Crypto Winter Is Upon Us: What Should You Do Next?

The crypto market is falling hard and fast with multiple double-digit drops in the value of Bitcoin and many leading alts. The price of the world's leading crypto asset has dropped 68% from its all-time high of $69,044 to around $22,000 at the time of writing. Other digital assets have fared even worse, with Ethereum down more than 75%, TRON falling 76%, and SOL and AVAX both down by a stunning 88%.

The general crypto market sentiment is one that's presently characterized by extreme fear, with recent global economic turmoil adding to incidents such as the meltdown of the Terra blockchain ecosystem and its TerraUSD stablecoin and LUNA tokens. Crypto investors are rightly troubled about what to do next as the bloodbath looks all set to continue. 

Not everyone wants to cash out now though, especially if it means selling their crypto assets at a loss. So what's the best course of action for crypto investors to take? 

Stay Calm – Crypto Winter Is Not The End

The most important thing to understand is that the so-called "crypto winter" we're experiencing now is not the end of the line. Crypto winters are the most dreaded season in the cyclical volatility that's associated with the cryptocurrency market and with good reason because it ushers in a period of prolonged bearish sentiment, during which the price of digital assets erodes substantially over a number of months and perhaps even years. 

During crypto winters, digital assets can lose a huge chunk of their value. For instance, the last such episode that ran from early 2018 to mid-2020 saw Bitcoin lose more than 87% of its value at one point, compared to its then all-time high. 

The good news is that, historically at least, the crypto winter has traditionally always been followed by a strong bull run that sees Bitcoin and various altcoin projects hit new all-time highs. So hang on tight for the ride!

For investors, the best thing to do now is to try and assess the situation objectively. It's all too easy to make decisions based on emotion when the value of your portfolio disintegrates overnight, but doing so often leads to regret later on. Some may find it helpful to remind themselves why they got into the crypto market in the first place – do they believe in its long-term success? Or are they just here to earn a profit through trading or long-term "hodling"?  The answer to this question will likely be very helpful for investors as they attempt to emerge from the bear market unscathed. 

Trading is unpredictable at the best of times and should probably be avoided during the bear market. Instead, many investors agree the best way forward is to adopt a dollar-cost averaging strategy. Such strategies have proven themselves in the past during the harshest of bear markets. DCA, as it's known, is a long-term tactic that assumes that the price of crypto will always go up in the long term. It involves buying up small amounts of crypto over an extended period of time, regardless of the price. 

With a DCA strategy, an investor might snap up $50 worth of Bitcoin each week, regardless of its price, over a period of several years, rather than trying to time the bottom of the market and buy a huge amount all at once. To date, DCA has proven its worth in crypto trading. An investor who began buying $50 worth of Bitcoin three years ago would have invested a total of $7,850 over the duration. Using a DCA calculator reveals that the total value of this investment stands at $21,77, representing a gain of 177.42% at today's price. 

Another useful strategy to weather the crypto winter is to look into staking. While your portfolio might be shedding hundreds of dollars in value, the amount of tokens held doesn't change, and staking provides a way to add plenty more. 

Staking allows investors who hold their assets to earn a passive income simply by locking them up in a proof-of-stake blockchain for a period of time. The thing to remember is that staking increases the number of tokens held in your wallet. While those might not be worth much now, their dollar value could become fairly substantial by the time we enter the next bull run if altcoins start to realize their traditional 100%+ gains. 

One of the key advantages of staking is it restricts the ability to panic sell when an asset loses a significant amount of value. Staked assets are securely locked onto the blockchain, and cannot be accessed until an agreed amount of time has passed. 

Look to Trusted Platforms

Perhaps the best advice for crypto traders and hodlers during the crypto winter is to look to trusted platforms that will not only ensure your assets remain safe, but also provide more reliable opportunities amid the wider market turmoil and strife. 

Longtime crypto hodlers understand the importance of safety, especially when it comes to storing funds on centralized and custodial cryptocurrency exchanges. Previous bear markets have led to the collapse of multiple crypto exchanges in the past, with high-profile victims including sites like Mt. Gox, QuadrigaCX and Cryptopia all being forced to shut down, taking their investor's holdings with them. 

Traders who want to continue buying and selling during the bear market would be sensible to rely on trusted exchanges such as Bitcoin.com and Coinbase, which have long and proven track records when it comes to keeping their client's assets safe. The Bitcoin.com and Coinbase exchanges are some of the biggest in the business, with their platforms regularly audited to ensure customers can rely on them. 

Of course, it may be better not to leave any crypto in an exchange at all, especially if not planning to trade. In that case, Bitcoin.com offers the full service Bitcoin.com App, a trusted and non-custodial crypto wallet that's used by millions of people. Coinbase's Coinbase Wallet is another strong alternative. As the saying goes, "not your keys, not your coins". With a non-custodial wallet, the user has full control of their keys and is thus the only person who can access their funds. 

Trusted exchanges like FTX, Kraken and Binance provide some unique trading opportunities. For instance, they offer various crypto equity trading options, which can be excellent diversifiers for any portfolio. Crypto equities are not tethered to the value of any single cryptocurrency but rather, they cover multiple assets. This means they have the potential to grow even if some of those tokens never manage to recover. 

For staking, investors can try out Bitcoin.com's new Verse DEX platform, which is a decentralized exchange that allows users to lock up their coins in various blockchain protocols and earn APY as a passive income. Other reputable DEX platforms include Uniswap, SushiSwap and Curve Finance.  

There are other reasons to stick with these prominent platforms too. For those searching for an opportunity, upcoming coins such as Bitcoin.com's utility token VERSE, which recently raised $33.6 million in a private sale despite the current crypto market turmoil, might be worth a look. VERSE tokens will soon be made available through a public sale. VERSE is intended as a reward mechanism for buying, selling, spending, swapping, purchasing, and staying informed about crypto.

Coinbase meanwhile is the creator of the USDC stablecoin, which is widely regarded as the most trusted stablecoin asset there is. With the recent collapse of TerraUSD and questions around the transparency of Tether USD, USDC coin is widely considered to be the safest option for traders who want to exit their cryptocurrency positions into a more stable asset. 

Bitcoin.com and Coinbase also serve as excellent sources of news around the crypto industry. For investors and hodlers, it's especially important to stay informed and up to date about the market conditions during a crypto winter, and the Bitcoin.com News portal is an excellent place to get trusted updates. Coinbase meanwhile, provides a comprehensive educational portal with information about crypto projects, tips for traders and far more besides. 

Just remember that while no one knows when the market will bottom out, the crypto winter will one day come to an end. With the crypto market's legendary volatility, there will always be moments when investors wake up to see horrific losses in their portfolio. But by staying calm and relying on trusted tools and services, it's possible to weather the storm and emerge in a much stronger position for when the next bull market finally rears its head.