Contrary to popular belief, its not all doom and gloom
So we are heading into the year 2020 and we are STILL in a bear market. As seen in the screenshot of the “Fear & Greed” index below, the overall market sentiment is still one of fear.
“Why is there still no killer app that will bring about mass adoption?”
This and more doubtful thoughts are probably in the minds of many in the space right now. Furthermore, recent negative news such as the sell-off from the plustoken scam and the Upbit hack do not help.
Unless you are a diehard supporter of Blockchain technology and Cryptocurrency, it is hard not to experience fear and doubts in this prolonged bear market.
While alt season may never come back again and we can say goodbye to the days of making 2,3 or even 50 times profit, there are still opportunities to earn from this bear market.
In this article, I would like to suggest 3 possible ways to still earn profits in this bear market. Read on to find out how you can apply them!
(Consistently) Buy and Hodl
Despite the increasing number of new Bitcoin wallets in the market, do you know how many wallets actually hold at least 1 Bitcoin? According to bitinfocharts, only 2.73% of wallets hold at least 1 Bitcoin or more.
What this means for you is that if you can consistently buy and accumulate Bitcoin, it is fairly possible for you to be in the top 10% in Bitcoin holdings in the entire market.
If and when the market turns bullish or when the ever-elusive “mass adoption” becomes a reality, that is when you are ready to profit and not rush in to buy with the herd.
Dollar-cost averaging is a great way to accumulate an asset class as volatile as Bitcoin. In layman terms, you buy Bitcoin on a monthly or weekly basis, flattening the price volatility and accumulating Bitcoin at a price that is the average of price fluctuations.
DCA Bitcoin is a good way to keep track of whether you are making a profit from your dollar-cost averaging methods. Simply input the amount and frequency of purchase and you will get the results.
Crypto Mining By Joining A Mining Pool
Depending on your point of view, mining altcoins may be a profitable venture. With the market in such a fearful state right now, many altcoins are currently priced below their ICO price.
This is despite the wonderful developments you hear from a number of promising projects. If and when demand for Bitcoin surges, investors will be seeking to invest in altcoins. That is when a market correction will happen and promising projects will see a rise in demand for their tokens.
Mining altcoins that you believe has a long term future is a strategic play for the next few years and will place you in a strong position in the event of a market rebound. Furthermore, it is currently easier to mine more coins when the competition is less intense.
To get started with Cryptocurrency mining, it is important to find a way to evaluate the profitability of mining different coins. Minerstat offers a dashboard that calculates block rewards, mining difficulty and current price to give you a fairly accurate picture.
Furthermore, they offer features such as profit switch that automatically switches mining from one coin to another based on profit levels you set. This is important in a volatile market where prices fluctuate rapidly.
By consistently mining coins you believe to have potential may result in yielding profits in the long run. Or if you are already a holder of many tokens, decentralized finance will probably suit you better.
Take Part In Decentralized Finance
Revolutionizing the finance industry is one aspect made possible by Blockchain technology. While we are still far away from achieving this goal, in my opinion, Decentralized Finance (DeFi) has taken a significant step forward this year.
Arguably the most popular example would be MakerDao and the DAI stablecoin. Under this ecosystem, users can borrow, trade and save DAI on the platform. This is done under the concept of the Collateralized Debt Position (CDP) that facilitates secure, transparent peer to peer lending.
The CDP concept allows a user to deposit their ETH as collateral in the smart contract and generate DAI, a stablecoin pegged 1:1 to the US dollar. To recover your ETH, you will need to pay back the DAI you borrowed plus interest accrued.
This system, while still in its infancy, offers you a system where you can lend or borrow to profit, depending on where you think the market direction is.
For example, you can lend your DAI or any other stablecoin to a lender who will put up collateral in a smart contract. The interest rates are transparent for both sides and both parties can decide to stop the transaction at any point in time, as they are in control of their assets all the time.
If you are an investor during Ethereum’s ICO round and just want to earn additional interest instead of leaving ETH in your wallet, DeFi may be a good option for you to consider.
There are always opportunities to earn a profit in any market- bull or bear. If you are a believer in Cryptocurrency and Blockchain technology like I am, take the time to research these avenues to earn!
Now is a great time to enter positions for the long term so that you are well placed to profit when the bull market arrives. Only making a move when there are actually signs of a bull market will not only ensure that you earn less, it may make you a loss as well.
Which other methods of earning in this bear market do you know of? Comment below!
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Disclaimer– Everything here is not to be taken as financial advice. These are merely methods that I find effective for myself. It is difficult if not impossible to “earn a quick buck” from these methods, so if you are looking for a quick profit this is probably not for you.
- Theree Ways To Earn In This Bear Market - December 17, 2019
- 3 (More Than) Questionable Practices Of Crypto Exchanges - November 10, 2019