Crypto is tanking.
For some reason though, Crypto investors don’t seem panicked.
In fact, a lot of them are expressing excitement about the current conditions.
Part of the reason for their enthusiasm comes from understanding the climate of crypto and how it differs from a typical stock. For starters, corrections (AKA a dip over 10%) happen a lot more frequently than stocks. This contributes to the classification of crypto as a volatile investment.
But while a lot of people are focusing on the higher frequency of crypto corrections — and bear markets (AKA dips of 20% or more) — few are considering the quicker rate of recovery. Bitcoin, for example, a coin that shot from less than a cent to nearly $20,000 in just ten years saw multiple drops within that span, some as big as 50% within a single day. Those drastic crashes could’ve called Bitcoin a goner, but yet again, it resurfaced.
Crypto experts understand that all markets (not just those built on the blockchain), have cycles.
These include highs and lows, loss and gains and sometimes completely unexplainable and unpredictable situations. What we do know is that stocks take a lot longer to recover — with an estimated average of 1.4 years to rebound from bear markets. Crashes (defined by short-lived plummets) tend to hover in the 4–5 month category, which still legs behind crypto’s record next-day recovery.
Back in November of 2021, Bitcoin reached an all-time high of $68,000. At that point the question on the street was, “Is it too late to get in the game?” For many it was, which left hungry investors frustrated for having hesitated. Funny change in narrative however, as just a few months earlier in July, Bitcoin reached its record low (which was just broken in 2022), crashing below $30,000. Having heightened perspective is needed here to see what investors have been saying all along: Bear markets are opportunities.
Bitcoin went from its lowest value to highest value in less than 5 months.
It reemphasizes the point that big fluctuations are normal, and if played right, can be majorly advantageous for investors. Of course, these drastic shifts can mean devastating overnight loss, but the charts show the recovery process can be just as immediate.
When approaching crypto with increased awareness, we can transform bear markets into opportunities for growth. So how can you take advantage of the dip?
- Diversify
While prices are at an all-time low, it’s not a bad idea to diversify your portfolio by some cheap investments in different currencies. By diversifying you increase the probability of one restoring and receiving a pretty ROI.
- DCA (Dollar Cost Averaging)
The tactic of splitting a big investment into multiple purchases made over a period of time increases the chance of buying at the absolute lowest. Everyone wants to buy the bottom, but with no accurate way of knowing that, this is your next best option.
- Staking
During bear markets profits can freeze altogether, which is why staking on the blockchain is a great way to earn some passive income from your holdings. By locking in your crypto you also won’t have the same temptation to sell up and leave.
- Build your own blockchain project
It might sound crazy, but when the market slows down, incubator companies take the hit too. This might lead to finding some incredible deals on their services, in addition to having a ready-to-go project just as the bull market begins again.
- Market your project
Marketing during a bear market is like walking into a silent mall with a megaphone — there’s no competition, increasing your chance of being heard. While holding off on TGE is a wise move, nothing to say you can’t focus efforts on community and brand awareness while things are so slow.
That being said, crypto remains the same as any other investment: there’s no guarantee. But what attracts hundreds and thousands of crypto investors, is the promise of the roller coaster. There’s never a dull moment with cryptocurrency, whether you’re spiralling down or skyrocketing up. If you want an action-packed investment platform, consider crypto as your perfect match.
