- According to Davis, shrewd investors exit their positions when circumstances surrounding the project change.
- He also advised people to think like investors, not gamblers.
The recent market bloodbath caused by the unusual confluence of bearish fundamentals has drastically wiped away the portfolio value of many investors. In response to this, Lark Davis, a popular crypto influencer and a YouTuber has shared important tips to avoid losing money in crypto investment.
Planning is key
The fear of missing out makes the emotions of most new investors cloud their sense of judgment. Davis advises investors to have a plan before they enter the market.
Having a plan means you know what you are doing.
As part of the plan, investors should have a target to sell. Also, they should study the asset, have a reason to buy, understand what it is about, know its use-cases, partnerships and read about its roadmap. These factors can influence plan formulation, and provide a good reason to exit the market at the right time.
According to Davis, investors with good plans will exit their positions when circumstances surrounding the project change.
Investors with enough time to research and formulate plans can go for smaller cap assets. If not, they can go for the big assets like Bitcoin, Ethereum, Cardano, ETC.
Understand the crypto time-frame
It is important to understand that some cryptos have long-term potential, while others have short-term potential. Most of the leading cryptos backed by important technologies like Ethereum fall under long-term prospects. Altcoins like some of the popular and upcoming meme coins usually have short-term potential.
Davis suggests that investors should consider the dollar-cost averaging strategy for longer-term assets to avoid losing money. When assets with long-term potential are spread to diversify portfolios, investors could have money aside for rare dip situations. He suggests that assets backed by important fundamentals with about a 30% to 40% fall in value should be bought.
Minimize the risk
Crypto is one of the riskiest asset classes in the world. Many financial gurus like Andrew Bailey, the governor for the Bank of England have said that cryptos have no intrinsic value, and so investors should be prepared to lose all their investments. However, Davis believes that the risk can be minimized. Investors should understand that the lower the asset on the market cap ranking, the higher the risk.
When investors get into super-high speculative coins, they should keep their positions low, like up to 5% of their portfolio.
He cautioned that going all out on meme coins can wipe away an entire investment portfolio.
Think like an investor, not a gambler…To be safe, always buy on spot. Leverage is for experienced traders.
Protect your capital
Making a profit in crypto investment is vital, but protecting your capital is equally important.
According to Davis, investors should cultivate the habit of taking their capital out of a position after making a substantial profit. Also, they can protect their capital by going back to their plans.
Usually, when the fundamentals of the asset change, or the team fails to implement a technological feature as promised earlier, it is important to sell to prevent a crash. However, investors should never exit their positions when there is a major correction.
The plan is to buy low, and sell high.
The are many opportunities in the market for investors to have multiple sources of income. To avoid losing money, it is important to take profits and put them into a centralized platform or even decentralized finance to earn about 15 % or 16% on USD stablecoins. In other options, profits can be lent, or staked if assets are staking coins like Polkadot, Cardano, or Elrond.
Only a few people take advantage of the incredible opportunities in the crypto market to make huge returns.
Central Bank of Spain requires cryptocurrency companies to register in the country
The Bank of Spain (BDE) made available on Thursday (21) an electronic form for registering individuals and companies wishing to initiate or formalize operations with cryptocurrencies. The call comes a week after the agency formally sent a notice on the subject to the country’s financial institutions.
According to the BDE, registration is mandatory for companies operating in the cryptocurrency sector, regardless of whether they already have registration with the country’s central financial agency, that is, even banks. Such a requirement could confuse financial entities already licensed in Spain, as they are already directly supervised, Coindesk commented.
“The obligation to register in this form applies to all individuals or legal entities that provide exchange services between virtual and fiduciary currency and custody, regardless of whether they are also registered in other administrative records at the Bank of Spain or other competent authorities”, says a short excerpt from the BDE instructions.
Another point is what clarifies the BDE about the registration of individuals who work in the exchange service in Spain, such as P2Ps. Something that the central bank makes clear is that these actors must register “regardless of the location of the service recipients”. However, both individuals and corporations will have to adapt or revise their money laundering policy.
Entities now have one week to start the registration process and deliver documentation. The BDE advises that “it is advisable to submit all documents complete from the start to avoid delays in processing the order”.
Cryptocurrencies in Spain
About four months ago, the BDE said it would provide instructions and the necessary forms to apply for registration. But the instructions have only just arrived, with just 7 days to go before the registration deadline.
Another point of action by the BDE is the lack of clarity, since the entity works as the country’s central bank, but under the supervision of the European Central Bank (ECB).
The Spanish bank BBVA, for example, already has a bitcoin trading and custody service in Switzerland. CaixaBank, the third largest Spanish bank, is also preparing to explore the cryptocurrency sector with startup Onyze.
This Is What Jack Dorsey’s Cryptic ‘705742’ Tweet Might Mean
A simple but cryptic tweet from Jack Dorsey, Founder and CEO of Twitter and payments firm Square, has sparked a debate about the meaning of the post, and whether the well-known Bitcoin (BTC) advocate has any BTC-related plans that have yet to be announced.
As pointed out by many users replying to the thread, the tweet, saying just “705742,” likely refers to a block number on the Bitcoin blockchain. A block with that number was indeed mined on Tuesday at 20:14 UTC, but it is still unknown what else is special about the particular block.
Been updating block explorer for the last 7 minutes— Katie The Russian (@KatieTheRussian) October 19, 2021
Twitter users were quick to pull up the bitcoin block explorer to see if there was anything unusual about block 705742, which at that point had yet to be mined. However, little out of the ordinary could be found.
Others, meanwhile, joked that the number could be Dorsey’s “[end of year] price target for bitcoin,” or that it could be somehow related to “Moscow time,” – bitcoin slang for the value of 1 USD in satoshis.
Speculating further, one user on Reddit suggested that the block number could be the first block to be mined by a new mining system that Dorsey has proposed.
“Maybe the first block that Square mined as part of their [research & development] for a potential public mining platform,” the user wrote, before adding that it looks like the wallet that received the block reward already has both in and outbound transactions worth almost USD 2bn. “Seems like a plausible volume for Square/Cashapp,” the user added.
However, according to various Bitcoin blockchain explorers, the block in question included 2,787 transactions and was actually mined by the BTC.com pool. Moreover, the block was mined almost an hour after the tweet was published.
In either case, as reported, the latest tweet from the Twitter CEO followed another thread from last Friday, where Dorsey said that Square is considering building “a bitcoin mining system based on custom silicon and open source.”
“Mining needs to be more distributed” and it “should be as easy as plugging a rig into a power source,” Dorsey wrote, asking his followers what the biggest barriers are for people who want to run miners.
Facebook Finally Launches Digital Currency Wallet Novi but Senators Want to Close This Project
Amid the Facebook Novi launch, some federal legislators want the social media giant to discontinue the project.
Facebook Inc (NASDAQ: FB) has launched the pilot phase of its digital currency wallet Novi in the US and Guatemala using stablecoin Paxos. Facebook finally launches Novi and is going with Paxos’ USDP after its own native crypto Diem failed to secure regulatory approval. Furthermore, the social media giant heralded the pilot launch in a blog post on Tuesday.
Novi’s pilot launch is more than two years after it was first announced. The wallet will facilitate fast, secure, and free fund transfers between users via mobile smartphone apps. However, all users must register with government-issued identification.
For now, Paxos’ stablecoin will serve as Novi’s transactional currency, while powerhouse exchange Coinbase will provide custodial services. According to David Marcus, head of Facebook’s Novi wallet, this pilot phase will, “test core feature functions, and operational capabilities in customer care and compliance.” Furthermore, it will test the viability of stablecoins as a valid and sustainable form of payment.
Facebook Launches Novi to the Disapproval of US Congress
Amid the Facebook Novi launch, some federal legislators are calling for the social media giant to discontinue the project. Senate Democrats addressed a letter to Facebook CEO Mark Zuckerberg on Tuesday questioning the company’s credibility with crypto. In their own words, Facebook “cannot be trusted to manage cryptocurrency”. The senators base this conviction on the social media company’s past inadequacies in handling cyber risks and keeping consumers protected. Signed by Senators Brian Schatz, Sherrod Brown, Elizabeth Warren, and others, the letter read:
“Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network, even though these plans are incompatible with the actual financial regulatory landscape — not only for Diem specifically, but also for stablecoins in general.”
Part of the Congress letter to Facebook further states:
“We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to market.”
Facebook responded to the Senators’ query through a spokesperson for Novi, suggesting that the company would address the issues raised therein.
Facebook Has a Long-Running History with Federal Lawmakers over Its Operational Practices
In recent times, Zuckerberg and Facebook have locked horns more frequently with Congress. Back in 2019, Congress summoned the Facebook CEO to provide testimony on the Diem project (then called Libra). Zuckerberg’s summoning was the culmination of weeks of tussling, between Facebook and the federal lawmakers, who were skeptical of the project. In addition, the Zuckerberg hearing came just a year after Facebook’s Cambridge Analytica scandal. This may have been another reason federal legislators were agitated against the company.
Another recent red flag raised against Facebook was earlier this month from whistleblower Frances Haugen. Haugen appeared before the Senate Commerce Committee to testify on the threat Facebook posed to users. Some of these include the usage of Facebook itself and other affiliated services, such as photo and video-sharing behemoth Instagram.