Resisting Bitcoin’s High Volatility Spikes During And After The Halving Event

Bitcoin’s halving in 2024 may be one of the most important events for the cryptocurrency, as the fifth halving brings a significant challenge to investors and miners. Significant volatility spikes might hit investors in prices due to high demand in a short time. At the same time, the reward for mining will decrease by half, leading to mining difficulties.

Indeed, the Bitcoin price USD will suffer several changes during and after halving, when investors will most likely leverage positive sentiments about the cryptocurrency. However, as this factor will compete with limited supply, we might see investors fighting over adding Bitcoin’s to their portfolios. At the same time, miners will do anything to update their rigs and continue mining.

Regardless, the Bitcoin’s halving event has a significant impact on the market, and users must be prepared to see some rough times for their investments and efforts. Here’s how to overcome them.

Miners need better rigs

Bitcoin’s halving will reduce the mining reward from 6.25 BTC to 3.125 BTC, which affects miners the most as they need to update their mining rig to leverage the same results as before. We should expect that several miners might give up on Bitcoin, as it was already challenging to mine.

Now, to withstand the new requirements, miners need an update to both the software and hardware technologies. For instance, using only ASIC and FPGA units can help ensure a stable mining and hash rate, as these chips are made for such activities. However, they’re considerably expensive, and FPGAs can be difficult to approach as they require programming.

When it comes to software, miners should be wary of the digital wallets they use, considering that security might be in danger during these times. The best digital wallets are still hardware gadgets because they don’t need an internet connection to be accessed and can be stored more efficiently.

Investors need diversification

Although investors might benefit from Bitcoin when the prices increase, that doesn’t mean they’re not in danger of losing the value of their investments when the prices drop. That’s when diversification comes to saving investors’ portfolios, where assets are diverse and of different use cases and industries, being able to balance any unforeseen event.

Besides Bitcoin, Ethereum is a popular investment due to its massive blockchain utility. However, many of its competitors can be invested right next to it, whether it’s Solana, Cardano, or Avalanche. Meme coins have been in trend in 2023, and they might continue to be profitable, but investors must follow their dynamic closely to ensure income.

Diversification can be achieved through thorough research and involvement because these tokens can also be volatile. Considering this aspect, investors must try more strategies for long-term reassurance of their portfolio’s sustainability. Dollar-cost averaging is one of the most popular and has been tested by numerous users. However, for those who love adrenaline, crypto trading might also be appealing, even if risks are more significant than returns.

Investors need to avoid FOMO

Most of the time, during these market phases, investors are prone to FOMO (fear of missing out), a psychological response observed in investors. Crypto FOMO appears when users are afraid of missing out on consistent wins due to high volatility and sell all their assets or buy as much as possible. At the same time, FOMO is amplified by social media and forums when individuals speculate about their suppositions or fears.

FOMO can be dangerous to the market because it drives prices up or down according to investors’ tendency to do something based on feelings rather than actual stats. Hence, other investors can be affected by the crowd’s actions.

Avoiding FOMO requires patience and strength because it implies being sure of your portfolio. Hence, to be a consistent investor, it’s best to understand what investing for the long term does and try to approach this strategy to safeguard your portfolio’s value.

Everyone should be wary of social media posts

Although social media can be helpful for beginners, as they can find support in crypto communities, people should be more careful regarding who they trust with crypto advice, especially during the halving. Such events make all kinds of people become experts, and besides the false claims they make, they might also lure investors into scams.

Crypto scams are pretty easy to perform, and Bitcoin is the first to be used in these illicit activities. Phishing, for example, is done by scammers who can impersonate legitimate companies or influencers and trick investors through emails or messages to texts to reveal their private keys.

On the other hand, everyday social media scams include giveaways created by verified accounts that fraudulently receive their blue checks. Those behind the giveaway stole content and created an apparent safe brand, but for people who don’t verify their accounts, they seem to be trustworthy.

What will happen after halving?

Experts stated prices will boom during and after halving for about three months, but since nothing is certain, we can only wait and see what will happen. What’s sure is that investors have already made their Bitcoin investments, and the craze combined with the BTC ETF approval increased the cryptocurrency’s price to all-time highs.

It may be possible to explore during and after halving, which may destabilize the market and confuse some investors. Indeed, all the attention on Bitcoin’s might affect other crypto projects. However, investors should still expand their horizons and find something that can create a safety net in case Bitcoin’s has a sudden drop after halving. NFTs, dApps, and altcoins are still a stable option for diversification.

Conclusion

Bitcoin’s halving is one of the most critical events in 2024, and will surely make some waves on the crypto market, as the reward will decrease and prices will boom. The halving was introduced to maintain a low supply and lengthen Bitcoin’s lifecycle but keep demand at a certain level, so Bitcoin will become more valuable each halving. During these times, both miners and investors should prepare for several changes. Miners need to update their mining rigs to sustain their activities, while investors must take a long-term approach to avoid FOMO.