No doubt about it, the Bear market is here. Bitcoin is down more than 50% from its all-time high, most altcoins are down 90% from their all-time highs, and Terra Luna? Let’s not even go there. So what do you do now? First of all, stop being scared, and second listen to one of the most important pieces of investment advice by Warren Buffet.
In contrast to popular belief, traders make the most money during a bear market. That’s surprising, right? And this works the same way in Traditional Finance and crypto markets. But this is only one of the bear market trading tactics.
3 more time-tested strategies can not only help you stay afloat in the bear market but can lay a very strong foundation for you to come back even stronger and become a bear market millionaire. Let’s get to the point.
Setting up your Portfolio
Before we talk about the strategies you need to assess your portfolio. Setting up the right portfolio is important. This is the fundament that all traders build on. It is critical because you set up the foundation for the next bull market. Now is the time to lay a strong foundation.
Therefore, once that next bull market arrives, there will be new ATHs. However, be aware that some projects will not survive the bear market. Here you can see a picture of a few sample portfolios. We made three different samples, ranging from low to high risk.
- Low risk—40% in stablecoins like USDC/DAI. The rest in blue chips. 45% in BTC and ETH to hodl. SOL, ADA, and AVAX each 5%.
- Medium risk—it’s like the low-risk portfolio, but with 3 medium-risk tokens added. FTM, RUNE, and MATIC. The percentages have changed a bit as well.
- High risk—This is like a medium-risk portfolio, but with the addition of two high-risk tokens. Star Atlas (ATLAS) and Immutable (IMX). Once more, the percentages have shifted around a bit.
Now, this may not have the projects that you prefer. But don’t worry, you can set up your portfolio as you like. Remember, this is a sample. Nevertheless, do let us know in the comments, which tokens you like to add instead.
What is of importance now, is to position yourself in the right way. There’s a logic to follow.
- Figure out how you like to balance your portfolio. What stable-, low-, medium-, and high-risk coins or tokens do you like to add?
- Now, chose the projects accordingly.
Note: For the low and medium risk projects, they are mainly L1 chains. When you select higher-risk projects, you can decide where you want to put your money.
So, keep in mind that small-cap coins are risky in a bear market. There is a chance that they may not survive. Hence, blue-chip coins are a safer bet now, since they have better funding. Furthermore, they have most likely more adoption.
It is also important to keep on top of your portfolio. Manage and adjust wherever and whenever it’s needed. In other words, replace coins or tokens when you think the market conditions call for this. You need to play this proactively. During a bear market, sitting back and relaxing is not the way forward. Here is our strategy number 1:
1) Stablecoins to the Rescue
The first option is to look at stablecoins. Despite the whole TerraLuna (UST) story going on, this is still a good move. Curious about what exactly happened with Terra, check out this video.
Coming back to the point, the bear market is the time to invest in stablecoins. Even as high as 50% of your portfolio. Yes, we know, it’s not the most exciting option. However, they are what they say, stable, and that’s what you need in this situation. You don’t want or need another loss of 70% to 80%. So, how about making some profits on your stablecoins instead? Let me show you how you can make a profit on a stablecoin.
- Before you find yourself in a bear market, don’t forget to take profits. Once you let’s say double your investment, take the original investment out. All that you left in, is now at 100% profit. You can put your original investment for 50% in stablecoins. The other 50% go in blue-chip coins like Bitcoin or Ethereum, to hodl.
- There are always different strategies you can follow, and we post about many of these. Farming is a great way to earn passive income on your stablecoins. Some farms offer up to 35% to 40%.
- From your yield farming, turn some of your profits back into stablecoins. First, you earn more tokens when the price is down. Once the price goes up again, you have double gains. You accumulated more tokens, and you get a higher price now. To find the best yield farms, you can check the Coindix site.
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It’s also a good idea to subscribe to our channel as we are always on the lookout for passive income opportunities.
But remember, stablecoins are not completely without risk. And after the UST fiasco if you are confused about which is the safest stablecoin check out this detailed video.
2) Buying the Dip
That’s the most heard advice, buy the dip! But, when and where does the dip stop? That’s a crucial question, right? Well, to tell you the truth, nobody has a crystal ball that allows them to know the future.
Dips can be like a falling knife, and you would rather not want to catch that. In other words, you don’t know when the dip reaches rock bottom. Another aspect to consider is that not everybody has endless deep pockets. At some stage, there can be a dip, but you ran out of money two dips ago.
So, here is a good option for you; DCA or dollar cost average. Instead of going in with a big wad of cash on one specific day, spread that amount out over several weeks or months. This way you spread your risk. Regularly, you add money to your portfolio, regardless of the current price of that asset. You can follow a similar trading strategy when taking out profits.
Irrespective of the market state, at some point we all feel confused about whether we should be buying or selling. That is where you need Altcoin Buzz Access.
3) Non-Crypto Active or Passive Income
Our third option to help you stay afloat in a bear market is to have a non-crypto passive or active income. Yes, having a passive income stream outside of crypto is a good and smart thing to have. Look into having more avenues of income. In other words, widen your investors’ mindset and horizon.
Therefore, spread your investments in various sectors. You can look into a variety of options:
- stocks
- bonds
- real estate
- cash-value life insurance
- derivatives
- cash
- precious metals like gold or silver
- annuities
You need to move forward in your current position. Also, you can ask for a higher salary or switch careers. Or, you can cut down on your expenses.
Furthermore, in the crypto space, there’s high demand for resources. This is the active part of income outside of crypto. As a plus, crypto jobs tend to pay well. However, this will also depend on your qualifications. Web 3.0 is calling! There are many courses out there, and plenty of them are for free.
4) Dive Deep Into DeFi
Our fourth and last option is to take a deep dive into DeFi. During the bear market is when you should put the hard work in. What hard work is it that we are talking about? Well, you want to set everything up in such a way that once the bull market starts, you can take your profits. That’s the time when you can relax and kickback.
For now, it’s important to stay updated in DeFi. In all fairness, that’s not always an easy task. However, once you put the time and effort in, and figure it out, the rewards are well worth the time you invested. Moreover, new DeFi strategies will likely be even more complex. That’s why it is critical to work on your basic knowledge now.
We, at Altcoin Buzz, have written many articles about DeFi strategies. This includes articles about:
- stablecoin farming
- yield farming
- reviews how to get yield at a wide variety of protocols and platforms.
It is well worth looking into our vast catalog on DeFi and yield farming. We explain strategies in detail, and oftentimes we also have ‘how to…’ articles about these topics. Furthermore, work together with others. Start or join Discord or Telegram groups with like-minded people. Have discussions and learn with and from each other.
Moreover, figuring out complicated projects or strategies is easier with others than doing it on your own. Here is an interesting list of what to do in a bear market.
Here is my #DEFI checklist. Print it, save it, whatever helps you to get through these times. Remember, its only a #bearmarket until its not 🐻 pic.twitter.com/Kf5lfPm2qa
— Sounds Tricky 🎃👻 (@SoundsTricky) April 27, 2022
- Make a plan and stick to it. Have a long-term mindset.
- Keep believing in yourself.
- Turn off the $ value tracker on your portfolio. During a bear market, you want to avoid looking at that value.
- Keep track of your token count. You need to know how many tokens you earned from staking.
- Use DefiLlama to keep track of the various TVLs of the protocols you follow.
- Confirm your staking strategies, again and again. If you have doubts about a protocol, move your tokens.
- Stake as many tokens as you possibly can. If you can’t stake a token, make sure you are 100% behind this token when holding.
- Choose a staking scenario that suits you best. A bullish, bearish, or neutral scenario.
- Don’t use stablecoins on reward tokens. Stake to earn only. Stables are of more value to you during volatile moments.
- Use your rewards only (not investment) for the hardest-hit tokens. The tokens with the least losses, use these to buy tokens with the biggest losses.
Therefore, we can also highly recommend our Access program.
Conclusion
Here we are, at the end of this article. We hope that we were able to give you some useful insights on how you can stay afloat during a bear market. We came up with four solutions that can make a difference. These options will ask you to invest time and most importantly, do yourself a favor as well. That is, to do your research.
For more cryptocurrency news, check out the Altcoin Buzz YouTube channel.
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