Disclaimer: This article is intended to convey more market information and does not constitute any investment advice. The article only represents the author's views and does not represent the official position of MarsBit.
Editor: Remember to follow
Source: bfrenz DAO
Original title: Beginner’s Bear Market Guide
So far, there have been several rounds of discussions about bull and bear markets in the market. According to various signs, we have also reached a consensus that we are in a bear market in the crypto market (also the global economy).
What can we do? Improve the Web 3 industry awareness and learn Crypto investment logic. The starting point of this article
is to not only help everyone survive in a bear market, but also to find ways to develop a portfolio plan that suits them, so as to make long-term money steadily. At this time BTC $19,421, ETH $1,328 found an opportunity, Long Crypto!
How to survive in a bear market (Survive - Thrive)
Everyone is telling you to survive in a bear market (Survive). We think we have heard enough, but there is still a better way. We decided to make a guide on how to still thrive in a bear market.
Step 1, make your investment plan
When you are aware and have plans, it will be easier to survive in a bear market. The plan you have to determine your risk profile and then consider the corresponding options.
Consider these three variables to prepare for your success: Beta (risk), altcoin exposure (altcoin exposure, altcoin is the abbreviation of "Alternative coin", which is simply all cryptocurrencies except Bitcoin) and yield opportunities.
Tips: Beta refers to the measurement standard for token volatility compared to overall market volatility. BTC is a lower beta asset, while altcoins with lower market capitalization are higher beta assets.
The following figure is an example of a crypto asset portfolio, don’t copy it!
lower risk portfolio:
- low risk (meaning that the return potential is basically the same as the overall market trend, the crypto market is becoming more and more stable, so the overall market risk is more controllable).
- has two main categories: the most secure crypto assets (BTC, ETH) and stablecoins, balancing risks.
- stores stablecoins on low-risk platforms with low returns, but it doesn't matter.
- For example: Maple Finance provides a considerable rate of return of 12% for USDC. (Maple Finance is an Australian-based decentralized finance (DeFi) company that provides institutions with borrowing from the DeFi ecosystem funded by the DeFi ecosystem)
- Learn more about staking opportunities and identify the earnings opportunities for different stablecoins.
Higher risk portfolio:
- Higher Beta assets will bring greater risks (and also mean higher returns potential).
- In addition to BTC, our altcoin layout is mainly in our Layer 1 (for example, ETH, AVAX, ATOM) and native tokens (for example, FTX's FTT).
- has fewer stablecoin configurations.
- is willing to invest in high-risk platforms to obtain high-yield returns.
- Small protocols like Osmosis provide lower cap token pairing (, ~50% of ATOM-OSMO) and have the potential to experience impermanent losses at higher yields.
- DeFiLlama provides a yield list of yields sorted by annual interest rate (APR) (a process by which cryptocurrency holders create additional returns with the help of the decentralized finance (DeFi) protocol). Higher yields lead to higher risks.
The above two different methods will produce different results. High risk equals high returns. A safer portfolio would be better for most people. Develop your plan based on your risk tolerance.
, regardless of the level of risk taken, the bear market will provide more downtime. It is best to spend this time investing in yourself.
Step 2, invest in yourself
Now that you have the first step plan, be sure to use your low market capitalization time to learn new skills and build your own advantages. (Why is now the best time to study? Because the bull market is happening too quickly, information comes one after another, fomo emotions spread quickly, and it is difficult to sink to go deep learning)
has three types of skills that can provide a great return on investment:
1) The ability to create income that can stand the test of time
skills that can generate income regardless of market conditions. "Technical Analysis" is a good example because it is a skill that can be applied to different markets.
You can check out Market Mediations' "How to Make a Bucket of Gold from Trading Cryptocurrencies" series courses:
https://www.youtube.com/watch?v=zTtvy9TJyYclist=PLfs71TITjLv1UVCrZ6XO2YvknFImjILf5
2) Investment skills that stand the test of time
No matter the market situation, these skills will help you keep and grow your funds. The ultimate goal of these skills is to form a helpful cognitive bias.
research investment strategies, such as the US dollar cost average method (DCA). Rather than buying a large amount of BTC when you feel good or trying to guess when to enter, try buying a certain amount of BTC at a set interval. We set this scene with the actual BTC price in the graph below.
Assume that you decide to buy $600 worth of BTC on January 1.
scene 1: No DCA. It's January 1, 2022 now. A new year, a new you. You thought it was a good opportunity and bought $600 worth of BTC. You've bought all of them, so your average purchase price is $46,230.
scene 2: Use DCA. You decided to get DCA to buy $600. That is, you decide that you will purchase a fixed amount ($100) at a fixed interval (6 months on the 1st of each month). We have circled the exact purchase price in the above image. You buy at multiple entry points, so your average purchase price is $39,677.58 (see the table below for how to calculate).
Another intuitive way is to pay attention to how the average trend of the blue dotted line goes down. This shows that DCA lowers the average price of BTC purchases.
Tips: Remember, what you want to do in is to buy low and sell high . Therefore, you can only benefit by purchasing, such as BTC, through a DCA strategy. (Don't blindly chase the rise at any time)
Market Mediation also has specific video courses about DCA:
https://www.youtube.com/watch?v=Hywtu14imes
- Reasonable use of on-chain data: is very simple, just register a Nansen account and start. Nansen also pays attention to what you are buying in the "Smart Line" account and the function of copying homework. These "smart money" are all very large investors in the market. They know how to make money in a bear market, so it is very worth tracking and paying attention to what they are buying and selling. (But don't be fooled by superficial phenomena, DYOR)
- Slowly establish investment encryption/Web 3 project process: In a bear market, the project party may not look particularly fast. Although it is not as strong as it is in a bull market, it is still worth paying attention to. All you need to do is pick gold from the wheat. Newcomers can take a look at these two articles:
- "How to study new projects"
- https://www.marketmeditations.io/alert-10x-your-crypto-profits/?s=r
- "Token Economics 101"
- https://www.marketmeditations.io/tokenomics-for-beginners/?s=w
3) Self-discipline
Mastering skills and continuous practice will lay the foundation for your growth and consistency. You can take a look at the "6 most important habits" long push by crypto asset investor and trader KoroushAK.
https://twitter.com/KoroushAK/status/1526591526352130048
To create a lot of wealth in a bear market, you just need to know where to start.
Now that you know, start to act (learn)
Editor in charge: MK
