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“Crypto winter is coming!”, “Crypto is dead!”, “How long will the Crypto bear market last?” If you have been a part of the Crypto industry, you must have heard these headlines that have been hitting the mainstream media. Things for the Crypto industry are not looking good, but does that mean you’ll lose all faith in the industry? You shouldn’t! We have curated a few ways for you that can help you survive the Crypto bear market in 2022.
Let’s start our journey!
Wait!!! Before we start, let’s first understand the basic terms like the Crypto bear market and Crypto winter.
What is a Crypto bear market?
A bear market refers to the negative or a downward trend in the prices of a market. It is not necessarily that it is used only in the Cryptocurrency space but also in the traditional markets like stocks, bonds, real estate, etc.
In general terms, a bear market is a solid market downtrend that shows a significant decline in the prices for a relatively short period. However, when we compare this downtrend between the Crypto-verse and the traditional markets, the Crypto industry is more petite and highly volatile. Therefore, it is considered usual to see stronger and prolonged bear markets, where 85% drops are pretty standard.
What is Crypto winter?
Before we jump on to what Crypto winter is, have you heard of the famous HBO series “Game of Thrones”? You must have likely heard about it, and its famous phrase, “Winter is Coming.” The term “Winter is Coming” was considered a warning about a conflict that could last for a more extended period and could happen at any time in the land of Westeros.
Coming to the Crypto industry, the Crypto winter is about to arrive, and this is going to be a challenging time for the investors and companies, whoever is related to this industry. During this period, you must be prepared for the chaos that can come without much warning.
In literal terms, the phrase “Crypto winter” is when the prices go down and remain like that for an extended period. According to market analysts, the Crypto winter has started to show its arrival earlier in 2022.
Okay, so now, in the following section, we’ll see the survival ways for an investor in the Crypto bear market.
5 Ways to Survive the Crypto bear market
- Take a break
The first and foremost thing to do is “take a break”! During the downtrend of the Crypto market, it is obvious to be negative, but it is also apparent to maintain a healthy state of being. It gets self-evident to have tunnel vision during such times; if you think you are facing this, you do yourself a favor and take a step back.
Try to divert your mind off the market for some time, go on a vacation or meet a friend whom you’ve not met for quite a long time, or indulge in some artwork.
If you have faith in the potential of blockchain and Cryptocurrency, keep in mind that the basics have never been more optimistic in the recent history of this industry.
- Don’t try to time the bottom.
Don’t blindly trust the experts or influencers who tell you that they can accurately call the bottom; they are merely relying on astrology or trying to be the Nostradamus of Crypto.
In simple terms, timing the bottom means you want to purchase Crypto at its lowest possible price. However, if you think you bought Crypto at its lowest at any given time, remember that its price could still drop. This implies that you’ll be forced to sell that Crypto again to purchase at a lower price. If you do this, you will be more likely to shrink your portfolio.
- Use Dollar-Cost Averaging (DCA)
Dollar-Cost Averaging (DCA) is a type of investment method in which the Crypto investors split a given amount they intend to invest and then invest money in a particular asset (e.g., a stock or a Cryptocurrency) at regular time intervals, whether the Crypto market is up or down. This is among the most excellent tactics to use during the Crypto bear market.
- Consider staking
Investors may experience insecurity during a bear market in Cryptocurrencies due to the declining value of their holdings, and they may frequently seek for strategies to protect their investments. In the Cryptocurrency world, “staking” is one method to enhance your security and profit over the course of a long-term hold.
Staking involves locking up your Cryptocurrency coins on a blockchain for a set period to generate passive income.
- Always DYOR!
While it’s essential to pay attention to a company’s reps and be open to their perspectives, nothing improves your judgment like independent research. So before opting to trade BTC/USD versus ETH/USD or any other Cryptocurrency, always look at their historical charts.
Final thoughts: Have a life outside the Crypto world!
Crypto is a 24/7 market. It will feel like a Netflix show you can binge-watch, and it’s so easy to get overwhelmed and lose sight of other things. So, instead, focus on going out to meet your friends, go shopping, or indulge in some hobbies.Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.