7 Ways to Make Money in a Crypto Bear Market: Full Analysis
Crypto markets can be volatile, and in a bear market, falling prices may seem like a nightmare. But there are ways to make money in a crypto bear market—and lots of them. Here's an analysis of seven unique strategies you can use to make money while the market downturns.
The 7 ways that you will read in this article are :
1. Trading Leverged Tokens 2. Staking Coins 3. Trade Perpetual Futures 4. Launchpads 5. DCA Strategy 6. Trading Bots 7. Copy Trading
What is a Bear Market?
A crypto bear market is a period of decline in the price of cryptocurrencies over a prolonged period. During this time, investors who had previously purchased digital currencies are likely to sell them off at a loss due to their lack of faith in the asset’s potential to increase in value.
How to Make Money in a Crypto Bear Market?
1. Trading Leveraged Tokens
What is Leveraged Tokens?
Leveraged tokens are based on
the value of an underlying currency, such as BTC, but they are not strictly a
currency themselves. Instead they are managed funds that multiply the profit or
loss by a set value. For example, if the price of BTC rises by 5% and you are
holding the BTC3L asset, your profit will be multiplied by 3,
and it will be like BTC went up by 15% instead.
On the other hand, if the price of BTC declines by 5% and you are holding
the BTC3S asset, your profit will be multiplied by 3,
since BTC3L : represent long positions and BTC3S :
represent short positions.
Unlike high risk divertivies trading as they are monitored constantly, there is
almost 0 risk of liquidation! There is only a small management fee of 0.1%,
taken from your position once per day.
On the downside, their value erodes over time when there is volatility on the
underlying asset. As such, they are suitable for short term
investments and will depreciate to almost 0 if held for a long time.
Where to Trade Leveraged Tokens?
The best place to trade
leveraged tokens is Bitrue Exchange where you can find
several tokens to choose from.
Steps
To Trade Leveraged Tokens on Bitrue Exchange
1. Go to Exchange button on the top corner.
2. Then
choose EFT on the left.
3. Choose the pair you want to trade.
Remember :
BTC3L: Is 3x long BTC. When
the price of the underlying asset increases by 1%, the net value of the product
will increase by 3%.
BTC3S: Short BTC 3x. When the underlying asset drops by 1%, the net
value of the product will increase by 3%. That's it , you're done !
How to Use Leveraged Tokens to Profit in Bear Market?
As stated above, when you choose any pair with ends in ( S ) , that means you open short position on this pair. That's also means, when the underlying asset drops, you get profits.
Let's take a real example:
The underlying asset BTC/USD daily
chart shows that the pair have dropped more than %12. However, when we look at
leveraged token BTC3S , the token has skyrocketed more than %50. The
token has rose from $0.054 to $0.090.
Thus, if you had bought BTC3S
in the above example, you would have been in profit.
2. Staking Coins
What is Staking ?
Staking is a process in which you use your coins to verify transactions on the network, as oppose to Hashing. However, Staking is now used to describe the process of holding coins in a wallet and collecting rewards according to how much you have. The more coins you have staked, the more rewards you receive, which can be used as an incentive for keeping your wallet open. And since this is an easy way to make money while doing nothing at all, many people choose this option as their primary source of passive income.
You can choose from many coins in the market to stake. Most wallets and
centralized exchanges offer Staking option for their customers.
However, even if you gain
rewards when you stake a coin in a bear market, there is a risk that your
coin plummets sharply, therefore , you will not notice your profit. You have to
wait the market to turn its course upward.
Because of that, we
recommend staking USDT or any stablecoin in bear market , because you avoid the
risk that your funds decrease in value.
During bear markets, finding the right place to stake your coins can be tricky. Luckily, two of the best platforms for staking coins in a bear market are Nexo and Bitrue, both of which offer some of the highest annual percentage yields (APYs) on the market today.
In Nexo, you can stake BTC up to 7% APY , ETH 8% , XRP 8%, AVAX 12% and USDT 12% .
Register at NEXO Platform and Deposit $100 to Get $25 free in BTC
Alternatively, Bitrue exchange offer 7% APY for SOL , 8% MATIC , 12% ATOM, 15% NEAR and 7% DOGE. Also, you could choose many more tokens in their platform.
Don't forget that the platforms can change the annual percentage yields from time to time.
3. Trade Perpetual Futures
Futures trading is
very risky. We do not recommend it , because it can liquidate your funds. So
please use an amount of funds that you are willing to lose.
Unlike regular spot trading,
with perpetual contracts you can either buy long or sell short.
When you think there's going
to be a dip in the market, you take a 'short' or a 'sell' position; if you
think the market is going to go up, you take a 'long' or a 'buy' position.
Buying long means that you believe the value of the asset that you are buying is going to rise over time, and you will profit from this rise with your leverage acting as a multiple on this profit. Conversely, you will lose money if the asset falls in value, again multiplied by the leverage.
Buying short is the opposite - you believe that the value of this asset will fall over time. You will profit when the value falls, and lose money when the value increases.
Perpetual contracts allow you
to multiply the profits and losses on your positions through a system known as
leverage.
For example, if you
select a leverage multiple of 5x and the value of your underlying asset rises
by $1, you will make $1 * 5 = $5. On the contrary, if the underlying asset
falls by $1 you will lose $5.
So, in bear market just open
short positions to profit from declining market.
You can Trade Perpetual Future at Bybit and Earn $550 in Bonuses
4. Launchpad
What is a launchpad?
A launchpad is a platform that provides users with access to pre-listing and token launches.
It allows users to
participate in groundbreaking blockchain projects, earn new tokens directly on
hosted launches, and gain early access to new project listings.
Just look at the Launchpad at Bybit Platform , and see how the huge returns people got from previous tokens launches. Some projects gave %3938 returns and other projects %2050 and %1847
How to Participate on Launchpads Projects?
Although many exchanges provide Launchpad opportunities at their platforms, but we will take ByBit platform as an example.
In snapshot period ,you have to deposit at least 50 BIT token into your Bybit account ( You can buy BIT in Bybit platform ) . To calculate your daily average BIT balance, Bybit adds the total amount in your Spot Account, Earn Account and Derivatives Account throughout a day and divides it by 24 hours.
During the subscription period, you need to head over to the Bybit Launchpad and click the "Commit Now" button to commit a certain amount of BIT towards the new project.
During distribution period, and based on your final token allocation result, the corresponding BIT equivalent will be deducted from your committed amount, and the remaining BIT will be credited back to your spot account.
The exchange rate between BIT
and the new token will be confirmed 2 to 4 hours before the subscription period
starts.
5. DCA Strategy ( Auto-Invest )
The DCA (dollar-cost
averaging) strategy involves buying small amounts of crypto periodically
instead of buying a single, large order. This means that you are setting up
muments or smaller payments to buy cryptocurrency.
By doing this, you can spread out risks and increase your chances of getting
returns over the long term.
In addition to spreading out
your risk, DCA can also help you take advantage of price dips during a bear
market. Instead of buying a large amount of crypto all at one time, when the
prices go down, you will be able to buy more BTC with the same budget.
This averages out the cost of each coin and can be especially helpful if you believe that the markets will eventually recover or when trends indicate that buy signals are likely in the near future.
For those looking to adopt a DCA ( Dollar-cost average ) strategy, Binance provides an excellent Auto-Invest option. Head to the Auto-Invest page, where you can research the historical ROI of available coins.
After selecting the specific coin you want to invest in, click on Create a Plan icon. Here you can set the recurrent cycle for investing in the coin ( daily, weekly etc. ) along with specifying the amount you want to spend each cycle.
6. Trading Bots
A crypto trading bot is a
computer program that helps traders identify and capitalize on cryptocurrency
market trends. These automated programs can work 24 hours a day, seven days a
week to detect and execute buy and sell orders according to predetermined parameters
established by the trader.
Trading bots allow
crypto traders to benefit from price fluctuations without needing to be tied to
a computer or monitor markets around the clock.
However, traders will need programming knowledge to be able to use these
automated tools effectively. Fortunately, some cryptocurrency
exchanges allow users to copy trading bots from experienced members
so that they don't have to create their own.
You can start trying Trading Bots in Bybit platform. Bybit offers a selection of different bot types, including spot grid bot, DCA grid and future grid bot.
On the Trading Bot page, you can check out the leaderboard of the best traders by APR and choose who to copy. All it takes is a few clicks, just select your desired investment amount and click Confirm.
7. Copy Trading
What is Copy Trading?
Copy trading is a type of trading strategy in which traders follow the
trading patterns and decisions of more experienced or successful traders. The term refers to automatically copying the trades that are made by another trader without having to manually enter each trade yourself.
Copy trading services help new traders learn the ropes of cryptocurrency trading while also allowing them to take advantage of the experience and success of more experienced traders.
In this way, it enables inexperienced investors to mitigate losses during market downturns by copying those who know how to navigate those difficult times more efficiently.
Looking to get started with copy trading on Bybit? First head to the Copy Trading page, where you can check out traders with highest ROI or those with highest profits for followers. Select the trader that best suits your needs and click 'Copy' - then you're ready to start!
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