Author: David Hoffman

Original source: Bankless

Author: David Hoffman

Original source: Bankless

Compilation of the original text: Dong Xun, Babbitt

Many of my friends are entering the crypto space in 2021 and they all just want the price to go up... Of course, who doesn't want their portfolio to grow in value?

So, they're always shocked when I tell them, "Want a bear market."

If you want to get really rich, then you need to hope for a bear market. This is completely counterintuitive, but true.

If you want to make quick money, then of course, you can gamble on those memecoins. But if you're looking to create generational wealth, you don't expect to cash out in 2022 or 2023. You will accumulate wealth into the future.

Let me repeat, generational wealth is created in bear markets.

Nor is it just a matter of financial capital. Wealth comes in more forms than capital. If you do well in a bear market, you gain not only a stronger portfolio, but much more, like long-term friendships, meaning, and purpose.So let's unpack it all.In my opinion, there is no official definition of a bear market. Of course, those looking for a clear definition may end up with

“…prices down 20% or more from recent highs…”

as the benchmark. But to me, a bear market is a reflection of investor sentiment. In other words, rather than trying to classify the recent price action as a bear market, ask yourself, does this feel like a bear market? If yes, then act accordingly. If not, take corresponding measures as well.

Here are 5 reasons why a bear market is exciting:

01 Long-term wealth

One reason I hate bull markets is that buying crypto assets always feels fruitless compared to the 2018-20 bear market I'm used to.$1000 in 2018 is 5-10 ETH or 0.2-0.3 BTC. $1000 in 2021 is 0.2 ETH or 0.015 BTC.Changing the size of a portfolio is difficult. In a bear market, it is much easier to increase investment chips. Ability to convert your 9-5 salary into dollars

average

It's satisfying enough to invest in what you believe is a larger asset allocation.

This is the true source of long-term wealth: belief.

A bear market is when settlers leave their homes in search of better pastures. In a bull market, in a bull market, you buy the same things as tourists and fans. In a bear market, those bidders are gone and you can get a better buy price option.

Most people who have spent enough time in the crypto space understand that it is going to take over the world. Time is on our side, and the longer we endure the bear market, the longer we have favorable prices to absorb before the world decides to pay attention to cryptocurrencies again.

A bull market is when the entire world remembers that cryptocurrency exists and reprices the industry based on the progress it has made in the previous bear market. A bear market is when the rest of the world gets tired of cryptocurrencies and the market still moves on. If you stay here and everyone else leaves, that's your chance.

That's when you can buy at prices you'll never see again. During the ICO boom of 2017, those who created huge fortunes did not. They bought regularly between 2018 and 2020, when the price of ETH was less than $500.

financial capital is onlycapitalofcapitalof

A sort of

form.

Social capital is one of the best assets I've unknowingly accumulated throughout the 2018-2020 bear market.

Friends, brothers, allies and partners.

A bear market is when the campfire cools down and we all have to curl up for warmth. Side by side, we find our bear mates to spend the winter with.

If you're like me and can't stop thinking or talking about cryptocurrencies, you'll find like-minded people here with similar levels of belief and similar industry-specific interests.

I made lifelong friends during the 2018-20 bear market. I've attended weddings and traveled the world, spending time in real life with people I meet on Discord or Twitter.

How to take advantage of this:

Learn how to use Twitter (it's a skill) and keep spending time on the Discord channel. Get a second monitor to keep Discord always up (alpha: make it vertical). When you find someone you identify with regularly, send that stranger an email and say hello.\_(ツ)_/¯

That's how Ryan and I met, and that's how Bankless started.

We still haven't met. ¯

03 Signal > Noise (Alpha)

People think of bear markets as "hard times." In terms of financial capital, of course yes. But in everything else, a bear market is an easy pattern for cryptocurrencies.

I mean, in a bear market, the ratio of signal to noise is much higher.

In a bull market, everything is clamoring for your attention, which fuels your FOMO. In a bull market, many projects do so by attracting attention rather than fundamentals. In a bear market, these projects no longer work, and attention-based projects are the first to be eliminated.

Bear markets are quiet markets, and when the noise leaves the industry, it creates room for real signals to dominate the industry.

Bull Market = Noise Dominates

Bear market = signal dominates

It's part of the market cycle that simply oozes alpha and the best part about it is that it doesn't confuse you. It's just easier to identify true alpha, and feel more confident in that judgment.

For example, DeFi was created in 2018/19, but it will not have a fair price until DeFi Summer 2020. Everyone knows that DeFi's alpha will eventually arrive, with plenty of time to accumulate in the meantime.

04 Construction

Easier to build during a bear market.

The silence of a bear market allows for concentration and long-term thinking. Entrepreneurs in a bear market don't have to follow weekly trends, they are able to lay the groundwork for the next few years or even decades. No animal coins and new NFT PFP means builders can refocus on fundamentals and the real stuff.

This is of course cyclical. Once these bear market builders produce their high-value product, it will start a new wave of bull market enthusiasm and end the silence, because the world gets excited about all the cool new things that the bear market produces.

It is much easier for founders to find quality talent in a bear market. You don't have to worry about whether they are here for the long term or for the trend. Talent tends to be hungrier and tougher than during a bull market.

Products born in bear markets are, by definition, resistant to bear markets. If it can build in a bear market, it will thrive in a bull market.

05 Encryption will get stronger

Cryptocurrencies are "anti-fragile". "What doesn't kill us, only makes us stronger", at this point in the life cycle of cryptocurrency, there is no way to kill it. We have won, we just have to wait for the rest of the world to realize it.

No, cryptocurrencies are not dead. The only thing that died was the belief of a group of tourists. The 2020-21 era brought in millions of new cryptocurrency users, and the 22-year bear market will demand a very strong portion of them as long-term settlers.

Because the past two years have seen more believers in cryptocurrencies than ever before. We have more developers than ever before, we have our own native media outlets, and we have our own culture and slang (gm, wagmi, frens).

We own our vibe, and our shared vibe will ensure that Bear's Bonfire keeps everyone warm this winter who chooses to stay with them.

So, what do you want to do during a bear market? what kind of friends will you make What will you help build? What skills will you develop? why do you stay

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