How to Invest Successfully During a Crypto Bear Market
The current crypto winter is far from over but what can investors do to avoid feeling the chill?
In this post, we’ll be exploring some of the most effective strategies that investors can implement to insulate against falling prices and generate sizable profits.
What Are Crypto Bear Markets and How Long Do They Last?
Not every dip constitutes a bear market. Rather it is defined as a sustained drop in crypto market prices of at least 20% that leads to negative sentiment.
The resulting market pessimism can be scary and stressful, leading to unproductive emotions like fear, uncertainty and doubt (FUD). However, it is important to understand that bear markets are a natural, inevitable and integral part of the investment cycle and they can also offer lucrative opportunities to buy promising assets at bargain prices.
It is almost impossible to predict how long a bear market will last and they can continue for months or even years.
What Are Some Common Crypto Trading Methods in a Bear Market?
There are a number of popular strategies that are particularly effective during a downturn.
One of these is Dollar Cost Averaging, a strategy that involves dividing your investment capital into smaller sums and then making a series of trades at regular intervals over an extended period. In a bear market, this strategy enables you to minimize the impact of falling prices, since rather than making a single, large asset purchase, you are reducing your exposure by making several smaller trades over time.
A good idea in any market is to expand your portfolio and diversify, since certain types of digital currencies may be more volatile than others in a bear run. This ensures that your risk is spread across multiple types of crypto assets from utility and payment tokens to NFT’s, DeFi tokens and asset-backed tokens.
When diversifying in a downturn, a smart addition to your portfolio is stablecoins, which, as the name suggests, are deemed to be less volatile than other types of digital asset. Stablecoins like USD Coin (USDC) and Tether (USTD), which are pegged to the price of underlying assets, are considered to offer one of the best ways to hold capital in times of heightened market instability.
What Bear Market Strategies Offer the Highest Passive Profit?
Let’s look at some of the lowest-risk and lowest-effort strategies that will enable you to generate generous revenues even during a crypto crash.
One of the best ways to continue to earn the same ROI, whichever way the market is moving is with an interest-bearing wallet. Here at ArbiSmart, our freshly- launched wallet generates industry-high rates of up to 147% a year in both bear and bull markets.
The wallet, which was introduced in July, supports 25 different FIAT and cryptocurrencies. Wallet holders who choose to lock their funds in savings plans for brief 1 and 3-month stretches, or for more prolonged periods of 2, 3, or 5 years will earn higher interest, the longer the lock on the funds. While wallet holders can choose to receive the interest, which is paid daily, into a separate balance where it can be withdrawn any time, they can earn a better rate if they have it automatically added each day to the locked savings balance.
Interest rates are based on account levels and the wallet holder’s account level is determined by how much of our native token, RBIS, they own. More RBIS means a better return on balances in all supported currencies, from Bitcoin and Shiba Inu to Euro and USD. It also means that the wallet holder can enjoy compounding at the higher account levels.
If the savings balance happens to be in RBIS, then the wallet owner will earn three times higher interest than for any other FIAT or crypto balance. However, those with balances that remain in Bitcoin or Euro will be able to increase their profits, if they choose to receive the daily interest in RBIS.
Another passive profit channel that offers exceptional returns at close to zero risk is automated crypto arbitrage. This is a trading strategy that exploits temporary windows in which a coin becomes available on various exchanges at different prices simultaneously. These arise all the time in both rising and falling market as a result of disparities in size, liquidity and trading volume between different exchanges.
Here at ArbiSmart, the user just deposit funds and our automated crypto arbitrage system takes over, generating up to 45% a year, depending on the amount invested. Our system converts the funds into RBIS and puts them to work. It is connected to 35 exchanges where it monitors hundreds of coins, every second of the day, on 35 exchanges, looking for temporary price differences. It will then buy the coin wherever the price is lowest and instantly sell wherever the price is highest to make a profit.
Yield farming offers another means of putting your money to work for generous passive profits in all types of market conditions, while you wait for prices to bounce back. By staking, or loaning funds through liquidity pools, using secure, smart contract technology, you can be rewarded with generous returns.
Here at ArbiSmart, in the coming weeks, we’ll be introducing our new decentralized yield farming program, with a new innovative twist. The program will offer never-before-seen gamification features enabling participants to boost their profits. Liquidity providers will be rewarded with 0.3% of every trade, in addition to up to 190,000% APY.
What Kinds of Projects Do Best in a Bear Market?
The types of projects primed to succeed in a falling market, are those that are consistently expanding, whatever the market trajectory, creating new bear-resistant revenue channels and strengthening the token economy.
At ArbiSmart, we are in the process of adding multiple new EU authorized utilities to our financial services ecosystem in a development push that is set to continue through to the end of 2022. In addition to the recently launched wallet and yield farming program, which is scheduled for next quarter, upcoming services also include a mobile application for purchasing, exchanging, selling and storing crypto; an NFT marketplace for buying and selling non-fungible tokens, a unique collection of our own original NFT’s, a professional crypto exchange, and a play-to-earn metaverse, where visitors will be able make a profit by buying, developing and selling virtual plots of land.
Since all the utilities in the ArbiSmart ecosystem are interlinked, RBIS holders can enjoy attractive benefits, when using more than one utility. For example an ArbiSmart NFT could boost a liquidity provider’s APY or increase their game score in the metaverse.
Just like our existing utilities, all the upcoming services will require use of RBIS, which should drive token demand significantly. Let’s also not forget that as the new wallet gains momentum and more people lock RBIS in savings balances, the available supply will shrink further. This is because the token supply is finite, meaning the total amount of RBIS that can ever be created is capped. As demand exceeds supply the price is set to rise. In fact, analysts anticipate a 7,000% rise in value by the end of 2022 This will mean huge capital gains on top of profits from savings balances, staking, gaming, trading NFTs and more.
If you wish to start putting your money to work, while waiting for the crypto market to recover, you can open a wallet right now. Or, you can learn more about crypto market trends investment strategies and more by browsing the ArbiSmart blog.