Cryptocurrency investing comes with lots of volatility, with “nasty downturns” to match any “massive gains,” says Wendy O, a popular crypto TikToker, who has some advice for investors on how to plan ahead for it.
NextAdvisor covers Wendy’s recent interview with TIME where she outlines her mental framework for evaluating cryptocurrency projects and navigating market volatility.
Against the backdrop of a tough January for the crypto market, Wendy informs that this is just part of investing in this asset class, and that broad based sell-offs like we’ve been seeing should be expected after recording such massive gains the year prior.
According to Wendy, investors need to remember five key things when dealing with crypto volatility early on: Know why you invested in the first place; Set clear goals; Diversify your portfolio; Don’t give in to FOMO or Hype; Consider Dollar-Cost Averaging (DCA).
Though it’s a learned skill over time, long term success in a volatile market like crypto depends on being able to stay level enough to react methodically to changed market conditions.“You need to be able to switch your bias if the market changes. If you think and talk in absolutes, you’re probably going to end up losing money.”