What I can say about 2022 so far is that this year had been tough for everyone holding cryptocurrencies. Many big crypto projects from Terra Luna to FTX have gone to zero overnight.
How did these dramatic events affect your crypto portfolio? Well, here is how my personal portfolio survived these bear market events so far.
Terra Luna
At the beginning of this year, I took a closer look at the Terra Luna Ecosystem, literally at the top of the bull market. In general, it is more difficult to find good investment opportunities during bull markets than right now during the bear market. Luna already had pumped massively.
That's why I came to the conclusion that I already missed the Terra Luna Train. I was lucky that I did not hold any investment in Terra Luna.
I simply thought that I was too late for the Luna party. That's the only reason I had no Luna tokens in my bags. I admit that I also did not see how big the risks involved in the algorithmic stablecoin were.
However, generally good investment advice is this one: If you see a cryptocurrency rising in value quickly over time then you are too late for the big money. The train is already gone. Most likely, a price correction will follow. Sure is that is is no cryptocurrency that will only keep on increasing in price. Better stay away.
Celsius Network
As a result of the Terra Luna crash, Celsius, one of the most popular lending platforms in the cryptocurrency industry with 1.7 million users went bankrupt. I never had an account with Celsius but only for one simple reason to be honest. Celsius had never been available in my jurisdiction. I was simply not able to sign up for Celsius, otherwise, I would have done it. I tried to sign up but Celsius redirected me to a service called Bitwala which was basically a German bank, so I decided to let Celsius go. At this time, I did not know how lucky I had been.
Hodlnaut
Another lending platform that did not survive this crypto winter was Hodlnaut. Hodlnaut had integrated Terra Luna and had significant exposure to its ecosystem. So in the end, the collapse of Terra Luna was also the collapse of Hodlnaut.
I had an account with Hodlnaut and I even wrote a post about Hodlnaut in the past. At that time, I had a small amount of $USDT on the platform. Luckily, I had withdrawn early enough but for personal reasons. I won a Hodlnaut hoody on Twitter but they never send it to me, lol. Sounds familiar? Right, I had a similar experience with ChangeNOW: My ChangeNOW clothes that never came 🙁
At the same time, they followed and unfollowed me on Twitter because I did not shill them hard enough. As a result of all this, I was pissed and had withdrawn my funds. Looking back, I can be happy that I never got my Hodlnaut Hoodie. 🤣
FTX
Then after I thought this was it, another bomb blew up. I signed up for the FTX exchange at the beginning of the year to give it a try and eventually write a post about it. I quickly stopped using the exchange or in other words, I have never really started using it. That's why I have also never written about FTX. I can't really tell the reason why I did not use the exchange after I signed up. However, I thought that FTX was a decent exchange and I never expected such a mess. I just had been lucky that I did not use FTX after I signed up.
BlockFi
I may have been lucky so far but this changed when BlockFi announced that they will halt withdrawals because they had significant exposure to FTX. I have some Bitcoin on BlockFi that I can not access right now. They may be lost forever.
The Bitcoin that I am holding on BlockFi is less than 2% of my overall portfolio. I am highly diversified and I never go all in on anything. This is probably what saved my portfolio. 2% of my portfolio is almost nothing. Of course, losing any amount of BTC is shitty but I would say that it is an amount that disappears in the fluctuation of my portfolio.
Diversification is extremely important to minimize the risks and I can't write it often enough: Don't carry all your eggs in one basket!
My Final Words
At the end of this post, I would like to address the fact that I have written posts about BlockFi and Hodlnaut in the past.
The whole situation simply sucks. I review every project that I write about very carefully. Both projects, Hodlnaut and BlockFi, were no scam projects. The opposite was the case as they run regulated businesses. BlockFi, for example, has been clear that they paused withdrawals due to their significant exposure to FTX. They are transparently communicating the issue and explaining the possible scenarios. I believe they will probably file for bankruptcy.
However, you knew and I knew how they earned interest. They lend out the crypto that you deposited to generate the rewards. Of course, there are certain risks involved. That's why I always pointed out to diversify your investments and not carry all your eggs in one bag.
I hope that you haven't been hit too hard by this brutal bear market and that you will make it to the next bull run that will surely come.
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