First things first, take a deep breath and focus on the good things in your life. Now, as we take a close look at the question, is it time to panic on your LCX investment, we will share some insights and previous articles highlighting LCX as an investment.
It is not news to anyone reading this article that the crypto market has been on a significant downward slide as an investment vehicle. For many people who had only experienced the upward trajectory of crypto prices, this past few months have been a brutal awakening of any investment, but especially a crypto investment. So, what do you need to understand while making new investment decisions? Are your investments safe or at risk? Are you having doubts about the reasoning behind those crypto investments you bought when the market was high? Well, let’s take a look and see if we can get some good information to help you decide the best course of action for you to make on your crypto investments. We will also talk a little about how to choose the right crypto for investing with one or two examples.
Cryptocurrency investing might be a roller coaster ride. It’s critical to consider not only buying but also when to sell cryptocurrency to have the most excellent chance of success. The standard guideline when investing in stocks is to purchase and keep them for at least five years. Crypto is a different and much riskier market, so traditional approaches aren’t always valid.
These have been relatively difficult to purchase over the last few months. Since mid-November, the cryptocurrency market has lost approximately half its value, and even industry leaders like Bitcoin (BTC) and Ethereum (ETH) have seen their values drop dramatically.
Even for seasoned investors, the recent price drop may be worrisome. And with no end in sight, it’s easy to want to sell your cryptocurrency holdings before they get even worse. But is selling now a smart move?
Early June saw Bitcoin plummet from $30,500 to around $23,500 in just four days, a loss of approximately 23%. Ether plunged more than 31% over the same period, and it appears that the whole crypto market has been declining this year.
Volatility attracts speculators looking to profit, but it’s frightening for new investors just getting started. Traders can also anticipate a lot more of this volatility in the future as new cryptocurrencies are launched, and others vanish.
Will crypto prices keep falling?
If you’re afraid that the market will continue to fall, you might believe it’s a good idea to sell your assets now and get whatever money you can. However, this may be a hazardous option at times.
It’s impossible to predict what the future holds. Prices might drop even further or recover quickly. This sector is known for its volatility, and crypto has a long history of significant ups and downs. In the end, the market has generally trended upwards throughout history. If you sell now, there are a chance prices will rebound soon after and miss out on the gains.
Volatile is one of the most common words used to describe Bitcoin and other cryptocurrencies. Their prices surge and then seem to plummet almost as soon, while buzz, sentiment, and fundamental developments are all integrated into the market quickly.
Also, if you’ve invested recently, withdrawing your money now will almost certainly result in a loss. Since November, Bitcoin and Ethereum, among other prominent digital assets, have dropped by nearly half their value. Withdrawing your cash will decrease the weight by approximately half, locking you into significant losses.
There are no hard and fast rules regarding when you should not sell cryptocurrencies. The most crucial thing to note is that you shouldn’t panic and sell if the price drops. If you still think it has long-term value, keep it.
Many crypto investors subsequently regret the decision to panic sell. They buy when a cryptocurrency is at a high price, sell when it drops, and then miss out if the price rebounds. You should sell if the price has fallen and you no longer believe the cryptocurrency is a good investment. However, a price drop should never be the only reason to sell.
What should you do with your crypto investments?
The most important rule is that you won’t lose anything as long as your money is invested in the market. If your investments drop 99%, you won’t lose a penny unless you sell during the slide.
Nobody can predict whether it will recover, but this degree of volatility is typical for the industry. Bitcoin’s value has plummeted by more than 80% on several occasions, and Ethereum fell nearly 95% in a year. This most recent near-50% price drop is relatively modest compared to prior declines of more than 80%.
The greatest thing you can do, then, is to keep your investments. The market could get worse in the future, and your portfolio may sink even further. But if you put out an effort to focus on the long term and stay away from day-to-day market fluctuations, you may profit from the recovery later down the road.
Choosing the Right Crypto For Your Investment
When you begin investing there are many things to consider when choosing a cryptocurrency for investment. However, let’s focus on the four most significant factors:
1) Market capitalization
Ranking cryptocurrencies based on market capitalization is one way of selecting them for investment. Here is a list of the top 10 cryptocurrencies ranked by market capitalization.
Table: Top 10 cryptocurrencies based on market capitalization
Note: Data is as on 13 November 2021.
As seen in the above table, out of the total market capitalization of USD 2.79 trillion for all cryptocurrencies, Bitcoin (43%) and Ethereum (19.6%) together contribute 64%. So, these are the blue chips of the crypto world. Accordingly, you can choose to invest some money from your overall cryptocurrency allocation in these two.
2) Total coins to be mined and current supply
Look at whether there is going to be a limited supply of a particular cryptocurrency. You should also consider the number of coins that are already in circulation. For example, Bitcoin’s overall supply is limited to mining 21 million coins only. As of August 2021, 18.7 million coins are available, with only 2.3 million more coins to be mined.
The demand for Bitcoin is increasing with every passing day as more and more people are investing in it. But supply is limited. The increase in demand and limited supply leads to an increase in the price of any digital asset, and the same applies to Bitcoin also. So, while deciding which crypto to buy for investment, you should check what will be the overall supply and how much of it is already in circulation.
3) White paper
Every cryptocurrency has a white paper that mentions all the details of the coin, like the purpose for which it has been created, the problems it will solve, the technology it uses, etc. The white paper also mentions the vision of the coin’s creators. If the white paper seems realistic, you may consider investing in the coin with an initial amount.
Over time, you can gauge whether the vision mentioned in the white paper is getting implemented in the real world. If yes, it will reflect in the value of the coin going up. Accordingly, you may take a call on investing more in the specific cryptocurrency.
4) Use cases
One of the important things mentioned in the white paper is the coin’s use cases. It is one of the main factors that will drive acceptance among its users/investors. Over time, new use cases may get developed. The more the number of use cases, the wider the coin’s acceptance will be, and the more the increase in its value.
Let’s consider an example. Technology-wise, Ethereum currently has one of the best use cases. It is because of these use cases that Ethereum has the second biggest market capitalization after Bitcoin. It might be one of the best cryptos to buy now.
If the coin’s use cases go down, the probability of the coin’s value going down and the coin not surviving will be higher. So, you may consider the coin’s use cases as a key factor while deciding on the best cryptocurrency to buy.
Some Additional Thoughts
As an investor, you should follow appropriate asset allocation. At a broader level, you should diversify in various asset classes such as equity, debt, gold, real estate, and cryptocurrency investments. And within crypto, you should further diversify into various cryptocurrencies. You can do this based on factors such as market capitalization, demand and supply, use cases, etc. Lastly, just as with mutual fund SIPs, it’s better to invest small amounts regularly rather than plonk down a lump sum at one go.
Is LCX Crypto As An Example Of A Good Crypto Investment
In a Previous Article We Discussed How and Why LCX Would Be A Good Crypto Investment to consider because it is a leading European Crypto Exchange and it aims to become a full blockchain solution suite, an aim for which the company has been working tirelessly to achieve. In April we stated “the native LCX token has been on a roll since the past year, when the token was introduced, the token has since then increased more than 20 times in value, while since the start of this year the token has gained more than 10 times in value, making a very good return for its investors. The token seems to be a good investment for all the right reasons, it has a legit project backing it up, which makes it a very suitable investment because of its stable backing and the future potential of LCX.” Although the LCX crypto has lost value with the overall crypto market, it continues to have excellent fundamentals.
Bottomline: It Is Not Time To Panic On LCX
After considering all of these factors, you can make a rationale and sound investment decision based upon your particular situation. However, at the moment we continue to feel very positive about the long-term opportunities afforded by LCX.
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