In November 2021, the most popular cryptocurrencies hit an all-time high. Bitcoin topped out at nearly $70,000 while Ethereum was closing to passing $5,000.
The enthusiasm around cryptocurrency was tangible as investors were pouring their money into the asset class. But halfway through 2022, and the market has been through a terrible slump. Bitcoin and Ethereum fell by more than 50% since their all-time high, sending investors into a frenzy of fear.
There’s no other way to put it; we are in the middle of a bear crypto market (and every other market, for that matter). Buying crypto as prices keep falling is incredibly scary.
But will the bear market last forever? When will the bull market return? We don’t know the answer to those questions. But what we do know is that millionaires are made in bear markets.
How so? Keep reading below for the best bear market investing strategies.
Understand Crypto Market Cycles
The first thing you need to do is understand the cycles of the crypto market. Just like any other asset class, it has its years where it keeps going up, and it has its years where it keeps going down.
Of course, crypto is more volatile, so the price swings can be far more dramatic than with stocks. But the concept is still the same.
A bear market is a season. It might last a few weeks, a few months, or a few years. But it won’t last forever.
Cryptocurrency is a revolution. It’s less than 15 years old. But it’s the technology of the future. It’s not going away.
Just ask some of the most well-known investors who built their wealth long before crypto came about. Robert Kiyosaki, of Rich Dad Poor Dad fame, still thinks bitcoin is one of the best ways to become wealthy in the modern era.
Learning to weather crypto market storms is the first way to make money in the bear market.
The Crypto Bear Market Is for Buying the Dip
In a bull market, investors just wait for prices to fall so that they can buy the dip and sell when the price goes back up.
A bear market is nothing more than a sustained dip. It’s exaggerated. And it’s the chance to buy at the best possible prices.
It takes guts to load up on crypto during a bear market. But those who buy bitcoin at $25,000 will be doing very well once the price breaks $60K again in the future.
Of course, this isn’t a quick strategy. Buying now means waiting for the bear market to come back before you profit. It could be a long time. But it will come.
Learn to Short Sell
Short-selling is the opposite of buying a coin and wishing the price would increase. It’s the process of selling a coin when you think the price will go down, and then buying back in at the bottom.
It’s essentially the same process, just reversed.
Rather than selling coins you own, you borrow crypto when shorting. When you sell after the price decreases, you pay back the amount borrowed and keep the difference as profit.
Wealth Is Created in Bear Markets
Most people lose money in a bear crypto market. But that’s because they are paper hands and they panic sell. They cut their losses and move on.
But smart investors know that bear markets are the best time to buy. Every market has cycles. What goes down will eventually rise back up.
Looking for more money-making tips like this? Browse the articles on our blog now to keep learning.
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