📕 Better than yesterday with BSCStation #13: Safe Invest During Bear Market Part 1
Anyone can seem like an investing wizard when markets are going up and up with no end in sight. Where it gets tricky is when they take a dive, especially if values stay depressed over a prolonged period. This unfortunate scenario is known as a bear market, and it’s the bane of investors’ existence in both traditional and digital assets.
Undoubtedly, 2022 has been a challenging year for global markets due to several worldwide downturns, including war, rising inflation, monetary tightening, and many more, which have put significant pressure on various asset classes, including cryptocurrencies. How long a crypto bear market will last is anybody’s guess, but learning what to do in a bear market can help your portfolio ride out the storm. Together we’ll take a look at some strategies for how to survive a crypto bear market.
What is a bear market in crypto?
Unlike a crypto winter, which is less clearly defined, a bear market must meet precise numeric thresholds to be officially declared. A bear market is said to occur when asset prices drop by 20% or more from recent highs and remain lower for a protracted length of time. This means even during a typical market slump when asset prices have fallen by high-teens percentages, we’re not technically in bear market territory unless it reaches that 20% mark and stays there. Bear markets are no fun for any investor, but they’re a normal part of a healthy market cycle. To be generally pessimistic about the direction of markets is known as a “bearish” outlook.
Is crypto in a bear market right now?
If you’ve checked your crypto portfolio virtually anytime in 2022, you probably already know the answer to this. Yes, we are very much in the grips of a particularly grumpy crypto bear market.
Signs of a crypto bear market
When you look at the symptoms, it becomes readily apparent the bears are in control of the crypto market.
Asset prices were down significantly for a prolonged period (way more than 20% in most cases)
Investor confidence has bottomed out
Many new investors have fled the market
Bad news and FUD (fear, uncertainty and doubt) piling up, sending asset prices lower
Other recent crypto bear markets
The crypto market has been through bear markets before, and almost certainly will again once the bulls regain control. There have been several other crypto bear markets since cryptocurrency has risen to popularity.
Q4 2017 - Q4 2018 (1 year)
Bitcoin’s stratospheric rise towards the end of 2017 was quickly followed by a yearlong crypto bear market, following the hack of Coincheck and an interest rate hike by the Federal Reserve. Bitcoin peaked at $19,279 at the market’s height, and slid as low as $3,242 over the next 12 months before things picked up again. PayPal enabling crypto use and the NFT boom are said to be the precipitating factors that brought about the end of the 2017-18 bear market.
Q4 2013 - Q4 2015 (2 years)
A series of scandals and bans between 2013-2015 helped knock Bitcoin’s price down from a once-unthinkable $1,136 to just $103 over the two-year bear market. The decline started when the FBI shut down the notorious digital black market platform Silk Road in 2013. That same year, China stepped up its crypto crackdown, announcing a total ban in the country. A year later, the infamous Mt Gox hack shook the crypto world, rattling investor confidence. Some factors believed to be responsible for the turnaround include the launch of Ethereum, Japan allowing crypto trading and the initial coin offering (ICO) boom.
Crypto strategies to consider while in a bear market
Unless you’ve got a crystal ball, incredible luck or an understanding of market dynamics that puts Warren Buffett to shame, you’re probably not going to beat a full-fledged bear market. But there are some strategies you can employ to help ensure your portfolio lives to fight another day.
DCA (Dollar-cost averaging)
Farming/ Staking
Diversify assets and Stay focused on long-term goals
A recommended safe investment strategy during the Bear Market is staking BSCS token with fascinating APY to get guaranteed allocation for IDO projects on BSCStation Launchpad.
In the next part, BSCStation will dive in and guide you to have safe investments during the bear market. Stay tuned for the valuable education program of BSCStation to stay strong through the tough time and rise high when the time is ripe.
About BSCStation
BSCStation - The fully decentralized protocol for launching new ideas. An all-in-one Incubation Hub with a full-stack Defi platform across all main blockchain networks. We provide exclusive services including IDO/INO Launchpad, Yield farming, NFT Auction, Marketplace, and BSCSwap
BSCStation operates on top of all the main blockchain networks and is designed to offer maximum value to consumers and institutions.
BSCStation platform uses the Sharing Economy Model for the purpose of profit-sharing, helping users to access DeFi platforms in the easiest, safest, and most cost-effective way. BSCStation is the most convenient bridge to connect users and application products on all main blockchain networks.
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The information provided in this article is intended for general guidance and information purposes only. Contents of this article are under no circumstances intended to be considered as investment, business, legal or tax advice. We do not accept any responsibility for individual decisions made based on this article and we strongly encourage you to do your own research before taking any action.