- The coronavirus still influences the global financial markets and leads to further losses for different financial assets like Bitcoin and stocks.
- Experts of the industry discuss the best strategy to get the best out of a crypto portfolio.
The coronavirus continues to wreak havoc across the planet – socially, geopolitically, economically. In the financial markets, the axe is swinging as investors scramble to cover their positions and stocks plummet. The Federal Reserve and other central banks, meanwhile, have initiated emergency interest rate cuts in a bid to arrest the immense uncertainty gripping the market, and a recession is on the way. It feels, to many, like end times.
But of course, it isn’t. Like waves, markets rise and fall – and rise again. Ebb and flow, slide and recover. The question to ask is, are there any opportunities to emerge from this current phase in a positive position? What should you do with your money (fiat, crypto), your stocks, hell, your time? Many people have a lot more of the latter as government-imposed lockdowns empty streets and the morning commute is temporarily halted as workplaces close.
There are winning plays to be made in the present economic climate and you owe it to your portfolio to consider them.
How to Survive the Current Market Feeding Frenzy
So what might you consider doing as Rome burns?
- Arbitrage: The current market volatility presents a great opportunity to arbitrage stablecoins and other digital assets, taking advantage of tangible price differences between assets and platforms to turn a profit buying and selling.
- Buy low: The overselling of reboundable assets such as BTC makes “buying the dip” a no-brainer. Many bitcoiners anticipate the crypto to rally hard after losing roughly 50% of its value in a day. There’s money to be made on these swings if you’re brave enough to BTFD.
- Trade your way to £100K: StormGain is currently holding a trading competition where you can demonstrate your mastery of the markets without risking a satoshi. You’ll be trading on a demo account but the prize at stake is very real: £100K of USDT will be shared among the best 500 traders for the month.
- Become a juror: While the world is on lockdown and under self-quarantine, most real world businesses – courts included – have been shut down. It’s business as usual on the web, though, and by participating as a juror in one of Kleros’ decentralized courts, you’ll be rewarded with crypto for making a fair judgement based on the facts of the case.
- Have a flutter: Any market activity could be seen as a gamble right now, but what we’re talking about is a conventional online casino, not to be confused with the crypto casino markets. Don’t place all your bitcoin on red; but trying your luck at a bitcoin-powered casino like FortuneJack might engender more gains than playing the stocks right now.
- Lend: With crypto-backed lending and borrowing portals like Aave and Nexo you can earn a passive income from your digital assets. Better still, you can opt out and re-take control of your coins whenever you please.
Look at the Winners and Losers
Severe disruption to travel networks caused by no-fly zones and cities in lockdown has made tourism one of the worst-hit sectors. Cruise companies and airlines are hurting badly, with Royal Caribbean shares dropping 31.8% and Boeing shares suffering their worst one-day drop since 1974. On March 16, the S&P 500 suffered its third biggest daily drop of all time, and oil is at its lowest value per barrel in 17 years.
As for hotels and travel agents, as well as cities which depend on tourism to balance the books, things are set to get worse before they get better. Only the strongest will survive.
The cancelation of live events – sports, concerts, conferences – as well as the gradual move towards general self-isolation has been well documented and much bemoaned, but while this will hurt the pockets of many, it will also be a boon for other markets: remote-first software companies, for example, online gaming portals, streaming platforms like Netflix and Amazon Prime.
Remote freelancers in all industries – those who can troubleshoot problems armed with nothing more than a laptop and an internet connection – will also be upping their rates right about now, and if you hold stock in an online education platform, the sort that might be mobilized by independent and state-owned schools that have sent kids home, it’s only going to move one way.
Needless to say, the supply chain has been crippled by the pandemic, and so any company/sector reliant on efficient supply chain processes is destined to experience major turmoil. On the other hand, anyone with biotech stocks like Gilead Sciences – the first drugmaker to advance to late-stage testing of a possible antiviral treatment for COVID19 – is likely to fare well.
This storm has not yet passed. As COVID-19 spreads, expect more disruption and investor panic. Those who follow the tenets of Sir John Templeton may look back on the corona chaos with a gimlet eye: “The time of maximum pessimism is the time to buy, and the time of maximum optimism is the time to sell.”
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