27 Oct 2021

How to Profit from a Bitcoin Crash

Any form of a crash in leading cryptocurrencies such as Bitcoin would trigger widespread panic, especially among investors and companies with significant crypto holdings. A Bitcoin crash would have dire consequences on the entire crypto ecosystem, with minor impacts on the global stock markets. The panic would influence many investors and traders to rush for the exits, quickly selling off their crypto positions to avoid massive losses.

However, experts argue we should not only consider Bitcoin burnout as a potential risk. Such events also offer unique opportunities for profitability. The following are some of the main ways to profit from a Bitcoin crash. 

Buying the Dip 

Bitcoin has indicated a constant upward trend over the years and, buying the dip could offer incredible opportunities for making compelling gains. However, doing so requires proper market timing since it can also be challenging to know when Bitcoin has bottomed out. Leading news platforms and crypto exchanges such as provide up-to-date market analytics and price movements, helping traders and investors to keep tabs on the crypto market. Nevertheless, buying the dip can only be successful in a general bull market. 

Bitcoin Holding (HODL)

Holding onto your Bitcoin reserves through the bad times is another strategy recommended by savvy investors. It depends on the assumption that you won't have made a loss if you refuse to sell your tokens at a lower price. That is equivalent to buying and holding onto digital coins through harsh times. However, experts advise you to keep the cryptocurrencies with a larger market cap like Bitcoin since they are more stable and could potentially beat the crash. 

Shorting Bitcoin 

Traders are the ones that primarily use the shorting Bitcoin strategy but it could also offer significant profits if executed correctly. Some popular crypto exchanges provide it as an option, although getting it right requires skills and experience. The process mainly entails borrowing Bitcoin from someone else, selling the tokens, and repurchasing them later to repay the creditor. You could make a fortune if the price drops but a price surge could also expose you to massive losses.

Sell Your Bitcoin for Fiat Currency 

That strategy has been very controversial but may also facilitate significant returns during a Bitcoin crash. Crypto asset managers are synonymous with selling to fiat whenever there is a crash. However, the strategy also requires accurate market timing both during exit and re-entry. The best approach to this is allocating money you can afford to lose and keeping to your plan regardless of the market variations.  

Dollar-Cost Average 

The Dollar Cost average strategy means you continue buying small amounts of Bitcoin despite the looming crash or subdued prices. It encourages investors and traders to purchase Bitcoin regularly without trying to time the market. The strategy could effectively work, especially if the market projects long-term growth. 

Wait Until the Crash Blows Over Then, Buy Bitcoin 

Experts also suggest you stay away from the crypto market until the crash levels out and buy Bitcoin. However, traders should only limit buying Bitcoin to the next halving and upward rally. The strategy assumes the consequent vertical rally would go beyond the previous rates, allowing traders to make significant profits. 

Overall, there are various ways to leverage a Bitcoin crash for profitability. However, the choice of any strategy should mainly depend on your skill level, investment goals, and comfort with risks. If you do not want to take any chances with your Bitcoin reserves, holding would be the best option. Bitcoin short selling might also work for savvy, experienced traders.


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