What to Do With Your Crypto When the Market Tanks

Although global markets have recovered some ground after one of the worst days since the 2008 financial crisis, turbulence caused by the COVID19 outbreak seems set to rumble on a while yet. As supermarket shelves and streets gradually empty, many in the crypto community are left wondering what to do with their digital assets. Do bitcoin holders double down on their belief that it’s the ultimate safe haven asset by hodling? Is it best to liquidate and seek sanctuary in stablecoins like Tether (USDT)? Or do world events provide the perfect opportunity to build up a stock portfolio on the cheap?

There is no easy answer. But here are some options worth considering.

The recent bitcoin sell-off won’t trouble serious hodlers; they’re in this thing for the long haul and their ideological faith in BTC as a safe haven asset is unshakeable. The same is true for enthusiasts of many other crypto networks, even if their currencies may be more speculative.

Hodlers would do well to remember that while bitcoin hasn’t traditionally acted as a hedge against economic turmoil, it could be the perfect hedge against the mismanagement of government money by the powers that be (e.g. massive rate cuts). Bitcoin cannot be mismanaged and devalued in this way, and for that reason could represent an appealing option for investors.

Of course, hodlers will also be well aware of the upcoming third bitcoin halving, and with it, the possibility of a price rally. Stock-to-flow model creator PlanB predicts that BTC will stay above $10,000 after the upcoming supply reduction, before slowly rising to the hallowed $100,000. Music to hodlers’ ears.

Platforms like Cred allow you to earn interest on your crypto, rather than letting it ‘sit’

Perhaps you’d like to keep hold of your crypto, but rather than waiting for the market to vindicate this decision, you want to put it to work. Lending platforms like Cred, Celsius and Nexo let you do just that. Earn interest on BTC, ETH, or stablecoins like USDC and DAI, while being able to reclaim your staked crypto whenever you want. While the Federal Reserve’s slashing interest rates will punish traditional savers, it’s still possible to earn a generous return on your digital assets, paid in crypto, stablecoin or fiat. Lending platforms have reported a rise in applications of late, and the Fed’s actions have done nothing to reverse this trend.

Investors with financial means will see the current market as a gilded opportunity to buy up more crypto at a reduced rate. If you’ve had the presence of mind to keep at least half of your stack in fiat, for times like these, congratulations: time to send some of that Tether over to Binance and start re-upping on real crypto.

Crypto-powered casino FortuneJack lets holders engage their crypto in digital-asset based gambling

The online gaming and gambling industries appear to be thriving amid the coronavirus outbreak – unsurprising given that citizens are being advised to self-quarantine at home. Whether it’s diving into World or Warcraft on the PC, initiating a FIFA 2020 tournament on the PS4, or spinning the slots at a crypto-powered casino, there’s a wealth of ways to while away their time. Clean up at the virtual casino and you’ll increase your crypto stack into the bargain.

The recent market slowdown has motivated many investors to reflexively liquidate their cryptocurrency, exchanging it for cash to cover their short positions or buy up less risky assets. Major derivatives exchanges such as Deribit, LedgerX, Bakkt, OKEx and CME registered trading volume of $198 million in early March, smashing the previous record high of $171.3 million.

Any decision to liquidate will be a pragmatic and necessary one, just as the decision to hodl is motivated by a belief in bitcoin’s status as sound money. At the end of the day, you’ve got to do what you’ve gotta do to keep the lights on, and if you’re cash-poor, there’s little sense in clinging on to crypto when you need fiat.

So, what are you planning to do with your crypto during these apocalyptic end times? Spend it? Lend it? Hodl? Gamble? Choose wisely and stay safe.