During bear markets, which cryptocurrencies are worth keeping an eye on? What are the best crypts to buy at that period? What is a good method for figuring out whether a project would survive a bear market, flourish in one, and eventually succeed? Welcome to another post in which we will examine the current state of the cryptocurrency markets, and the factors that influence investment decisions, then compare it to the future sustainable state the crypto markets will evolve and mature into.
We’ll also discuss the investment strategies we may use to prepare for this paradigm shift during bear markets.
Bear Market Investing Strategies (best cryptos)
There is one thing we all need to remember and understand: in today’s world, everything is a business, and finance is everything, whether you invest in cryptocurrencies, Stock market investment, or are just a regular person trying to make it in this complex world. Regardless of what they are or what they perform, entities are set up, structured, and operated like businesses.
Businesses include national and municipal governments, educational and religious institutions, sports leagues, non-profit organisations, and social organisations. Everything is a business. All entities require finances through selling goods, selling services, generating revenue, receiving grants, receiving offerings, accepting donations, tithing, fundraising, government subsidies, and taxes.
To function and operate successfully, all entities require finances. What does that have to do with cryptocurrency then? Well, here’s the sad reality of crypto investing right now: people aren’t evaluating crypto projects as potential businesses. Many of us are engrossed in the story of a project, the narrative it follows, and, most importantly, how it can be traded.
This is fine because we are still so early in the development and adoption phases that no real recognizable businesses have formed in our offering goods and services, generating revenue, growing and retaining a user base, or doing anything that indicates from a traditional standpoint that is sustainable.
Sure, there are businesses in the cryptocurrency industry like Coinbase, Ledger, OpenSea, and Blockfi that offer products and services, make money, and exhibit outstanding sustainability indicators, but these are not cryptocurrencies. We simply cannot invest in or treat them in the same manner. Unlike how we can on these new digital assets such as cryptocurrencies and NFTs.
So, since its inception, cryptocurrency investing has been primarily based on speculation, and the primary way people have made money in the space is by purchasing something and selling it to someone else for a higher price than they paid for it.
The reality is that this is not sustainable and will not be how these digital assets and ecosystems operate in the future. Although cryptocurrency is the future, that future won’t involve buying something only to resell it to someone else at a higher price.
Sure, people buy stocks like Apple and Tesla in order to resell them later at a higher price, but at the end of the day, Tesla and Apple create and sell products and services. They own assets. They own intellectual property rights. They generate revenue. Throughout the year, we can access their quarterly financial reports.
Projects involving cryptocurrencies will therefore develop into entities, possibly DAOs. In either case, entities are businesses that require funding to generate revenue and sustain operations. Back in the dot com era, we didn’t realize the incredible investment opportunities until actual ways to generate revenue with the new technology emerged.
This then led to the formation of businesses. When many of these companies started to be merged with and acquired by other companies, the market went into a full-on supernova. This is our modern dot com era opportunity. I believe that one of the most significant bull runs in the crypto space is yet to come because the technology is still in its early stages and has yet to evolve into more structured and organized entities.
Entities that can demonstrate through data that they are generating revenue, growing and retaining a user base, and are ultimately sustainable and valuable operations. At the end of the day, massive gains in the cryptocurrency market are likely within the next five years. We could experience a mild bull run between now and then, or an epic bull run that sends us to new all-time highs.
Between now and then, we could also experience a bear market. A bear market that is mild or brutal—ugly, and causes large market caps to fall by over 50%, mid-caps have fallen by over 90%, and small caps could fall to zero. Bear markets will occur in the coming years, so let’s talk about the opportunities they present and why we are at an advantage as investors in the space right now, as well as how we can profit from best cryptos.
Here’s the deal: people who buy at the lowest of lows, or even medium lows, in a bear market, and who dollar-cost average throughout the bear market, will experience life-changing gains. When bear markets are at their worst, you can make 10x, 50x, and 100x returns in a relatively short period of time.
Let’s look at the COVID pandemic valley bottom in March 2020 to see what a one thousand dollars one-time investment in each of these projects would have produced at the cycle’s peak in November 2021, a year and a half later, and how much they would be worth now.
In March of 2020, the Bitcoin low hit around $3,800. So if you had invested $1000 in Bitcoin at that price, right now it would be worth $5200 which is more than a 5x gain. At the market peak in November 2021, the $1,000 investment would have been worth $18,100, which is an 18x gain.
In March 2020, a $1,000 investment in Ethereum’s 86-dollar low would have been worth $31,400 today—a 31x gain. At the November 2021 peak, it would have been worth 56, 600 dollars, a 56x gain. Sweet isn’t it?
In March 2020, a $1,000 investment in BNBs, six dollars forty-cent low would have been worth $57,500 today, a 57x gain. At the November 2021 peak, it would have been worth 101, 500 dollars over a 100x gain.
Truly spectacular! So you can understand how things could turn terrible. When the rest of the market is afraid and selling everything, they can provide us with some truly fantastic opportunities to invest in worthwhile projects. Alright! Let’s now examine four strategies that we may all employ to take advantage of some potential high-yielding moves in a crypto bear market.
Instead of trying to time the market perfectly to plant a one thousand dollar investment at the very bottom of the bear market, I recommend Dollar cost averaging into projects by deciding on a specific amount to invest at a specific frequency and sticking to it.
For example, if you can afford to invest a hundred dollars in Bitcoin every Monday for the long term, commit to it and stick with it.
A well-diversified investment portfolio is excellent. However, in cryptocurrency, it is easy to over-diversify and miss out on significant gains. So, once you’ve determined how much money you can afford to invest in cryptocurrency for the long run, which means over a year and, more likely, several years, you’ll need to decide how many projects you’ll diversify into.
If you only have a few hundred dollars per month, it would be better to limit yourself to one or two projects. Between five hundred and thousand dollars, consider three to five projects; a few thousand dollars, consider up to ten projects; and so on.
Stay within the top 50 cryptocurrencies by market cap. If we have an extremely rough and absolutely terrible bear market, it is best to invest in the top 50 cryptocurrencies by market cap, or at least have 80 or more of your crypto portfolio invested in these projects. These present low-risk and high-reward opportunities when we transition from a bad bear cycle to a bull cycle.
As we get closer to cryptocurrency projects transitioning from pure speculation to value-creating business entities, we should research and focus on projects that are already on that path. So, in addition to Bitcoin and Ethereum (best cryptos), here are some of the top 50 by-market cap projects I’m looking into that are looking promising from a business standpoint.
As the largest decentralized exchange on Ethereum, Uniswap has an excellent use case that rivals all other centralized exchanges. If you’ve ever used it, it feels like nothing short of magic. It’s exciting to see what technology is capable of and where it will take us in the future.
Theta is a blockchain-based video streaming network that is decentralized. Its use case speaks for itself when you consider Google’s complete monopoly over the YouTube platform, where creators like myself are at their mercy and can be censored or completely removed at any time.
As we’ve all probably noticed at some point throughout COVID and even now, supply chain management and business processes are key in maintaining efficient global markets. Vechain is a decentralized blockchain platform that aims to improve and streamline these critical processes in the future.
Thorchain is a decentralized liquidity solution that enables users to move cryptocurrencies from one platform to another, such as Bitcoin to Ethereum, Polka dot to Solana, and so on. Cross-chain transactions and the ability to exchange assets between ecosystems are extremely useful and will be critical for the cryptocurrency space’s future.
If you’re more comfortable with risk and want to invest in smaller market caps during a bare winter, make sure you choose an amount you’re completely comfortable losing if the project fails. GAMING AND METAVERSE Certain NFTs, blockchain-based gaming, and the metaverse will most likely consume the world over the next several years.
Gaming in the metaverse will most likely become a top-three industry globally. Nonetheless, during a severe bear market, the majority of these projects will be obliterated to extremely low price levels, and some will be unable to survive at all due to a lack of funds to continue development.
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