Navigating market volatility with confidence

We know that many investors fear the infamous volatility of the crypto market. We believe that, far from letting this discourage you from investing, you should consider that volatility can also bring good opportunities. Prices of major cryptocurrencies can skyrocket in a matter of hours and, in the same way, can drop abruptly. This rise and fall in prices may be a cause for concern for some but, in reality, volatility can be a great tool when you have well-defined investment strategies. Keep reading to find out how you can work with market fluctuations to your advantage.

What is market volatility? 

Market volatility is the variation or fluctuation in the prices of a financial asset over time. It is influenced by different factors such as relevant news from the financial industry, new technological developments, government regulations, and even global macroeconomic events. While this characteristic of the crypto market may seem complex, the most experienced investors know that volatility can also present excellent investment opportunities.

How to really handle crypto market volatility?

Cryptocurrencies are generally volatile in the short term, and that is why recognizing this is the first step toward a successful investment strategy. Having a long-term vision is a good approach to taking advantage of this volatility. Here you can see an example of how having patience when investing in crypto can yield very good results: There are some strategies and tools you can use to make cryptocurrency volatility work in your favor:

1. Fixed Interval Investment (DCA) 

DCA (Dollar Cost Averaging) is a proven strategy that consists of investing a fixed amount at regular intervals in a specific asset to mitigate the impact of market volatility on your portfolio. For example, if you invested the same amount every month in a particular cryptocurrency, you would end up paying the average price of that crypto for the time you invested in it, regardless of the highs and lows in its price. In this way, you are more likely to obtain good returns on your investment without the stress and hassle of constantly monitoring the market.

2. Portfolio Diversification 

Spreading your investments across several cryptocurrencies can also help you reduce the negative impact of market volatility. A diversified portfolio generally offsets losses from cryptocurrencies that are going down with returns from those that are going up. At Bitso, we have more than +130 cryptocurrencies, including stablecoins linked to the dollar, the euro, or gold, which you can add to your wallet for greater stability in your investment strategy.

3. Market Analysis 

Finally, don't forget that you can always keep an eye on the market. Our charts, widget, blog posts, as well as many of the specialized crypto sites out there, are a great source of information. These can help you identify patterns and trends of probable price fluctuations in cryptos so you can make decisions that result in higher gains on your investments.

With Bitso, your cryptos are always safe. Don't let market volatility stop you from investing and earning more. 

Download or open your Bitso app and take advantage of everything it has to offer; it's very easy and secure.