Six Crypto Winter Advices That Consultants Should Give To You

The crypto winter might be stressful for us with a bunch of failures, bankruptcies, and collapses that have already been happening. Crypto consultants should not only help the investors keep calm but also help them to avoid the potential market risk and prevent them from suffering from significant market losses. There are specific ways to help us to avoid significant market loss.

Comprehend the Project’s Funding and Backing

For digital asset exchanges, adequate funding means that the exchange has enough capital in reserves to handle liquidations. In decentralized finance, the mass participants help to keep the project alive. In the recent treacherous scandals of stablecoins, collaterals are backing the project.

Look for the Founders’ and Developers’ Information

The beginning of the blockchain was a haven for anonymity. We still not aware of who is the blockchain inventor Satoshi Nakamoto. However, blockchain has already been through 13 years of development. Project developers should not be kept anonymous. Projects with clear information about the founders tend to be more reliable and trustable.

Read White papers

Many project developers, founders, and leaders are mostly not anonymous; they are also in regular contact with the communities of investors they are creating. Whitepapers of the projects also well explain the intention and future vision of the project.

However, sometimes things are not that simple. Some projects with clear whitepapers fail, for example, terra. Projects with no serious plans will sometimes thrive, like Dogecoin and Shiba Inu. In all, it’s essential to review the project’s whitepaper and have a logical assessment.

Do Not Skip Common Sense.

“If something is too good to be true, it may not be real.” This could be an essential investment dogma in the crypto space. Many new investors set overly high expectations just entering the market. However, they should understand that some early investors investment returns, from Bitcoin or Ethereum, are that they waited for years to take their returns. Moreover, crypto is already not in the time when many people were speculating about its worth. At that time, huge returns over a short time were possible. As more people join the DeFi investment, investors should know that the yields DeFi generates should come back to earth following its mass adoption. If something claims to create returns over 10%, there has to be a good reason they could achieve so. At least the reason for the hefty return should be written in their whitepaper. Clients and investors may always expect too high, and consultants must guide them to make logical assessments and choose a sustainable project.

Consider Cold Storage

Hot storage is associated with active wallets, crypto exchanges, or crypto brokers. Crypto investors hold cold storage in offline devices, and it’s the most secure way of crypto storage. If the investor has concern over his crypto safety, saving the asset in cold storage is suggested.

Apply the Suggestions from Regulators

Sometimes managing volatility and avoiding risks are too much work. But regulators usually help to clean the potentially harmful projects; Consultants can keep following the regulations. This will help to give more clarity to the investors. However, investors usually will not wait for principles to assess specific projects and invest in them. So the financial advisors can keep up with the rules and give suggestions to their investors when needed to help them steer clear of tokens or projects that may be killed, harmed, or radically deleted.