There is talk of another bull run on the horizon, though whether it will happen is anyone’s guess. So what strategies do crypto investors employ in a bear market? Basically, you have four options – as listed below. Choose wisely.

  1. Short sell

“Shorting” is when a trader backs a certain market to decline. If their hunch is correct, then they will benefit. Arguably the most famous example of short selling happened in September 1992, when Hungarian-American investor George Soros netted approximately $1 billion after correctly predicting the British pound would drop when it was forced out of the European Exchange Rate Mechanism.

Shorting is made possible through Contracts For Difference (CFDs), or derivatives, as they allow the trader to sell assets he or she doesn’t actually own. Simply put, a short trade is executed when a borrowed asset, or instrument, is sold at the current market price. If the market moves the trader’s way thereafter, and the price of the asset declines, the value of their position increases. From there the trader can choose to buy back the now-cheaper asset and make a tidy profit.

The 1,200 instruments offered by leading global social trading and investing platform eToro to its 10 million+ members have the option to short, including within the cryptocurrency and stock markets. Never has the adage “one man’s loss is another man’s gain” been so apt.

  1. HODL

The first time you see “HODL” when someone is discussing cryptocurrencies the word causes you to stop reading. You think: “Is it a misspelling?” Well, yes it is – at least it was mistyped originally. Now, rather amusingly, HODL has spawned a life of its own. It has evolved to represent a long-term trading strategy and philosophy for crypto investors.

HODL has become an acronym (or even backronym) for “hold on for dear life”, meaning that even when investors are in the deep red with their cryptos they should not buckle under pressure and sell, driven by the belief that they will, ultimately, reap great rewards, once mass adoption has been achieved.

Quartz heralded HODL as one of the most important terms in crypto culture in 2017, describing it as a determination to “stay invested in bitcoin and not to capitulate in the face of plunging prices”.

There is certainly great potential of HODLing as an investment strategy, and not selling while under pressure, as history shows us – and not just in the cryptocurrency world.

One of the most notorious examples of failing to HODL happened in the mid 1970s when Ronald Wayne, Apple’s third co-founder – alongside Steve Jobs and Steve Wozniak – sold his 10 per cent stake in the then-start-up back to the other two co-founders for $800.

In August 2018, Apple achieved the historic milestone of reaching a market capitalisation of $1 trillion. Had Wayne adopted a HODL mentality his Apple stake would be worth around $100 billion today.

It is impossible to predict the future, but Jay Smith, one of eToro’s most recognisable Popular Investors (whose trades can be copied by others – as can anyone’s on the platform), believes staying strong will reap the biggest rewards. Full-time trader Smith – a.k.a. jaynemesis on eToro– describes his trading style as “fundamentals, future and HODLing”.

“I firmly believe that cryptos will change the world, replacing stock markets, most currencies and powering everything from machine-to-machine payments and the Internet of Things through to streaming media, prediction markets, governance systems, voting systems, even potentially the internet,” he continues. “That being said, there is a long way to go, we are in the very early stages for most of these areas.”

  1. Keep investing

When the value of cryptos falls, many investors double down – effectively strengthening their commitment to a course of action that is potentially risky – because the prices are so low. As with HODLers, those who keep investing see the long-term benefits of cryptos.

Despite the bear market of 2018, many eToro users have invested more in bitcoin, XRP, and a range of other cryptos available on the platform – just see the market sentiment (image taken on November 30, 2018).

This is not investment advice or an investment recommendation.

  1. Diversify

If you have gone all in on cryptos and are waiting for the arrows to turn green, rather than red, it might be a good idea, during a bear market, to consider investing in other asset classes. By diversifying your portfolio this approach will spread your overall risk.

On eToro there are over 1,200 financial instruments, across six asset classes, on offer: cryptocurrencies; exchange-traded funds (ETFs); stocks; indices; commodities; and currencies. There are other ways for users to invest with eToro, in addition to manual trading. The innovative CopyTrader tool allows clients to copy the trades of top investors automatically. Users can view and copy anyone with a profile in a straightforward way, and expand their portfolio using CopyTrader while still using an individual strategy.

Another option is CopyPortfolios™: eToro offer various portfolios including in cryptos, technology, and the best-performing traders. These allow users to invest in multiple markets or traders based on predetermined investment strategies.

The award-winning platform truly is a one-stop shop for all your trading needs in a crypto bear market.

eToro is a multi-asset platform which offers both investing in stocks and cryptocurrencies, as well as trading CFD assets.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 65% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Cryptoassets are unregulated and can fluctuate widely in price and are, therefore, not appropriate for all investors. Trading cryptoassets is not supervised by any EU regulatory framework. Past performance is not an indication of future results. Your capital is at risk.

This content is intended for information and educational purposes only and should not be considered investment advice or investment recommendation.

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Blockchain project that incentivises people to test for diabetes by handing them cryptocurrency wins first GoodDollar hackathon attended by Israeli ambassador in Rwanda

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The hackathon for reducing global wealth inequality using decentralised technology was won by a prototype for a system that encourages citizens to be checked for diabetes in return for GoodDollar tokens

GoodDollar, a not-for-profit research hub that explores how decentralised cryptocurrencies and blockchain technology may enable models based on universal basic income (UBI) with the central aim of reducing global wealth inequality, held the inaugural Hackinequality event in Tel Aviv on March 14 and 15.

The judging panel, after much debate, agreed that the three-person t2d team – made up of Jesse Medina, Lior Yaffe, and Yaron Shmaria – had done enough to see off competition from the other eight social impact projects.

The team won the US$2,500 first prize, though the money was of secondary importance, with their contribution for social impact by far the more valuable.

Winning for good: t2d, victors in GoodDollar’s inaugural Hackinequality event, celebrate their success alongside the judges and GoodDollar members after 16 hours of fierce competition (photograph credit: Ben Palhov)

Nine teams had 16 hours to work on their projects at the eToro offices in Bnei Brak, and their dedication was commendable. Most of the talented 35 participants – including programmers, analysts, designers, user experience experts, blockchain enthusiasts – burnt the midnight…

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eToro Officially Launches Crypto Trading Platform & Wallet in the U.S.

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Global platform allows U.S. customers from 32 states and U.S. territories to trade 13 cryptoassets with multi-asset trading to arrive in Q1 2020

New York, NY — March 7, 2019— eToro, a global multi-asset trading platform with over 10 million registered users, announced the launch of its platform and cryptoasset wallet in the United States. With the launch, U.S. customers with diverse levels of expertise can leverage eToro to collaborate with one another to find the best cryptoasset trading strategies in an environment rich with unconventional educational tools.

At eToro, you can share your real track record, portfolio, and trades with the community, allowing users to engage with each other on trading ideas that are executed using real dollars. For those new to crypto trading, the community and educational resources introduce users to this new asset class and the risk profiles involved in it.

Yoni Assia, Co-founder & CEO of eToro, said: “For the first time, Americans can collaborate with other crypto traders when making buying and selling decisions. Users can adjust their trading strategies by watching and…

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Why be average when you can be extraordinary?

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In 2018, world stock markets went up. Then they went down, then up, then down and down again.

By the end of the year, the three major indexes tracking world stock markets were all flashing red. This means if an investor had decided to just purchase products that followed these indexes, they would have lost money.

The MSCI World Index, which – tracking the stocks in 23 of the most developed economies – is the financial sector’s “go-to” for taking the economic temperature, slumped 8.71%. Investing £100 in line with that index would have seen you finish the year with £91.30.

Not great if you are building for a financially secure future.

It is debatable as to whether these indexes should be used as a path for investors as the theory behind them is to demonstrate the overall movement of share prices. They track each company’s stock and do not either highlight more of the winners or dump those that are really struggling.

But there is another way to invest without blindly following these general ups and downs.

Our Popular Investors don’t just track the market. They make investment decisions based on financial and economic information and use their experience to gauge how external factors might impact a company’s stock price.

They get to know companies and if they like it or think it stands to do well after…

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