A bear market for ripped investors in the market is seen as something quite normal. Bear markets have occurred many times before and will continue to occur in the coming times as well, both for standard currencies and cryptocurrencies.
A good chunk of fresh investors is currently experiencing a taste of crypto winter, as majority of the assets have had their value dropped by more than 70% compared to their recorded highs during end of last year. A bearish market can be quite annoying for everyone, especially fresh investors that are not aware of the difficulties it brings in terms of the state of the market.
However, all hope is not lost, as there are quite many ways of generating some impressive income even during the difficult state of a bearish market, you just need to seek them out. The sections below will first discuss about the bearish market and then will move forward towards the main highlights, that are the most popular and trusted methods of generating passive income in a crypto bearish market.
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Let’s move towards understanding a bear market.
Knowing about a Bearish Market
Speaking in terms of normal assets such as stocks, a bear market occurs when that stock has dropped 20% or more of its valuation compared to its record. Referring to cryptocurrencies, a bearish market can often last a long period where market assets experience a significant loss in price valuations, while also having a reduction in overall conviction.
Players often question about the duration of a bearish market situation, and the answer to that is quite vague, because although a set time frame does not exist, majority of the community believes that a bearish market can last up to three months minimum.
The crypto winter currently being experienced started way back in the end of last year, and as of now, there have been no indications on its conclusion, so there is no telling when all this will finally end.
Looking at the previous crypto winter, it stayed for almost three years, showing its presence from the year 2017 till the year 2020. So, if the current market situation follows in line with the previous one, then players in the market will have to wait for quite a while till the storm passes out.
Since practically every type of asset experiences a drop in a bearish market, after a while, investors seek out the assets that are being sold for decent rates, thereby eliminating the bearish market situation entirely. The defining factors of a bearish market are the minimal levels of optimism and belief coming in from investors.
Investors are inclined towards negative developments, without taking any interest in the positive ones, thereby leading them to sell and drop asset rates.
The ingoing bearish market is the third ever major bear market after the introduction of the concept of Bitcoin, with assets losing more than 70% of their valuation from their previously recorded highs. The worst part about all this is that players have an almost 0% chance of recognizing the initiation of a bear market.
Tackling a Bearish market
As per the ongoing market situation, having severe volatility and uncertainties, the sensation of being pressurized should be seen as something normal. It is quite challenging to keep your mental state in check, as choosing the right paths and performing the correct activities can be hard, especially if your profile is trying to sustain damages.
With the initiation of a crypto bearish market, almost all types of assets experience either a short or major drop in valuation regardless of their expansion or growth. Tackling a crypto bearish market requires a ton of experience and skill to overcome.
You must have a clear sight and should stay inclined towards the expansion and maturing of the project or plan you are engaged with, and not only have your eyes on the valuation levels.
A good portion of assets recover with a good valuation after a bearish market, however the profiles hit the hardest can take quite a while before they can get back on their feet, and in fact, some profiles never manage to get back up. The bearish market sets the appropriate instance in which keeping money stable is vital to stay a part of investing.
According to top billionaire, Warren Buffet, it is you who must seek out opportunities when the market is in chaos, in order to make it in the long term. So then it comes the point of using the bear market and making the most out of it to develop a strategy that can assist you in making passive money and rid you of any difficulties that come with a bearish market.
Perks of a Bearish Market
A bear market is often seen as negative because of the fall in price valuations for most assets, however there are some perks that a bear market can being which you should know about.
If the rates of assets start to fall drastically, it becomes a wonderland for buyers and investors, as they can get their hands on their desired assets at a much cheaper rate compared to the recorded highs.
Players often buy tons of assets during a bearish market and then make money off them by putting them up for sale, when the market finally recovers back, and the assets start to regain their valuations. Assets not affected by a bearish market are generally rare, but there are still offerings for them.
Taking control of your emotions is also one very vital way of taking advantage of a bear market. Players not able to handle their emotions become fearful and start to sell, however they don’t realize that bear markets do not stay forever. Although bear markets can long quite a while, but still that time frame is not permanent.
A bear market is a something which highlights the matured investors versus the young investors that prefer speedy gains. It is mostly the matured investors that have the patience to manage in the situation of a bearish market and become victorious and successful.
Another thing a bear market highlights is the measure of the level of risks that investors can handle. Panic sellers show that they are not in with risking their money, meanwhile those managing to have patience can handle risks.
Techniques of Generating passive income
This section will now discuss the various techniques through which players in the market can take advantage of a crypto bear market and generate passive money out of it and surviving the harsh market situation with effectiveness, as looking for assets unaffected by the market situation is very challenging.
- Crypto Staking
The significant behind keeping a grip on your tokens is one impressive instance of how bearish markets can be utilized to make passive money. Staking is one very attractive method of making some money, as it also helps you to be a significant part of a certain project. In staking, you basically commit your crypto onto a certain platform in order to obtain the interest generated on the commitment.
Majority of the platforms that provide this kind of opportunity have two different choices to choose from. One is called flexible staking in which you have the ability of taking out your crypto anytime, and the other is called fixed staking, which is basically a type of contract that commits your crypto for fixed time frame, typically around a month or two.
Popular platforms including Binance, KuCoin and many other provide players with the opportunity to stake their crypto. Furthermore, decentralized exchanges like Uniswap, Curve and others give investors a chance to submit liquidity from which the investors can obtain a portion of the trading fee generated.
- Being Active in the Crypto Trading Market
As mentioned in the previous section, trading during a bearish market situation can be quite beneficial, as many assets are available at discounted rates, which can be sold after the bearish market to generate tons of profits. It can become challenging to the find the best assets for purchase, however those managing to keep up can make quite an impressive income.
There is a plethora of different platforms that provide trading opportunities for players, while many platforms also providing learning opportunities for investors so that they can come up with the relevant plans to trade during the bearish market situation effectively, without having to experience significant loss.
- Crypto Mining Operations
Mining is also a profound method of making income during a bearish market. Despite the results being significant lower compared to mining in a bullish market, however the whole process can be beneficial if you have the required resources and capital to operate a mining operation.
Miners have the option to either go it alone, or be a part of a mining pool, in which several different members combine their mining capabilities to deduce solutions at a more efficient rate, and then distributing the rewards obtained according to their level of performance and work.
- Associate Advertising
This is a type of method which involves you advertising a certain plan, product or service and then receive your rewards if the buyers use your associate links to purchase them. There are many different platforms that can allow such opportunities. Majority of them being social media platforms like Facebook, Instagram or others where the major population resides.
This is seen as a risk-free method of making money, as the rewards are scaled upon different sources, while some of them even rewarding advertisers with native tokens, which are somewhat considered to be the gems.
- Airdropping Events
Airdropping is another almost risk-free method of making some money during bearish markets. As the name suggests, different projects distribute free tokens to the public, in a way to gain more attention and followers, while also advertising their own projects and their vision for the future.
Those interested can keep track of airdrop opportunities on sites such as Airdrop Alert, CoinMarketCap and others.
However, there is one thing to take note of. There are possibilities of fake and misleading airdrop events who intend to gain access to people’s digital wallet private keys, so it is important to research about the project before going in and taking part in an airdropping event and providing your private information.
- Dollar-cost Average Technique
This method involves purchasing a static amount of assets, without worrying about the prices that they are being offered. This process of purchasing is done according to a set schedule. The thing about this method is that the assets are being purchased at variable prices, there is not fear of purchasing one time at peak prices and then somehow not being able to sustain them.
This method can also be applied to take part in initial coin offerings (ICOs), obtain altcoins or just getting Bitcoin. As this is a long-term method, the price valuations will eventually gain balance, thereby generating profit after the bearish market settles.
- Utilizing Stablecoins
Because of their nature of being attached with assets like Gold or the US Dollar, Stablecoins are not subject to the levels of volatility that normal cryptocurrencies must experience during a bearish market, so utilizing them is also a good way of making money.
Stablecoins protect you not only from the effects of a bearish market situation, but also from currents that drag you towards situations that are plagued by the effects on inflation.
Stablecoins also retain purchasing power for investors and generate impressive interest levels. But it crucial to know that despite their nature of being a counter to volatility, stabelcoins are not free of risks, as seen what happened during the chaos of the UST depegging that occurred in the month of May.
- Decentralized Finance (DeFi)
Investing into DeFi Projects is also a very good way of making money. But the thing to note is that careful and tedious research is required before you can invest into a project, so that you are clear of the intentions behind it. Good DeFi projects have been known to generate impressive returns to investors, so there is no doubt that it is a great choice.
Especially with the increase in popularity of decentralized finance, investors have a chance to invest in good projects and gain the income they desire in order to sustain their position in the market.
- Developing NFTs
Non-fungible tokens (NFTs) have become one of the most popular ways of making money in the cryptocurrency space. These are basically virtual items like pieces of art, music, figures that can be assigned a unique ID and submitted onto a blockchain. Once submitted they can be traded out on platforms like OpenSea.
Having the skills and talent to create to your own NFTs is a great way of making money and is almost seen as risk-free. Many talented individuals around the world have managed to sell millions of dollars’ worth of NFTs around the world.
- Seeking a Job in the Crypto Space
Despite the market being in an unhealthy state, the need for workforce to power cryptocurrency and blockchain projects has experienced a massive rise.
There are many kinds of job opportunities now available in the crypto sector related to advertising, technical fields and management, so if you possess the talent and fulfil the requirements, then looking for a stable job in the cryptocurrency space can be quite a trivial task.
Another advantage of this is that you are paid in crypto, so there is a chance that the crypto you are being paid in gains value after the conclusion of a bearish market situation, leading to unimaginable profits.
- Staying Vigilant of an Opening
Although there is no shortcut in making money, especially when a bear market situation is present, however there many different opportunities to look for and strike when the chance is good.
As we know that these type of market situations eventually come to and end, so there is a lot that can be juiced out from such kinds of situations. There is not doubt that market situations like these bring the true nature of investors out of them, as they seek to manage through the rough time period.
Concluding this topic, a bearish market can happen at any time, so it is important for you take the necessary measures to go through this rough time frame. Many players see bearish markets as a negative aspect, but some find it as a golden opportunity to make money out of.
Looking at the above sections, there are a ton of ways you can utilize the bearish market situation and gain passive money sources that can help you go through it without loosing much, while also assisting you in maintaining a good reputation and position in the market.
To make the best of your abilities and become a successful investor, it is advised to not panic and come up with solutions that are beneficial not only for the duration of the bearish market state, but in the long term as well.
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