The steep decline in prices of mainstream tokens such as Bitcoin (BTC) and Ethereum (ETH) in the past months has no doubt signaled the crypto winter is well and truly upon us. The market downturn has resulted in trepidation for many investors, especially new entrants. While many have not yet stepped out of the long shadow cast by the Luna/Terra crash in May, the most recent Solana security incident has exacerbated the panic in the market.
Despite these unsettling developments, the cryptocurrency market’s history has shown that a bull market always follows a bear market. Although it is hard to predict when the next bull market will come, investors can use the current bear market as a time for reflection and prepare for the upswing while keeping their assets safe.
Here are some tips to help new investors prepare for the upcoming bull market. The final tip about asset safety is the most important one to keep in mind.
1 Research the tokens you want to buy
The crypto winter offers retail investors an opportunity to buy low as the decreased trading volume results in lower prices. Based on how the cryptocurrency market has performed in the past, investors who buy a token at a low price point and hold it until the next bull market would earn high return – if they had chosen the “right tokens.” To do so, a deep understanding of how cryptocurrencies work and research are crucial, including the following aspects：
A：Whether a token has clear use cases, and if the price was mostly affected by market speculation
B：The founders of the tokens and their reputation
C: Whether a token has social media accounts, and the frequency of its updates
D: Projects behind the token, and any criticism or dispute concerning it
New investors should ask themselves these questions to evaluate the fundamentals of a token before investing in it, especially for those with a market cap lower than US$1 billion.
2 Improve your trading skills
Even though some new players might have learned about the basic principles of how the crypto market works, it is very important to get familiar with the function an exchange offers as some types of trading require swift action.
In contrast with stock markets, crypto markets offer investors a unique advantage to trade with a relatively low amount such as several US dollars.This greatly lowers the entry threshold compared with stock exchanges that often require hundreds of dollars to purchase one board lot (usually several to 100 units) of shares.
Beginners can practice different investment strategies and portfolios with smaller amounts they can afford to lose. They can also focus on technical terms such as K line charts and the percentages of profit and loss, instead of investing the actual amount. Beginners can also try mock trading on some platforms.
HODL is a term among crypto investors that stands for “hold on for dear life”. It refers to buying and holding cryptocurrencies without getting influenced by price increases or decreases in a short period. This strategy originated in 2013 when the price of BTC surged to more than US$950 at the beginning of December, up from just over $130 in April that year. Many investors who held on to their BTCs enjoyed extraordinary returns.
When the BTC price surged to US$69,000 at the end of 2021, those who bought BTC at US$ 18,000 (its 2017 peak) and held it through the 2018 crypto winter when the price fell about 80% also saw high returns.
4 Keep your assets safe
With the increasing popularity of cryptocurrencies, the crypto market attracts investors as well as hackers, resulting in many security incidents. The most recent one was the Solana wallet hack on Wednesday which saw more than 8,000 wallets losing at least US$580 million worth of assets. Many crypto veterans called for investors to transfer their assets to top exchanges after the incident.
Learning how the security measures taken by the top exchanges can protect your asset is very important during the crypto winter. To see how top exchanges protect your assets, let’s take Huobi Global, one of the world’s leading crypto exchanges in the world, as an example.
Huobi Global adopts hot and cold wallet separation, multi-signature, and threshold signature technologies to ensure the security of the private key signature process. Huobi Global has allocated US$1.05 billion worth of assets to be stored in hot wallets, while the majority of users’ assets are stored in multi-signature cold wallets, thereby heightening security for a large portion of funds.
As a world-leading crypto asset exchange that has been operating with zero major security incidents for nine years, Huobi Global has an independent and professional security team comprising individuals who have deep experience in blockchain and wallet security, APT intrusion countermeasures, and user asset protection.
Even though there are more factors to take in consideration and it is almost impossible to predict when the crypto winter will end, the tips mentioned above can help you to be well prepared for the next bull market.