Some people out there love spreading fear, uncertainty, and doubt (A.K.A “FUD”) no matter what the situation is. In the cryptocurrency market, you’ll hear these people throw around words like “market crash” or “crypto winter.” What they’re really trying to say is that we’re in a bearish market. We’ve been here before and we’ll surely be here again. That’s the way the market works. But it doesn’t have to be a bad thing. There are many ways to profit during a crypto bear market. Here are four investment tips to get you started.
BEAR MARKET INVESTMENT TIPS: BUY LOW
The majority of investors see green and think that means profit. While that’s not wrong per se, there are plenty of opportunities to be had “in the red.” It’s human nature to want to avoid risk. For that reason, you’ll see many investors panic selling during a bear market. However, this offers a unique opportunity for the risk taker. During these times, crypto is cheap which means you can buy larger amount of it, then sell it when the price rises for a profit.
BEAR MARKET INVESTMENT TIPS: SHORTING
Shorting, or short selling is when a trader predicts that market is taking a dive. If this prediction is correct, then they profit from it. Crypto investors can short sell with crypto margin exchanges. By using this method, trades sell assets they do not even own yet. Instead, a borrowed asset is sold at the current price. If the market goes down, and the asset price along with it, then their position goes up and traders can buy the asset at a cheaper price to make a profit.
Investors can also use shorting for hedging their portfolio. For example, if you have a large amount of Bitcoin, then you can open up a new short position that lowers its volatility.
BEAR MARKET INVESTMENT TIPS: HODLING
What started out as a crypto meme is now a legitmate strategy used by many investors. To “HODL” essentiallys means investors will not sell their crypto assets even if the market goes deep into the red. This is a long term strategy, not meant for the impatient. People who use this strategy have the philopsphy that the crypto market is still very young and new. As a result, volatility is expected and will continue to coccur unti lthe market stabilizes. Then and only then, will the market continue to take on it’s true form and HODLers will be rewearded for it.
HODLing can even be used in traditinoal markets as well. Take Apple co-founder Ronald Wayne for example. In 1970, Wayne famously sold his shares of the company for $800. If he had waited just a few decades, that $800 would be worth over $100 billion.
BEAR MARKET INVESTMENT TIPS: DIVERSIFY
Last but not least, smart crypto investors must always realize to diversify their portfolio. Predicting the future of crypto is just not possible. So if you put all your money into Bitcoin, you’re making a huge mistake. But if you invest in a variety of different coins, you immediately increase the chance of profiting.
One simple way to do this is to utilize the crypto backed lending platform. Here, you can use your large stash of Bitcoin, Ethereum or whatever as collateral. In exchange, you get cash to buy more crypto to diversify your portfolio. After paying back your loan, you get your crypto collateral back and then your portfolio is looking stronger than ever. YouHodler is a particularly good lending platform due to it’s industry best loan-value ratio (80%), near instant pay and payouts, and a wide variety of crypto to choose from as your collateral. So if you want ot prepare your portfolio before the next bull run hits, start diversfiying now.