7 Ways To Win And Earn Crypto Income In A Bear Market And Survive.
For experienced investors, a bear market is nothing out of the norm. It is happening currently in cryptocurrency. The proof of a good trader is in how he/she is able to navigate successfully through a bear market. This generally agreeable rule-of-thumb is applicable across all markets, not just crypto.
However, with the kind of volatility crypto usually undergoes, the risks and difficulties brought along by a crypto bear market tend to be on a much higher scale. And as we witness the possible onset of another crypto winter with most of the popular coins knee-deep in the red, it’s time we optimize our trading/investment strategies with the following tried-and-tested ways to survive crypto bear markets.
At the moment, most digital assets have depreciated by more than 70% from their November 2021 highs. This is market volatility almost at its peak.
But there are still opportunities to earn passive income during a bear market if you know where to look.
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Let’s take a look at how Wall Street traders persevere and the simple things that can be done to make money.
There are several strategies and ideas you can use to get through especially if you play your cards right.
First Understand that a crypto bear market is somehow similar to traditional markets, where a bear market occurs any time market prices fall beyond 20% from a previous high. It is similar to a crypto bear market only that it may happen for an extended period of time (three months or more) during which prices fall significantly, and market confidence decreases.
If you are wondering how long this bear market will last, just understand it is impossible to forecast, but based on previous trends, it could take a while. The last bear market in cryptocurrency lasted over two years, from 2017 to late 2020.
To Survive or make money, take the following suggestions;
Buy the crypto dip: Buy Low, Sell High
You have probably heard investors saying the words: “buy the dip” as a tactic during a bear market. Basically, it means buying crypto assets when the price is down. By doing this, when the prices go up again, you will reap the benefits.
It Pays to Diversify your crypto portfolio
The more you diversify your portfolio, the lower your risk is during a crypto bear market. This is because, although many cryptocurrencies will lose value, not all of them will. For example, in the current bear market, Bitcoin and Ethereum have tended to drop; however, some other cryptocurrencies have actually gone up at various points in time.
Of course, this does not mean that you should blindly invest in loads of altcoins without doing your ‘homework’. To pick a possible winner, you should check out factors such as past performance and previous all-time highs. To be clear – this does not mean that they will definitely make you money, but it can help you separate the wheat from the chaff.
Control Your Emotions, Don’t ‘panic sell’
Seasoned investors know that bear markets will come and go. But as a new investor in crypto, suddenly seeing your investment so down and down may spark panic. The first reaction may be to sell everything and cut your losses before the situation ‘gets worse’. However, this actually may be one of the worst things to do!
If you devise a long-term plan/strategy, and never invest more than you are willing to lose, you can ride the bear market wave and come out even stronger.
Employ yield farming as a tool
Yield farming is when you ‘lock in’ your cryptocurrencies on a platform to earn interest on them, similar to holding your money in a savings account. The amount of interest is based both on how much you leave in, as well as how popular the particular token is at the time.
Your tokens will then be lent out to other users, who are taking out loans at a variety of interest rates. You are rewarded with that interest in the form of the platform’s token, and you can also earn tokens for participating on the platform.
Staking is a great strategy to create a passive income from your crypto. Like yield farming, it also means locking in your cryptocurrencies. The difference is that, rather than lending them out for loans, they are used to validate transactions on a Blockchain network. This is also known as a Proof-of-Stake (PoS) consensus method.
The more you stake, the more priority you’re given to validate transactions, and, therefore, the more you earn.
Work in crypto
Even with the recent downturn in fortunes, there are still plenty of jobs in the crypto industry – in the marketing, finance, and management sectors for instance – many of which pay in cryptocurrency (which will become more valuable once the bear market is over). Of course, this ‘tip’ applies to those who have an understanding (and interest) in how the crypto market works
Create your own NFTs
If you are interested in NFTs and think that you have a great idea, learn how to create them and actually do. You never know – you just might be the ‘next big thing’! Not sure where to start.
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This blog is for information purposes only and does not constitute financial advice. Kindly speak to your financial advisor for more information if you are in doubt about any step you might want to take.
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