Things to Consider Before Buying Crypto in 2023 [A Must Read] – Cryptopolitan

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The year 2022 has not turned out as many investors would have expected. Not only has the ecosystem seen massive price drops, but there have also been several corporate exploits and crashes. In all honesty, it was one of the toughest years since the invention of cryptography. Before we go any further, let’s go back in time to 2021. You will agree that 2021 was one of the most profitable years for the crypto sector. Besides Bitcoin hitting $69,000, several meme projects have turned many people into millionaires overnight.

Sadly, that hasn’t been the case since the start of 2022 and as it nears its end. This year alone, cryptos like Ethereum lost their midas touch and fell from $4,000 to trading below $1,000. And Solana? It was a journey from a single project to the fight against exiting investors. More glaring was that projects like LUNA crashed and users suffered the consequences of mismanaging FTXs. It’s all said and done, it’s over, and nothing can change it. So, looking ahead, what does 2023 hold for the loyal crypto community? This article will go over everything you need to consider before enabling the buy button for cryptocurrencies in 2023.

Bitcoin

Bitcoin? Yes! Bitcoin. Of course, you might be wondering why the number one cryptocurrency by market capitalization is so big. Let’s be transparent if Bitcoin goes down today, trust that the crypto industry will be declared non-existent. So before you think about hoarding altcoins, shitcoins, or any other protocol, take a look at bitcoin. Also, make sure you trade it properly. If this sounds peculiar to you, the best place to start is to stay away from flashy platforms that attract attention and promise you tons of Bitcoins. Bitcoin Evolution is among the proven trading websites that have attracted many traders in the last year.

But now back to the mighty story of Bitcoin. If you look at history, every time Bitcoin rallies, it takes almost the entire market with it. On the other hand, when the price increases, many other cryptocurrencies suffer. This is one of the reasons why it is called the king’s room. So, to avoid making bad investments, you need to assess the trend and momentum of Bitcoins. It can help you make relatively good decisions. However, you should note that the Bitcoin price does not guarantee anything about your investment. Although it provides a hedge, market volatility could still affect other coins’ reactions to its trend.

Decentralized exchanges and tokens

As someone who experienced the market crash in 2022, you may be making a big mistake if you don’t consider decentralized exchanges (DEXs) in 2023. You don’t need to look too far ahead to see apparent reasons. In 2022, the almighty FTX exchange collapsed. This crash resulted from centralization and executives using customer funds to outright gamble with its sister trading company, Alameda. So think about it. Do you still want to place all your funds in a centralized exchange despite what happened? Other exchanges like Binance and Crypto.com had been trying to regain trust with proof of reserves. However, that might not be enough as companies like Bybit and Coinbase have laid off many employees.

To solve this problem, consider decentralized projects like Uniswap or the whole DeFi ecosystem. The signs are already there, especially as the native Trust Wallet (TWT) token surged as much as 130% within weeks of many investors moving their assets off centralized exchanges. For this reason, pundits have suggested that it would be hard to ignore these proponents of decentralization and their tokens. However, there is one thing you need to know. There is no guarantee that the bull market will return in 2023. But if it does, there are some aspects you may need to consider.

Diversification

If there’s one mistake many investors and traders make, it’s becoming emotionally attached to a project. It gets so bad that they make it a point to only invest in the coin or related projects. As someone who wants to excel in crypto investing or trading, consider this a bad decision. Know this, no matter how exceptional a project may be; it is not immune to collapse. So you don’t want to put all your eggs in one basket. The answer? Diversification!

So if you have $10,000 to invest, be sure to spread it out across multiple tokens and coins. Of course, you don’t expect us to tell you what to do, because this article is purely informative. However, if you are at a crossroads, you can talk to financial experts or do your own research before investing.

What are the risks ?

This is a part no one should skip. The sad reality is that many don’t even consider it important. But if you have been a victim of crypto crashes in 2022 or your holdings are depleted, please consider risk management. This is important because knowing the potential risks of any cryptocurrency gives you an edge to make a better decision.

So in everything you do, weigh the potential pros and cons of investing in a project. This lets you know if you need to pour more funds into a tread project carefully.

Be there for the long haul

As mentioned earlier, the crypto market breathes uncertainty. Along the same lines, you cannot say that this is a particular time when the bear market will end. Because of this, you can do yourself the favor of investing money that you don’t need in the short term. Unless you are a day trader, this should be your strategy. Simply put, be in it for the long haul. For example, those who invested in Bitcoin when it was $300. Even with the drop to $17,000, these investors would still be in profit no matter how low the prices go. However, that doesn’t mean yours will take five or six years. But being patient is one of the main advantages of being present in any financial market.

Consider Stablecoins

You will agree that cryptocurrencies can be very volatile. However, if you still want to keep your investment in digital assets without extreme volatility, use stablecoins. Stablecoins are assets in the crypto market that are primarily pegged to the US dollar. So, in cases where Bitcoin or Ethereum drops 56%, stablecoins like USDT or BUSD hardly suffer the same fate.

Well, you might be wondering how that helps. It’s simple. Instead of being a spectator when the crypto market suffers, having assets in stablecoins means you will be significantly exempt.

The essential

Finally, be aware that this article should not be a reference for your decisions. Everything mentioned is the result of the recent event and the likely consequences. There is also the possibility of increased regulation. Indeed, the many hijackings that have shaken the sector lately.

Nevertheless, you can also consider learning more about blockchain technology. If all you want from the crypto market is profits, you may be doing yourself a disservice. More importantly, be sure to do your own research and only invest money that you can afford to lose.

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