Hello everyone. Today my post is something that we can all relate to. A couple of days ago, President Trump threatened 100% tariffs on China following the latter's decrease of rare earth exports. The markets including crypto immediately took a dive. Most tokens decreased in value by over 50% while Hive itself decreased to a ridiculous amount of three cents on Binance before bouncing back to fifteen cents, still down from the previous price of eighteen cents. To most people, the sudden drop in value looks scary, especially those who has positions on margin and hit their call on the sudden dump. Such portfolios could be wiped out. For us holding crypto or other securities, how do we deal with market crashes?

What's the Reason for the Crash

My first step is to find reason or clarity why the crash happened. The reason may determine if the crash is temporary or would signal a long bear market. In the recent crash, the most likely reason was Donald Trump's tariff on China. We have seen this before in prior months when he started the tariff wars on several countries. He would dial back and the markets would recover. For this reason, I believed that the market crash was temporary and may recover in a few months if not weeks.

Opportunities in Market Crashes

I read before to be "greedy when others are fearful". Such contrarian strategies while broad has some truths in it. We can take advantage of temporary market crashes and not affect our liquidity too much if we are hoping for recovery in the short term. I read in some posts of astute investors and traders who bought Hive at their lows and already enjoying tremendous gains after it recovered to its current price now, not even back to its previous price of eighteen to twenty cents. As for me, it's not easy to buy Hive as I have to transfer funds to several platforms so I settled for other tokens instead that were available in our local platforms. Today, I'm already seeing the start of recoveries and hopefully more gains in the coming weeks.

Final Thoughts

Market crashes are terrifying but if you have a long term view and not planning to cut losses then it's could be a great opportunity to get in. I read in another book advising young investors who would are planning to DCA to wait for market crashes and build their nest egg from there. For long term investors, it would be better if we don't take too much risk by using margins as it can be wiped out by sudden dumps.

For short term traders, volatility can be a great opportunity to profit. By going long on market dumps, gains are possible as you expect the market to recover in the short term.