Bear Market Survival Guide: How to Get the Most Out of a Bear Market?
Original author:The DeFi Edge
Original compilation: Captain Hiro
Original author:
Original compilation: Captain Hiro
Real wealth is created in bear markets, but no one seems to share more practical advice than "buy the dip".
This article will be your survival guide for maximizing your gains in a bear market:
(I will provide some portfolio examples)
The most important thing in a bear market is to find a way to survive. If you die in this bear market, you will not be able to reap substantial returns in the next bull market cycle.
Defense in a bear market is offense (Defense wins championships). I believe that cryptocurrencies will break out of their all-time highs (ATHs) again, but not all projects will eventually succeed, which is why it is important to position yourself correctly.
Bear Market Portfolio Template
Here are a few portfolio templates for your reference in a bear market:
Figure out your portfolio first: stablecoins, low-risk, medium-risk, and high-risk cryptocurrencies
Then decide what currency to take
I have created several portfolio templates for your reference. (This is to tell you how to configure, not financial advice)
I recommend public blockchain projects - they have the best risk-to-reward ratio right now:
Highly recommended: eth / avax / terra / ftm / cosmos
Recommended: cro / scrt / near / metis
Not recommended: ada / sol / bnb / dot
Don't get mad if I don't like the cryptocurrency you're holding, invest in whatever cryptocurrency you want.
Stay away from high-risk cryptocurrencies for now
I like to buy all kinds of junk coins without thinking in a bull market, but now is not the time. The veterans who accompanied me from 2017 may know why: when the market recovers, these small-cap coins may be over.
Blue chip cryptocurrencies will have more funding and adoption. It is safe to hold blue-chip cryptocurrencies now, and wait until the next round of bull market comes before considering brainless junk coins.
Why hold stablecoins?
You should now hold a large amount of stablecoins (25-50% of your position). I understand that holding stablecoins doesn't yield much, but the point of holding a certain percentage of stablecoins in your position is to reduce the volatility of your portfolio and help you preserve your principal.
I think stablecoins are like bonds in TradFi, 20% of stablecoins in hand is much better than losing 70% from now on.
Where is it more appropriate to use stablecoins for mining?
@platypusdefi （@echidna_finance/ @vector_fi）
@hundredfinance
@edgeprotocol
@beefyfinance
My favorite is @anchor_protocol (Terra), which has 19.5% APR. , because it is simple enough;
More advanced miners can try:
You can use @0xcoindix to compare the rates of different DeFi protocols.
Of course, stablecoins are not completely risk-free:
Algorithmic stablecoins could be on the verge of decoupling
USDC/DAI/USDT are centralized, governments may freeze them
Therefore, for the sake of avoiding risks, the stable coins held in the hands should be diversified.
Of course, you can also hold fiat currency. However, due to inflation, holding fiat currency is actually a risk. You'd better choose the position configuration that suits you according to your own situation.
When do you start buying bottoms?
I've made the same mistake many times, buying immediately when the price of a coin is falling. Don't try to catch every dip in the market. For example, I bought ETH at a price of US$3,800 in May 2021, but the currency price fell to US$1,800 a few months later.
So when should you buy the bottom?
Try dollar-cost averaging (fixed investment): Instead of buying $1,000 of ETH today, buy $167 worth of ETH on the 1st of every month for the next 6 months.
Don't underestimate this method, and you won't beat yourself up for missing the best buying opportunities in stud hunting.
Maybe you will say: "Brother, I don't have the money to buy the bottom".
There are always veterans who ask me what to do if I have very little cash in hand. I would say stop wasting time on crypto twitter and discord, the best thing you can do right now is to increase your off-market earning power or create a second income stream, and then invest those funds in blue chip cryptocurrencies .
Is your goal to reach $1 million in total cryptocurrency assets?
Starting with $100,000? You have to have a 10x return.
Starting at $10,000? You have to reach 100 times.
Find ways to increase your capital, 10 times the return is much easier than 100 returns.
The following has nothing to do with DeFi, but let’s talk about how to increase your earning power:
1. Talk to your boss about getting a better pay or changing jobs
Negotiation is a skill and no one cares how hard you work - you are paid based on how hard you are to replace. Don't be afraid to ask the boss, children who open their mouths have food. In addition, job hopping is the best way to increase wages.
2. What are you good at?
Build a fanbase, figure out their problems, and sell them the solution.
A friend of mine is interested in men's fashion, sells ebooks and courses on men's fashion, and invests everything in cryptocurrency. (He doesn't have a degree in fashion. No experience in fashion, just a pure hobby)
3. Crypto companies are always looking for good writers/researchers
I started the account in January and after 4 weeks I started getting 6 figure plus job offers. I'm not showing off how awesome I am, I'm just telling you that jobs are out there.
"Too good for them to ignore you."
4. No skills?
You can learn anything you want for free on the internet.
The skills that will be worth money in 2022 are as follows:
Digital Sales/Marketing/Copywriting
data analysis
video editing
data analysis
technical writing
Then use those skills to do some freelancing, find a job, or get into an agency.
I worked with a programmer from a village in Bangladesh who was earning over $100,000 a year and taught himself programming for free online.
"But, but", everyone may encounter some accidents, but the world doesn't care. You learn to take risks, learn to be purposeful, and remember that you are more capable than you think.
Upgrade your DeFi skills
The token economics of DeFi are getting wilder. There is no doubt that the next generation of DeFi will be more complex, and now is a good time to make sure you have a good understanding of the fundamentals.
Basic Skills Check:
find a group of peers
Take care of your tax obligations
Improve your cryptocurrency security
Streamline all your different wallets
Improve the way you keep track of everything
Check the cryptocurrency big V and various groups you follow (don’t pay attention to people who are not good anymore, it’s time to quit the group)
DeFi skills check:
How does Frax work?
What is the role of the universe?
What is impermanent loss?
How does Curve War work?
How does UST maintain its peg?
What are Optimistic and ZK Roll-up on ETH?
How will subnets improve the scalability of AVAX?
Advanced
Here are some more advanced strategies that can help you make money even in a bear market:
1. Go short
You make money when the coin is down. Sell at a high price and buy back at a later low.
I don't recommend this as it's really high risk.
2. Plate rotation
In a bear market, not all protocol tokens drop in price. In TradFi, there are some defensive sectors consumer goods that have done well in a market downturn.
This is the same in cryptocurrency, GameFi and NFT prices may fall, but the price of the second layer protocol of ETH may rise.
Bear market is a PVP mode
A bull market means everyone is making money because there is a lot of money flowing into the cryptosphere. In a bear market, there is no longer a steady stream of funds flowing in, and this becomes a competition between players, which is a zero-sum game.
Old iron, don't become the exit liquidity of crypto big V, ensure the safety of funds, and be patient at the same time.
You may be asking, "Man, how do I predict a future bear market?" Everyone has their own method: charts, money inflows, watching interest rates, etc.But bear markets are hard to predict.
for me?
You start to develop a keen sense after a few cycles:
Everything is going up - you start thinking you are a genius trader
All normal people on Facebook start talking about cryptocurrencies
Warren Buffett and Charlie Munger Start Talking About Cryptocurrencies
Everyone in the WeChat group is super bullish
Instead of trying to predict something that doesn't work, practice good behavior during a bull cycle:
No matter how bullish you are on the market outlook, you should learn to profit
Never Sell Your Blue Chip Cryptocurrency for High-Risk Crapcoins
Always keep a portion of the stablecoin position
what happens in a bear market
Poor projects and teams are eliminated
You Can Accumulate Good Cryptocurrencies Cheaper
You don't need to check your portfolio countless times a day, which means you have more time to build your skill set
The decline in the cryptocurrency bear market is largely caused by the forces of the external environment.
Now that countries are focusing on economic sanctions against Russia, they are also eyeing cryptocurrencies.
I've been throwing my head and blood in the crypto space since 2013, but I'm not a whale (yet). Do you know why? Because every time I'm in a bear market I disappear and then I come back once things start to improve. Don't make the same mistakes I did.
Summarize
This time, "I will never leave the currency circle!"
Summarize
In a bear market, you will:
Improve your earning power
Continue to buy blue-chip cryptocurrencies with regular investment
improve your skills
be patient
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