Thriving in the Bear Market
Hello Fren,
In the last newsletter, the crash of TerraUSD ($UST) and $LUNA was discussed. This week Do Kwon and the Terra Foundation Guard proposed a solution, which is to “fork” the current Terra chain into a new chain without the $UST and to reward the LUNAtics.
If you have been monitoring the crypto market recently, you must have noticed a continuous downtrend for a couple of months; The global crypto market capitalization was down by almost 60% from its ATH of $3 trillion. Bitcoin is also down from its ATH of $69,000 and it stands at $29,486 today.
Opposing most Investors’ expectations, the crypto market does not always follow an uptrend as there are weeks, months and even years where general downtrends occur. Although, the bear market might be frustrating for investors, it can also create great investment opportunities to buy at lower prices.
According to the Binance Academy, “a Bear Market refers to a negative trend in the prices of a market. Generally speaking, a bear market refers to a strong market downtrend that presents significant falling prices over a relatively short period of time.”
The focal point is how you can benefit from the bear market and we have developed the best strategies for you.
Zoom out and think long-term. Bear markets don’t last forever and should be your happiest moments as you get to buy at lower prices. The bitcoin price fell from $29 in June 2011 to $2.10 in November 2011. Another spectacular bearish move happened to Bitcoin’s price when it fell from $1,135 in December 2013 to $175 in January 2015. Another significant “crash” of Bitcoin’s price was a fall from $19,640 in December 2017 to $3,185 in December 2018. Zooming out will help you understand how the market works and that although the bear market is on, the bull market will definitely take over in the long-term.
It is necessary to know your bags and don’t panic sell. I always advise people to research on tokens before investing, as this gives a level of confidence as the use case aligns with your motive. Buying high and selling low is the greatest mistake crypto Investors make. Hence, it is advisable to invest in tokens with good use-cases with long-term purpose.
Dollar Cost Averaging (DCA). DCA is a technique of investing in tranches instead of investing a lump sum. Let’s say you want to invest $10,000, DCA advises that you invest in bits for a longer period of time. So, if the price of the coin you are interested in has fallen by 30%, and you feel the need to buy the dip, it is advisable not to buy all at once but to DCA through a long period as the market direction is unpredictable.
Airdrops!!! This is basically free money for performing tasks and most times the tasks are basic and you also get rewarded. Numerous crypto projects are being developed, even in the bear market, and most of these projects require testers and early users who are then rewarded. That means you can make free money even when the market is on a downtrend. I use https://airdrops.io/ to research and apply for airdrops and advise you do same.
Leverage on DeFi tools and techniques like staking and yield farming. I promise to write on how to make money using DeFi platforms soon.
Expand your knowledge on the Blockchain technology. The blockchain space is fast-evolving and it is best to stay abreast of emerging trends. Attending blockchain events could be one of the best ways to increase knowledge. For example, I attended the Techpoint Africa Blockchain Summit #TABS22 today and it further deepened my knowledge on a couple of topics - DeFi, NFTs and Web3.
Conclusion:
Bear markets can be frustrating, to newbies and professionals, but usually have a short life span. While you might be tempted to give up on the market and probably sell your coins to focus on other things, that is not the best option. Ensure you don’t panic sell, put on the DCA cap and keep improving your knowledge.
Opportunities:
Become a Cardano Ambassador.
Writer: Adesegun Sunmola