The bear market is often seen as a negative period, where investors mainly see their investment evaporate. Most people buy when the euphoria is highest, which in retrospect is often the least good buying opportunity. That is why the bear market is interesting. The euphoria is gone, but the opportunities are still there.
During this period, investors have the opportunity to invest relatively cheaply and to put their time and energy into interesting developments, which most people are not currently involved in.
The bear market #
In the traditional markets, a bear market is spoken of if there is a decline of 20%. Experienced crypto investors laugh at these percentages, due to the fact that these price impacts occur on a daily basis in the crypto market.
In any case, you can speak of a bear market when the price is in a declining trend for a longer period of time and confidence in the market is very low. This pessimism is due to the falling prices and the length of the bear market. In general, most investors are pessimistic about the future of crypto and bearish in this case.
7 ways to make the most out of the bear market #
During the bear market it is very easy to turn your attention to something else. However, the crypto market, where prices fall and the mood of many investors falls just as hard, is where most people like to spend their time.
To make sure you keep going during this period, we wrote down 7 ways that can help you keep your focus during this period (and make some nice profits).
1. Make a plan #
The most important thing is to make sure you always work with a plan. This makes your activities measurable and you can see how the progress is, and also where you might go wrong. In addition, it also prevents FOMO, because your plan serves as a guideline.
In your plan it is important to explain in detail how you are going to invest and what you are going to do with the return. It is also important that you think about the term. A plan is useful for both the short and long term, but a goal is also important. Ultimately, every investor has a motive, which ensures that they have started investing.
2. Staking your coins #
It is possible that during a previous bull run you missed the boat and were not able to sell your coins for a profit in time. When the price then makes a significant drop, your investment is under water. In the very short term, there is little chance that you will make a profit on these coins, but you can use them to expand your portfolio. By staking your coins you ensure that you receive more crypto as a reward. Especially for the less risky crypto assets, such as Bitcoin and most stablecoins, this can be a relatively safe way to expand your portfolio.
Another situation in which crypto staking is useful is if you decide to invest for the long term. When you have bought your coins and you have decided to hold them for a longer period of time, then staking your coins is an interesting option. This allows you to increase your portfolio in a way that is comparable to saving in a savings account. You secure your investment and receive a compensation for this. However, the percentages in crypto are usually a lot higher. Where the bank gives 0.1% interest in savings, you can easily stake crypto with 10% as a reward.
3. Make money with NFTs in different ways #
You can also earn money with NFTs in different ways. You can do this by buying and then owning NFTs, which yield your coins when you own them. An example of this is the CyberKongz collection, where NFT holders receive 10 BANANA daily. This makes it possible to build up passive income through NFTs. In addition, NFT staking is an option to make money online with non-fungible tokens.
Staking your NFTs is a relatively new way of putting your unique token to work. NFT staking means that you associate your non-fungible tokens with a platform or protocol. In exchange for this action, you will receive staking rewards. This way you can earn extra while still owning the NFT.
You can compare this way of staking to yield farming, where cryptocurrencies are lent or used with liquidity providers, in order to earn rewards through interest or transaction costs. This way of earning interest is similar to that of a bank, but in this case, there is no intermediary involved. NFT staking belongs to the decentralized financial world while a bank is centralized.
4. Investing in Play-to-Earn Gaming #
This tip may be the most fun way to prepare for better crypto times. Play-to-Earn (P2E) gaming allows you to relax while earning crypto and NFTs. This way you immediately ensure that a bear market does not have to be boring. Interest in cryptocurrencies declines during a bear market and so do these games. That is why it is useful to build up a gaming portfolio during this period.
By investing in the right game, which after thorough research you expect to flourish during a bull market, you can start playing P2E games. In any case, consider how the team communicates, whether the deadlines are met, what options the game has to offer and on which blockchain the game is built.
The blockchain can be important in connection with the adoption. However, there are also very well-known games that are not built on Ethereum. DeFi Kingdoms is an example of this, which is built on the Harmony blockchain, yet is incredibly popular with many gamers. However, due to the latest hack on the Harmony blockchain, we don’t advise you to invest in the game, nor its blockchain.
P2E games can often be played for free, but the most lucrative way is often to buy NFTs and wager them. For some games this is mandatory, which is called NFT-to-earn. No matter what your strategy is with crypto games, you can find interesting games on every blockchain. From Crabada on Avalanche to Aavegotchi on Polygon.
5. Dollar Cost Average (DCA) #
A common way to invest in blockchain technology is the Dollar Cost Average (DCA) method. Dollar Cost Averaging is seen as a useful strategy by many investors, including many crypto investors. In addition to crypto, this way of investing is also very useful for other markets, such as the equity, bond and commodities market.
The characteristic of DCA is that an investor will invest for a certain amount at a fixed time. You have also determined in advance for which investment or even which coin you do this. By making a plan before investing, you ensure that your emotions do not influence the investment. This can be very difficult in the volatile crypto market, so you can avoid unnecessary mistakes via the DCA method.
This way of investing is also very useful during a bear market. When your interest in investing in crypto decreases, you can turn on automatic investing and continue to invest silently, and be pleasantly surprised when your interest also rises during a bull run. The example below is a good example of this.
6. Research on various crypto projects #
It is often the case that a bull market is relatively short compared to the bear markets. Because bear markets often last a long time, you can use the time well during a bear market to do good research into various crypto projects. You can use this time to research which Crypto Pearls are going to make it big in the next bull run!
It is precisely during this period that researching projects is so important, because you can invest cheaply during this time. For example, investors who researched the different forms of crypto adoption in 2018 to 2020 could have linked this information to different niches. From CryptoPunks, play-to-earn gaming and crypto projects competing with Ethereum; investors who put the previous bear market to good use have been able to reap the rewards in subsequent years.
Not only are existing projects interesting, but new crypto projects can also be very interesting. However, the plans often consist of a nice website and a white paper, crypto start-ups are often a very risky investment, but a high risk can also mean a high reward.
7. Pay close attention to BTC pairing #
When Bitcoin starts another bull run, it is important to get into position with the right altcoins. In addition to the extensive research and a good spread between risky coins and fewer coins with less risk, you can also keep an eye on the BTC pairing of an altcoin.
When all altcoins (in dollar value) have fallen sharply, but some coins in BTC value have fallen a lot less, this may provide opportunities. When Bitcoin rises, these coins can also rise very fast. The dollar value in these cases gives a distorted picture. However, the vast majority of investors only look at the dollar value, but not at the BTC pairing.
But what is the BTC pairing? You have probably looked up the Bitcoin chart, where Bitcoin is compared to the US dollar or the euro. In this case you speak of BTCUSD or BTCEUR as a pair. When you look for altcoins that are in better shape than the dollar value suggests, in the case of Polkadot, for example, you search for DOTBTC, instead of DOTUSD.
The bear market is the most boring period of the market. There is no euphoria, less and less people talk about the market and the fun has been replaced by nagging and negativity. Especially in this time it is important to keep your mind on it, because these are the moments when you can invest favorably. However, investing should always be with a plan and good research.
The above tips are intended to show that you can make a profit or expand your portfolio in a bear market in various ways, so that you are optimally prepared when the price goes up again. You can use several tips, but especially for novice crypto enthusiasts it is wise not to worry about too many different things. Overview is important, which is very hard to find in the wild west of the blockchain industry.