Options for my ADA

Hi
I am no longer engaged with the crypto community and find it doesnt help my OCD. Currently sitting on massive losses and have learnt to try and just foget about it and weather the storm so to speak. But I am curious to know if there is anything I can do (aside from staking) with my value decreasing ADA to create some form of passive income?
I am aware of yield farming but it doesnt seem all that worthwhile when you consider risk/reward and NFTs just seem pointless.
What else is there?
TIA

How do people feel recent interest rate rises will affect wider crypto market?

Hi @donyeo

It looks like overall crypto movement is dependent on Bitcoin moves. Regardless of what networks do their price is heavily influenced by Bitcoin moves. Look at these charts below:
TopCrypto
If you exclude stable coins the charts on the right are almost exact copies of each other. The market seems to see all crypto as a group instead of individual projects. So, the news or advancements and/or failures with in the projects are muted compared to price shifts in Bitcoin.

So, the question becomes how does US interest rate hike affect Bitcoin.

I been looking at Bitcoin market for a while now and it seems to me that it is not acting as inflation hedge, nor is it acting as a safe haven. It seem to have a strong inverse correlation to strength of the US dollar. Look at the chart below:
BTCUSDT_2022-05-05_13-57-48
(I did use logarithmic scale for BTC to smooth out the noise.)

If this relationship holds then any strength in US dollar should weaken price of Bitcoin. Increase in interest rates usually strengthens the USD and they expect to raise rates for next 6 months. So, I think for next 6 months to a year increase in interest rates will cause weakness in crypto.

However, there are wars, pandemics, supply issues, wage inflation, etc… So, there may be factors that become major issues and in a short term override any effect of interest rate hikes.

So if you are looking at crypto as an investor you may need to adjust your strategy depending on what type of investor you are. Here are some strategies used by different investment types:

Short term investor or day trader- you are probably looking at very good short/put opportunities with stable news cycle. Although, you need very aggressive stop-loss points.

Medium term investor (5 years or less)- this is a good opportunity to lock in some losses by selling then buying right back for same price so you can lock in capital loss to offset your capital gains tax (if needed).

Long term (HODLer) - you are probably doing “Flight to Quality”. This is a old stock market strategy where you liquidate all but the best 2 to 3 holdings and keep money on the side in other to enter at every new market lows at your best picks. This is to try to average down your initial entry point and reduce risk of being in projects that will go to zero.

As for myself, I think of Cardano as a highest quality project out there. I buy some ADA every month regardless of the price. I try to learn and get involved with new developments and interesting projects. Cardano is a network that can benefit individuals far beyond benefits of just investing.

Hope this helps you with your research :smiley:

3 Likes

Why is everything shitting the bed again today?

Mostly investors are shitting their beds rather than the crypto, Cardano has a lot of big updates coming and there is a lot of volume being traded and bought in at these levels. Whales have been accumulating Cardano for awhile so hold for the long term. I think the update in June will help provide some clarity to the price but personally I have bought in from 68 cents - 78 cents and so I am pretty fairly in the red. However, look at Cardano’s technology, the community, updates, and its real world applications. Cardano pumped to 1$ back in 2017 before crashing all the way down to 4 cents. It would have been a blessing last year to buy in at 50 cents, and so that is where my sentiment is at. Most Cardano holders have been in the red for the past year as well so you have to be comfortable facing losses before you accept profits.