Vanquishing Volatility: How to Deal with Bitcoin’s Falling Prices

Investing in Bitcoin is filled with ups and downs.

While many cryptocurrency investors have made a nice profit, the volatility of Bitcoin and other cryptos has many investors concerned.

If you’ve noticed Bitcoin falling and are starting to worry, read on and learn how you can deal with falling prices.

Bitcoin Falling? Stay Calm

One of the most effective ways to deal with the volatility of the bitcoin market is to just stay calm.

Many cryptocurrency investors are new to the investing world, but they’d do well to take a page from veteran stock market investors and keep a cool head when things get rocky.

Many markets–from stocks to bitcoin–experience periods of volatility. The trick to weathering the storm and profiting from your investment is to not overreact and make rash decisions.

Just because the market takes a downward turn, doesn’t mean you should sell off your investment at a loss. More often than not, you just need to wait for the sudden dip to resolve itself.

Develop An Investing Strategy

Here’s another tip that newer cryptocurrency investors can take from experienced stock investors: develop a strategy for your investments.

With the explosive growth of Bitcoin, many people with varying levels of experience with investments have jumped into the market.

While a lot of cryptocurrency new newcomers have made a good deal of money with little planning or strategy, others have struggled.

To better deal with Bitcoin falling and rising unexpectedly, develop a strategy for your investments. Decide when you’ll buy and sell and how you can diversify and invest in other areas to better prepare for ups and downs.

Diversify With Stable Assets

One way to decrease the risk you’re taking in the cryptocurrency market is to diversify your investments overall with a few more stable investments.

Long-time, traditional investments like gold or silver are a great way to add some stability to your overall portfolio. While gold may not give you the sudden gains of cryptocurrency, it also will not expose you to the sudden downturns of the crypto markets.

Another typically safe investment is the bond market. While you’re probably not going to strike it rich overnight with these either, the bond market has reliably provided investors with 5 to 6% returns.

Diversify With Other Investments

If you want to diversify even farther, there are many investment opportunities available.

The stock market is a very obvious answer that provides almost limitless investing options.

Stocks have experienced plenty of volatility too, but over time have proved to be a consistently profitable place to put your money. Stick to a proven stock investing strategy like the parachute method for optimum returns.

If you can afford it, you could also consider investing in real estate. Real estate is a consistently high performing investment that is unlikely to take the wild swings Bitcoin has taken.

Putting It All Together

Investing in anything can be risky. But without risk, there’s usually not much reward.

If you see Bitcoin falling and are worried about how it might affect your portfolio, stay calm and consider your options.

Own a business? Curious how you can boost your income? Read our recent article on safely selling stock in your business.

Adam Hansen

Adam is a part time journalist, entrepreneur, investor and father.