Your portfolio is down a bunch, all red numbers, we sit in a bear market and you wonder how to come clear again? This post contains 3 easy steps to get your altcoins back in the green.
December 2017 Bitcoin had a price of almost 20.000 USD per Bitcoin. Everyone and their mother was talking about it. The run up started a bit earlier when I jumped in in September. I bought Bitcoin for about 16.000 USD and Ethereum for 450 USD.
As you can imagine with the market still aiming for the moon my portfolio was massively green and yours probably as well. Everyone
Some of my altcoins went down 90% in value, losing me A LOT of money. Might sound familiar to you? Since then we ranged in the 6000’s, with some smaller spikes upwards, but most altcoins didn’t go anywhere either.
Despite this, I have managed to bring my portfolio back from being 80% down overall to around 20% down now. How did I do that?
Multiple ways are possible and they are not in chronological order. You can just do one of the steps for all your coins if you like that.
Step 1: Average down
This is probably the easiest method as long as you didn’t invest all your money into crypto. What this means is buying the exact same coin you are still holding, cheaper, thus increasing your position, but lowering the average entry price.
This has the benefit that as soon as the market goes up again, you come break-even earlier, so more net profits. Or you can dump the coin earlier if you don’t like it anymore.
There is a downside to this though: basic math.
You can’t average down indefinitely. Well, you can, but it doesn’t do much.
If you bought your coin for 100 USD a piece and it is now worth 50 USD, you lost 50%.
If you buy the same amount now for 50 USD, you are still down 25%.
If you buy it again for 50 USD, you are now down 12,5%.
So the effect gets smaller. However, since you bought in more cheap, it gets exponentially higher sooner. Because your bigger position was bought cheaper. I have been using my paycheck to average down on alts I believe in on a monthly basis since january, bringing down most alts into low percentage losses, some even in a plus (since they moved upwards).
Step 2: Cutting losses
Technically that doesn’t bring you your money back, but it has a psychological factor to it.
Atleast, for me, those damn shitcoins I had lurking around in my portfolio sitting at a 90% loss, not even with pretty big positions USD wise were just annoying.
So I just accepted the loss, sold them at 90% off, put the USD value of all those together and bought another coin very cheap. Sure, altough that coin is now already 20% in the green, it doesn’t cover the loss I did with the old coins. But I can work with that money now. It is not locked up.
You never want to have money locked up.
Take the 20% profit for example and buy another cheap coin and aim for another 20% gain, slowly making the money back. While if I just waited for the 90% loss coins to come back it was basically dead money.
Step 3: Buying cheap for hodl
Everything is on a discount in a bear market. Altcoins are bleeding like crazy. So this might be a good time to buy different coins VERY cheap with your fiat currency.
But this way you don’t aim to make your portfolio green in the near future, the coins might even drop more, it is for the long term. When the market finally moves up significantly again, your positioning will be great and you start gaining way sooner.
You have to aim for coins with a long-term plan though. Or rather, coins you see a big future for. Great partnerships, detailed roadmaps which already achieved goals, stuff like that.
I personally did a combination of all of these techniques and I would recommend you do the same. You might not be completely in the green for now then, but you will at least be set up nicely when we reach for the stars next time. Or the moon.
And you’ll get into the green way sooner than someone who just sat there and waited it out.