Technical analysis is a method of evaluating the strength and weakness of an asset by collecting historical price data to identify trends. It involves using tools like charts, graphs, indicators or signals in order to compare them from past data in order to make predictions about what's going to happen next with the market for a specific financial instrument such as equities, crypto, commodities etc.

Technical analysis is a method of evaluating stocks, crypto and commodities using past market data. The goal here is to determine the future price movements. In contrast fundamental analysis which involves analyzing financial statements in order to assess what fair value would be for that company.

Technical Analysis can be applied to any security with historical trading data, such as cryptocurrencies, forex (foreign exchange), commodities and stocks.

Let’s now dive into the subject and learn more about the different tools and techniques that you can use for technical analysis.

The Market trend‍

‍‍The most important step in learning how to spot a trend is to figure out what one is. For any beginner in technical analysis, knowing how to identify the trend should be the first order of business. Let’s watch this Chart below:

We can here observe the three different trends:

The Uptrend: In an uptrend, the asset is going up and making higher highs with each wave. Each high is also greater than the last one, resulting in a series of higher lows as well that push prices even further upward.

The Downtrend: A downtrend is a pattern of decreasing price that continues until it breaks. It’s called "downtrend" because the asset keeps going down, making lower highs and lows each time they form.

The sideways trend: The asset trades between a dynamic range of prices in an horizontal channel.

You may as well encounter different terms such as “Bearish” and "Bullish" to refer to a trend. The term, Bullish comes from the bull who strikes upwards with its horns thus pushing prices higher; in contrast, Bearish comes from bear who drives down markets by striking downwards with their paws.

Resistance & Support

Understanding the support and resistance levels of a cryptocurrency can help you time your buying or selling to maximize profit. A technical trader identifies these points on their chart so they know where it's best to buy in, when there is likely an upcoming breakout, as well as knowing where not be eager with new investments because prices are more likely than ever before to reverse quickly at this price point. When the resistance level is broken, it usually becomes a support level and vice versa.

Support: Support is a level where buyers tend to concentrate, and this will help the downtrend that has been occurring stop or rebound.

Resistance: A level where an uptrend can be expected to pause or rebound. This is a concentration of sellers and indicates that the market may have reached its peak for now.

Candlestick

Candlestick charting is a popular way to track the market trend.  Candlestick chart, is also known as a Japanese candlestick chart (Developed in Japan in the 1700s, historical records indicate that this tool was first used to track rice prices). This type of financial chart is used to track stock prices or other asset prices. The candlestick's shape can vary depending on the high, low, opening and closing prices of a given day.

A candlestick shows both bullish and bearish price movement over its duration, and gives more detailed information than the simple bar charts. A candlestick looks at the prices during a specific time interval, such as a day. The main feature which distinguishes this from other charts is the ability to plot each day's open, high, low and close values on a single chart.

This method of charting involves plotting price data over time on an open, high low and close basis with wicks projecting out from each end of the body for daily bars or just one day in higher timeframe charts.

Bullish candle: The close is above the opening‍‍ (green)

‍Bearish candle: The close is below the opening (red)

Moving average and (MACD)

The moving average is a technical trading indicator that calculates the constantly changing stock price over time. It smoothes out this data by creating an average of different subsets to help investors make decisions on what direction prices are heading and how long they will continue to change in such directions.  A moving average is a customizable indicator meaning that an investor can freely choose whatever time frame they want when calculating an average.

The Moving average convergence divergence (MACD) is a trend-following momentum indicator that looks at the relationship between two moving averages of an asset's price and gives traders an indication to changes in momentum, strength, directionality and duration of a trend for a given asset.

It combine these 2 moving average: 

-A short-term moving average

-A long-term moving average

‍

Chart interpretation:

The lines on the chart below can be interpreted as follows:

-If the green line (MACD) is above or crosses over the orange line (signal), it means that momentum for a certain market is bullish. 

-On conversely, if the green line is below the orange one, then this shows bearishness in terms of momentum 

-When the lines diverge, it denotes a strengthening of the current trend. However, when they converge, this shows that there is likely to be an upcoming reversal in trends.

-When they cross, this signals confirmation that we have evidence for a change in momentum.
‍

Bollinger bands

Bollinger bands attempt to measure market volatility by creating a band around a moving average. This strategy was created by John Bollinger in the 1980s. They serve as a relative indicator of whether prices are high or low on a moving average.

Bollinger bands are typically used by traders who like to use a long-term approach. This technique can be applied to any major currency pair, as well as commodities and stocks. As opposed to short term strategies that try and capture very small price movements, this strategy works best when combined with a directional view where the trader believes that the market will either go up or down in the long run.

The main disadvantage to this technical analysis is that it is not as effective when markets are flat or choppy (trading range). This strategy can also be difficult to use for novice traders who do not have a good understanding of market conditions, and an entry/exit approach.

‍

News are a big influencer of crypto prices

Cryptocurrencies are heavily influenced by speculation, and even a small piece of news can trigger multiple price reactions by investors. 

For example, when Bitcoin Cash was launched on August 1st 2017, it resulted in a sharp decline in the price of Bitcoin as well as other cryptocurrencies as investors feared that a new competitor could undermine the value of existing cryptocurrencies.

The use of advance statistical techniques helps you to take into consideration past data to generate price forecasts. The best way to do this would be to look at historical prices and volumes for cryptos, and compare them to current data. This allows analysts and traders to gain some degree of insight on how the market price will react to future events.

Our aims is to help you grow your knowledge about trading and cryptocurrencies. That's why we're here to help you better understand Cryptocurrencies and trading technics. We want everyone who uses Tap not only to feel informed about market trends but also be inspired by crypto culture, which drives people like you and me into a passionate future for this technology.

If you wish to learn more find more resources in our dedicated education centre available here: Crypto Basics

The age old question, when will all the Bitcoins be mined, has been on everyone's mind at least once and today we are going to go over exactly how long it will take to mine all Bitcoins.

There are a few chapters we need to cover first. For one we need to look at Bitcoin’s total supply, followed by the halving mechanism that Satoshi Nakamoto himself implemented, and then we can set about working out when the last Bitcoin will be mined. Sound good? Dive in and join us for the ride.

Bitcoin’s Total Supply

When Bitcoin was first announced to the world in a whitepaper in 2008, the public was introduced to a new kind of monetary system. Unlike the fiat system that all countries operate off, these cryptocurrencies presented a digital answer that could navigate value around the world in seconds and didn’t rely on any banks, financial institutions or governments to operate them. 

Created as a response to the 2007 - 2009 global financial crisis, the mysterious entity known as Satoshi Nakamoto chose to also make the currency deflationary. Unlike its fiat counterpart, Bitcoin was created to increase in value over time, proving to be a viable store of value. Written into its code was the fact that only 21 million Bitcoin will ever exist, ensuring that the new age currency would have a deflationary nature to it. 

Of the 21 million BTC that will ever enter circulation, as of May 2021 a total of 18.7 million have entered the market. This accounts for roughly 89% of the total supply of Bitcoin, which might lead one to believe that the end is nearer than we think. However, think again.

The Halving Mechanism

‍

Another ingenious idea that the great Satoshi Nakamoto incorporated into the nuance payment system is the halving mechanism. Through the use of blockchain technology, every 210,000 blocks, or roughly four years, a halving mechanism is automatically implemented into the system which reduces the mining rewards (also known as block rewards). This part gets a little technical, so let’s recap. 

All transactions on the blockchain are stored in blocks which are chronologically linked to one another through the process of mining. Miners on the network verify and execute all Bitcoin transactions, and in doing so receive a fee, known as the miners reward. When Bitcoin was launched in January 2009 the miners reward was 50 BTC, however through the halving mechanism, every 210,000 blocks this reward halves. Twelve years later the miners rewards for verifying the transactions and adding a new block to the blockchain is 6.25 BTC. 

This thereby controls the amount of new Bitcoin entering circulation. As fiat currencies are printed and minted, cryptocurrencies are mined. The Covid-19 pandemic saw many countries print more money to distribute to its people and in turn boost the economy, however the long term effects of this can be devastating due to rising inflation and the decrease in value on a global scale. Bitcoin, however, due to the controlled nature of the deflationary currency is set to increase in value. 

How Long Will It Take To Mine All Bitcoins?

‍

Now that we’ve covered the basics of Bitcoin’s total supply and the halving mechanism controlling the influx of coins entering into circulation, it’s time to establish how long it will take to mine all Bitcoins. 

Based on the table below, we can see exactly when the next halving is due to take place (in 2024), when the miners reward will halve again to 3.125 BTC. While the amount of BTC received for mining a block decreases, bare in mind that the value undergoes significant increases. After that the next halving mechanism is due to go into effect in 2028, followed by another in 2032.

As you’ll notice, the halving in 2032 will be responsible for mining the last chunk of the 99.21872% of the total BTC ever to exist. This leaves 0.78128% remaining. Due to the nature of the halving mechanism, it is believed that the very last Bitcoin will only be mined in 2140. 

In answering the question on how long it will take to mine the last Bitcoin, the answer is an estimated 119 years. Which, facing the cold hard truth, we are unlikely to witness in our lifetime.

‍

Time To Buy Bitcoin?

Considering that the cryptocurrency has witnessed gains taking it from $0.003 to roughly $55,000 in just over a decade, consider what the Bitcoin price might be in the next ten years, or twenty, or 100? Whether you’re buying to invest or buying to trade, Bitcoin has proved time and time again to be a worthy investment. Consider bagging yourself some BTC with the convenience of the Tap Global app. The app allows you to not only buy the original cryptocurrency, but to sell, store and spend it as you please too. If you’re wondering when the last Bitcoin will be mined, it’s probably time to tap into the future. 

Download on Android.
Download on iOS.

‍

Much like traditional stock portfolios, crypto portfolios can too be balanced to ensure a spread of returns and risks over the asset class. Building a diversified cryptocurrency portfolio can be done in many ways, however, in this article, we will be exploring a general approach that investors can use to build their own. 

From thoughtful diversification to asset allocation to buying your cryptocurrencies, the road to building a balanced crypto portfolio is not a complicated one. It will require some upkeep though, so be sure to factor in that you will need to balance your portfolio regularly. 

Starting with the basics, a cryptocurrency portfolio is a collection of varied crypto holdings held by an individual (these portfolios hold one asset class, while others can hold multiple asset classes and would require further asset allocation).

Some investors also choose to use a third party tracker which calculates the portfolio’s holdings and profits. A balanced portfolio will have a collection of coins, products and tokens, each with its own risks and rewards.

It should have a mixture of high and low market cap coins and might look something like this: 35% Bitcoin, 10% Ethereum, 25% stablecoins, 15% NFTs, and 15% altcoins (this is an example based on the current climate of the cryptocurrency market and not financial advice).

The 5 main types of cryptocurrencies on the crypto market

Before we start building our portfolios, let’s begin with understanding the 5 main categories that can be found on the cryptocurrency market today.

Most of the 20,000 cryptocurrencies on the market at the moment will fall into these options.

Payment Focused

Consider these the original first-generation cryptocurrencies, starting of course with Bitcoin. Many earlier projects were designed as systems of transferring value, take for example Ripple (XRP), Litecoin (LTC) and Bitcoin Cash (BCH). 

These types of coins typically have a high market cap.

Stablecoins

This category refers to all coins that are pegged to a fiat currency and commodity. These coins naturally bypass any volatility, ensuring a stable anchor in your portfolio and a safe haven for when the markets experience a dip.

While they might seem to represent more traditional assets, stablecoins provide a valuable contribution to the crypto ecosystem.

Examples include PAX Gold (PAXG) which is pegged to the price of gold, while options like Tether (USDT) and USD Coin (USDC) are pegged to the US dollar. 

Utility Tokens

Utility tokens are unique to their ecosystems and generally offer a product or service. This could come in the form of a coin used to pay transaction fees on a network, or a coin created to launch a crowdfunding initiative.

Examples include coins found on dapp and smart contract development platforms, Ethereum (ETH) and Binance Coin (BNB). 

Security Tokens 

Much like the traditional securities in the stock market, security tokens can take on many forms.

These digital forms of traditional securities have been integrated with blockchain technology and span across three categories: equities, debt and a hybrid of debt and equity. This can range from representing a bond issued by a project, equity in a company, or even voting rights. 

Governance Tokens

Governance tokens offer holders voting powers and a share of the project’s revenue. Similar to utility tokens, the value of a governance token directly relates to the success of the underlying project. Examples include Uniswap (UNI) and PancakeSwap (CAKE).

How to build a balanced crypto portfolio

When it comes to building a well balanced crypto portfolio there are plenty of different schools of thought.

These are our top recommendations, however, we encourage you to do your own research and ultimately go with what feels right. 

1. Diversify Risk

Ensure your crypto portfolio has an adequate amount of risk tolerance by incorporating high, medium and low-risk coin options, portioned appropriately.

It’s important to first establish what level of risk you are willing to take, and plan your portfolio accordingly. 

2. Include Stablecoins

While these aren’t associated with wild gains, stablecoins help to provide your portfolio with liquidity and are key to many DeFi dapps.

They also allow traders to quickly and easily exit a position or lock in gains whether in a bear market or a bull market.

3. Monitor The Market

Ensure that you are checking in to see what is happening in the market regularly and adjusting your well balanced crypto portfolio to best manage this.

Crypto markets can still be very volatile, so ensure that your trading decisions reflect what is happening. 

4. Monitor Your Emotions

This might be one of the biggest overseen aspects of trading but ensure that you have a grip on your emotions as they can play an integral part in your decision making.

Fear and greed are strong contenders when it comes to making logical trading decisions, make sure that these are not influencing any of your trades.

Don't let greed interfere, changing potential big gains to huge losses. Things can go terribly wrong when emotions are behind the wheel of trading decisions.

5. DYOR

We cannot stress it enough - always do your own research when exploring engaging with other cryptocurrencies. Never engage in a project that you cannot fully explain to another trader. Crypto involvement requires a substantial amount of due diligence.

While there is value in taking advice from a strong trader, ensure that you do your own vetting of the project before blindly trusting a stranger, this is your own money after all. 

6. Onlycommit what you’re willing to lose

As a golden rule of thumb when it comes to allocating funds, only allocate what you're willing to lose.

If you’ve made trading decisions that are causing you sleepless nights, consider a different approach, and ensure that should something go wrong that you have the financial means to stay standing. Your overall portfolio should be correctly balanced in order to ensure you can have rest-filled nights.

How to use a portfolio tracker

While typically used for short-term and day traders, trackers can also provide value to long term investors. Trackers provide a reliable way of monitoring the performance of your low, medium and high risk assets.

Crypto trackers also allow investors to measure their results across several blockchains and wallets in real-time, allowing one to directly measure the success or losses of their crypto holdings.

Portfolios typically involve holding multiple coins across various blockchains, so finding a compatible and suitable portfolio tracker makes sense.

First, you’ll need to select a good portfolio tracker that best suits your needs. Below we’ve outlined the top crypto portfolio trackers, although it's best to get a feel for the platform before diving in.

For instance, Pionex is better suited to high volume investors while Delta is better suited to beginners. See our selection below of top options on the market at the moment.

• CoinMarketCap
  One of the most used sources of information in the crypto space, CoinMarketCap also provides tracking functionality. Users can enter their coins, what price they were bought at and monitor their progress.
• Pionex
  Favoured to high volume investors, Pionex provides a more advanced option when it comes to tracking your crypto portfolio.
• CoinGecko
  Most commonly known as being a data aggregator, CoinGecko also allows users to track over 1,000 coins across its mobile and desktop crypto trackers.
• Delta
  Delta not only provides a very user-friendly crypto tracker, it also allows users to track a wide range of assets including fiat currencies, stocks, bonds, futures, and ETFs.

Aside from the look and feel, other factors to consider are safety and security, and whether it supports the wallet and coins in which you've allocated resources.

Building your crypto portfolio manually

When you’re ready to start building your well-balanced crypto portfolio, you will need to find a reliable platform and wallet on which to do so.

Ensure you stick to a regulated exchange and that the security behind the wallet you choose is of high standards. 

Tap mobile app offers a secure and convenient platform through which users can buy, sell, trade and store a wide range of cryptocurrencies. Learn more here on our website available on both desktop and mobile devices.

Next, you will need to decide on which coins you'd like to engage with, ensuring that you strategically distribute your capital with appropriate weightings.

Take cues from our Types of Cryptocurrencies above, deciding on how you wish to allocate the coins in order to build a balanced crypto portfolio.

We encourage you to conduct extensive research in this phase: A golden rule of engaging with cryptocurrency is to comprehend what crypto is before allocating any funds to it, as well as to understand each individual coin.

‍

Used across both the crypto market and traditional stock markets, return on investment (ROI) is a financial measure used to calculate an asset's growth and efficiency over a period of time. This useful measure has been used for decades to determine the success of one's investment.

In this article, we'll help you learn how to calculate the ROI on your investment so that you can implement it across your portfolio to determine your successes. Understanding your assets' ROI might lead to improved sales and revenue and solve a problem that many traders face time and time again.

Many businesses offering trading services might include a project ROI in their monthly or annual report to a customer, illustrating the successes of the site in black and white figures. However, be cautious when a company uses a set amount of return on investment statistics in their advertising, not even the top trading experts are able to predict with exact certainty the events, analytics and metrics that will take place in the future.

How To Calculate ROI

Bear with us as this gets slightly technical, it will all make sense in no time. This formula essentially revolves around determining the overall profit or loss one has made from a particular investment. 

The formula used to determine ROI is ROI = (FVI - IVI) / IVI * 100%. In this formula, the FVI stands for the final value of an investment while IVI stands for the initial value of an investment.

Looking at a practical example, say you bought $1,000 worth of Bitcoin in January 2020 when it was trading for $8,807. Two years later you sell your Bitcoin in January 2022 when it was trading at $43,704 for $3,960.

In this scenario, the IVI is $1,000 while the FVI is $3,960. ROI = (FVI - IVI) / IVI * 100% translates to:

ROI = (3,960 - 1000) / 1000 * 100%

ROI = 296%

This equation is considered a base formula as it does not include additional factors like fees and expenses incurred when storing the asset. In order to establish the true ROI on your investment, you would need to determine what additional costs were incurred (transaction fees for example) and use the following formula:

ROI = (FVI - expenses - IVI) / IVI * 100% 

Additional Elements To Consider When Calculating ROI

One thing that ROI does not factor in is the risk associated with the asset. For example, higher ROIs typically come with higher risks while assets with lower ROIs typically hold a much lower risk in terms of gaining returns. 

This holds true in the crypto market where new coins can suddenly soar in price creating a strong ROI for those that invested early. However, this ROI data will not be the same for an investor that enters the market at a later stage, and the risk will be much greater. Be wary of analysts using ROI statistics in digital marketing to make far-fetched conclusions about an asset's future success. Always use Google as a tool to verify the information, particularly for smaller coins.

Another limitation of this approach is that time is not taken into consideration. For instance, if your investment appreciates from $100 to $150, the ROI will always be 50% whether this happened over one year or ten years. This issue can be solved by using another formula, known as the annualized ROI. 

What Is Annualized ROI?

This method illustrates the standardized annual rate of return on investment by considering the investment's tenure, providing insight into the money an investment product has yielded over a certain period of time. This formula will calculate the investment's average performance each year over the entire period. 

The formula for annualized ROI is Annualized ROI = ((1 ROI) 1/n - 1) * 100%. Here, n represents the number of years of the investment. 

Using the latter example above, your $100 growing to $150 will present an annualized ROI of 50% for one year while the ten year annualized ROI is 4.14%. A substantial difference, and one you wouldn't pick up on from using the standard ROI formula. 

What Is Bitcoin's ROI?

As the world's first cryptocurrency, Bitcoin has seen some incredible increases in price. Analysts often use the formulas outlined above for tracking the digital asset's short-term, medium-term, and longer-term ROI. 

As of January 2022, these ROIs are calculated using the trading price of $43,834.36 (at the time of writing). 

Short-term - 1 year (January 2021)

BTC Price: $33,922.96

ROI = (43,834.36 - 33,922.96) / 33,922.96 * 100%

ROI = 29.29%

Medium-term - 2 years (January 2020)

BTC Price: $8,807

ROI = (43,834.36 - 8,807) / 8,807 * 100%

ROI = 3,977.21%

Longer-term - 5 years (January 2017)

BTC Price: $818.41

ROI = (43,834.36 - 818.41) / 818.41 * 100%

ROI = 5,256.03%

These are wildly impressive results, particularly when compared to the traditional stock markets. Excuse us while we go question our personal ROIs for our crypto investments.

‍

Bitcoin, and many other cryptocurrency markets, have seen a phenomenal influx of funds recently, with the overall market cap reaching just shy of $3 trillion. This bullish market presents an advantageous set-up to make money. Trading, while profitable, introduces an array of issues that may be hard for newbies to overcome. 

If you are looking to make profits without the added risks then investing may be your best bet. But before you get into investing, there are some basic concepts you will need to grasp in order to make an informed decision. In this article, we're covering how to invest in Bitcoin and cryptocurrencies and what the difference is between investing and trading.  

Investing vs Trading 

To make a long story short, investing refers to long-term holdings while trading refers to short-term holdings, both are seeking profits within the market.

Generally speaking, investors are after greater returns over a longer period of time while traders seek to draw smaller, more frequent returns from rising and falling markets in a much shorter time frame. Trading thrives off of volatile markets, whereas investing seeks more stable options for longer-term rewards. Both provide the opportunity for profits, but each has benefits and flaws of its own. 

For newbies and those who have a more busy lifestyle, investing is the best option as it does not depend on your understanding and monitoring of market movements. Trading on the other hand is more of a career path, it requires considerably more time dedication, while also holding greater risk. As the saying goes, all traders should be investing but not all investors should be trading. 

It's important to note that both investing and trading have their own tax regulations and it is on the individual to find out and adhere to these laws. Bank on paying taxes on any returns made, as a general rule of thumb, but always research the guidance information relevant to your jurisdiction, i.e. tax paid on crypto returns will vary from the UK to Germany.

Bitcoin vs Altcoins 

Bitcoin, the first cryptocurrency to come into existence, boasts an impressive market cap and is the highest valued cryptocurrency to date. After it launched in 2009, many cryptocurrencies followed suit and were coined "alternative coins" which soon became shortened to altcoins. While these originally focused on payment-centred cryptocurrencies, today the term altcoin essentially refers to any cryptocurrency that isn't Bitcoin. 

When it comes to investing and Bitcoin vs altcoins, Bitcoin has proven to be the most valuable coin however there are plenty of small to medium cap markets that experience incredible growth. Consider Bitcoin's large price point to be a hindrance to short term investments, but more powerful in the long run. 

To put it into perspective, data shows that if you invested $50,000 into Bitcoin when it was trading around $60,000, you would have to wait for Bitcoin to hit $120,000 before you double your investment. However, if you invested that same $50,000 into an altcoin when it was worth $1, it would only have to reach $2 for you to double your money which is a lot more likely than Bitcoin doubling in the same period. However, this doesn't ring true to all altcoins and one must always do thorough research before investing. 

Altcoins come in all different shapes and sizes, some tackling industries from medical to real estate, all backed by the financial aspect of blockchain technology. Investing is about more than just profits, it is also about the project. Is it something you are interested in and could benefit from in the future? Is it something that could change the world for the better? Does it have real-world use cases? 

All of these are factors to consider when planning to invest. The potential behind the project is oftentimes what secures it as a viable investment option, promising great opportunity for adoption, stability, and growth. At the end of the day, investing in altcoins requires a considerable amount of research.

Where And How To Invest

The first thing you need to consider is which exchange and wallet you will be using. Long term investments mean you need to find a platform you can trust to store your funds in a longer-term time frame. This is the key to securing your investment, rather than coming back a year or two later to discover your funds are gone. 

Some people recommend companies offering hardware wallets to reinforce that investment "do not touch" mindset while others prefer web wallets that are more accessible. It's really up to you which platform you decide you go with, considering all the features and factors, your needs, and confirming your decision with your own research. Make sure to stay up to date on the platform you are storing your funds on to be alerted of any software upgrades, if any hacks occur or if a platform closure notice goes up. 

At Tap, we have integrated a hyper-secure wallet into our mobile app, allowing anyone, anywhere to securely store their funds. We are licensed and regulated by the Gibraltar Financial Services Commission and hold insurance of up to $100 million, ensuring the protection of your digital assets at all times. The mobile app also grants users access to a number of cryptocurrency markets, where you can freely buy, sell and manage your portfolio.

Final Thoughts 

Investment as a term isn't a difficult concept to catch onto, but finding the right investment is the important part. It is always recommended that you do your own research, and in-depth analysis at that, and don't be scared to diversify your assets. The investment world is yours for the taking, so get out there and start building a lucrative investment portfolio.

‍

FAQ

What is Bitcoin and how does it work?

Bitcoin is arguably this century's greatest innovation: a decentralised digital currency built on blockchain technology that allows for the transfer of value across the internet. This peer-to-peer digital cash system facilitates international payments at a fraction of the cost and time that fiat transactions of that nature take and are as simple as sending an email. Instead of being controlled and managed by banks or government entities, new coins are regularly entered into circulation through the process of mining. You can learn more about Bitcoin, blockchain transparency, and its lack of intermediaries from our guides.

Should I invest in Bitcoin?

As mentioned above, Bitcoin holds great market potential for both investors and traders. Since 2009, Bitcoin has performed well in terms of displaying strong ROIs, something most investors see as a benefit for future gains. However, investing in Bitcoin comes with its own risks that each individual should consider before entering the market. As a rule, never invest more than you are willing to lose.

Which are the three biggest cryptocurrencies?

Currently, based on market cap the three biggest cryptocurrencies are Bitcoin, Ethereum and Tether.

What are the alternatives to Bitcoin?

Alternatives to Bitcoin are referred to as altcoins. While there are thousands of cryptocurrencies on the market, not all are worth investing in. It's best to research each coin individually and weigh up the project before investing in it. Consider a cryptocurrency as a company, and purchasing coins as buying shares in the business.
‍

Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions or other material as financial advice. The information herein does not constitute an offer to sell or the solicitation to purchase/invest in any crypto assets and is not to be taken as a recommendation that any particular investment or trading approach is appropriate for any specific person. There is a possibility of risk in investing in crypto assets and investors are exposed to fluctuations in the crypto asset market. This communication should be read in conjunction with Tap's Terms and Conditions.

This week has presented landslide losses across the crypto industry, with the entire market valuation dropping over 20% in just a week. As cryptocurrencies bleed money, where does this leave investors? We explore why the market is crashing, and what you can do to protect yourself over these turbulent market conditions.

‍What Caused The Market Crash?

The recent market crashes are believed to be a knee-jerk reaction to official data being released that indicated imminent rising inflation rates. Last week, the US Federal Reserve announced plans to raise interest rates by 0.75%, the largest single hike in the last three decades. Analysts fear that this could be the catalyst for a recession. 

Following this news, investors were quick to liquidate their cryptocurrencies, causing a massive $260 billion to exit the market over the course of a weekend. 

It wasn’t only the crypto market that was affected. Stock markets suffered a similar fate, with the S&P 500 falling 4%, the Dow Jones -2.8% and Nasdaq dropping 4.7%, reaching new lows for the year. As the US stock market officially entered bear territory, this had ripple effects across the rest of the global stock markets. 

Following the weekend’s news, Bitcoin dropped to $23,000, lows not witnessed since December 2020. As investors pulled their money from riskier assets (tech stocks included), the markets took a wild tumble. 

‍What Lies Ahead?

Before we touch on survival tools, let’s first look ahead to what will happen next. Analysts are predicting that we’re likely in for a few more weeks of volatility as the markets recover from the mass sell-off and incur probable further losses. Long term, however, insiders are predicting much bigger highs, as has been evident in trading history. 

Due to the cyclical nature in which most asset markets move, trading goes through periods of expansion, peaks, recession, and recovery. As we move through the recession period, while fear is the dominant emotion, hope should be dished out too as recovery is on the horizon. 

‍How To Survive The Recent Market Crash

As the crypto Fear and Greed index points to “extreme fear”, investors are quick to follow suit and sell their digital assets, often incurring great losses. Here are 5 tips on how to survive the current market crash:

• Hold tight. Crypto markets are notoriously volatile, and sitting through a crypto winter is a right of passage of sorts. Leave your assets in a secure location (look out for the incoming Tap’s Earn program where you can earn interest on your cryptocurrencies that you are not actively using). Try not to get too caught up in the recent crypto losses. This too shall pass. 

• Educate yourself. Take the “downtime” to learn more about new coins, allowing yourself the time to deep dive into the projects and the leadership behind them. Look to communities of like-minded traders to find new insights. Broaden your crypto understandings.

• Look to cryptocurrencies that are making gains. While most of the markets are in the red, some coins are doing well. Seek to understand why some coins are thriving and what about them is making them resilient to the otherwise dire market conditions. 

• Evaluate your trading strategies. Think you could have made better decisions prior to or during this market crash? Observe and evaluate your current trading strategies and make adjustments based on your most recent experiences. It will never be as fresh in your memory as it is now. 

• Lurk at the dip. With prices down to the lows of 2020, seasoned investors are taking the opportunity to accumulate these crypto assets at low prices. However, it must be said: never invest more than you’re willing to lose. 

‍Ride Out The Crypto Winter

As the famous American investor and mutual fund manager, Peter Lynch said: "In the stock market, the most important organ is the stomach. It's not the brain." If you have not liquidated your cryptocurrencies, the losses you see on the screen are not yet realised. Keep hodling. 
Hold tight, grit your teeth and push through the chilly crypto winter, the markets will eventually recover as they always do.