Although many cryptocurrencies have experienced tremendous gains in recent years, this meteoric growth has not been without frequent periods of decline.

During these times, long-term holders may assume that these losses will be temporary or insignificant in the long term or take measures to protect their portfolios and maximize their overall profitability.

There are 3 popular ways to keep your crypto wallet safe:

• Coverage

  Coverage is a strategy used to protect an investment against risk, opening another position that will benefit if the market moves unfavorably against the initial investment. In general, both positions should be designed to balance regardless of how the market moves, effectively ensuring the price of the original investment. This strategy is mostly used by traders who believe in long-term potential of a digital asset, but fear that short-term volatility may cause unnecessary losses. Just be sure to close your short-term position once market volatility decreases and ensure that your margin remains within the requirements of the platform to avoid automatic settlement.

• Interest in your unused balance

  Although opening a short hedge is an excellent way to create a neutral risk exposure, another way to achieve this is simply to accumulate interest on your portfolio balance. Currently, there is a large number of highly reputable platforms that offer up to 10% interest in crypto-dollar deposits, which allows you to increase your underlying balance with little or no risk, such as StormGain, BlockFi, Nexo and Celsius Network, among others.

• Avoid volatility

  For those who want to completely escape volatility and protect their portfolio in the safest way possible, simply exchanging more volatile crypto assets, such as Bitcoin, Ethereum and XRP, for stablecoins such as Tether and True USD (TUSD) is a good way to achieve it. . Also, by temporarily leaving volatility during periods of decline, it is also possible to capitalize on the recovery of the market by re-entering it at a lower price than the one that came out. Once the market recovers, you will then be in a better position than you had at the beginning, since your portfolio will be larger than it was initially, at no additional cost, in general.