It has been an intense 48 hours! If you haven’t heard by now, the crypto market started falling before accelerating into a crash. Crypto prices collapsed before recovering some of their losses. It’s the first time I have gone through such a high level of volatility with my investments. I mean, my US and China tech stocks prices can move quite a bit compared to my SG and overseas stocks & ETFs. But wow, definitely not to this extent!
I allocate about 5% of my investment portfolio to cryptos so I treat the S$35k value as a single position even though I’m almost entirely invested in Bitcoin, Ethereum and Binance Coin. The crypto losses are not as bad when I zoom out and compare it to the rest of my investment portfolio. Anyway, I was also averaging down on them as crypto prices were crashing so the rebound helped to offset some of the losses.
As the crypto prices were collapsing, I was shocked by how quickly the value of my investment position was falling. I hadn’t worked out my strategy in a crypto crash because it was my first time going through one. It was a good thing I didn’t have a big position as I learnt how to navigate my first crypto crash. I tried averaging down but because the crypto prices were falling fast, I had to keep buying in with smaller amounts at a time.
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It’s different from stocks and ETFs during a market crash when I average down less frequently but with larger amounts at a time. And because the crypto market is open 24/7, you have no idea what’s going to happen when you go to sleep and wake up in the morning. At least the stock market closes after a certain time in the day and it acts as a circuit breaker. Essentially, you get to stop, breathe, think and come up with a better investment strategy the next day.
Whereas in the crypto market, the madness can just keep going and it becomes very difficult to manage your emotions to come up with a viable investment strategy. In this case, I just averaged down until I ran low on cash funds in my crypto account. That was my circuit breaker and I knew it was time to go to sleep and hope for a rebound to stem my crypto losses. When I woke up in the morning, my crypto portfolio had recovered some of its losses but is still down.
As I write this, crypto prices are starting to fall again so I may have to go through the same experience more than once. While I do have investment cash on standby, it’s running low because I used some of it to invest in US and China tech stocks during the recent dip. And I don’t want to over-allocate cash funds to my crypto portfolio because I’m still a newbie at it. It takes time to rebuild my investment cash and learn how to better manage my crypto portfolio.
Hi, wondering if you can share how you invest in crypto. Wanted to give it a try but do not know where to start.
Hi, I have an account with Coinhako to invest in crypto and you can check out my blogpage on it if you are interested.
I could imagine the tough time you might have gone through in those hours. I am learning about Crypto and your first-hand experience helps a lot in gaining some perspective. Thanks for sharing!
No worries and good for you!
Thanks for the mention and all the best on your crypto journey!