The world’s investment and financial system is dramatically changing, with Crypto at the heart of this transformation.
The emergence and growth of digital currencies have been so rapid that they are now almost becoming a direct competitor and threat to the existing legacy finance system. It has been repeated that the most profitable investments globally are now digital assets (including NFTs). This is evident from how well several cryptocurrencies have performed within the last decade. For instance, Bitcoin (BTC) and HEX token has appreciated by more than 6,900,000 (Six Million, Nine Hundred Thousand) and 1,000,000 (One Million) fold. Respectively, since their inception to the most recent ATH (all-time high).
After these price explosions in this market, no global investor, especially those operating in the foreign exchange market, could remain indifferent to this growth rate. It’s certainly not to be taken for granted.
Profitability in this new market is so great that even large financial and economic institutions such as Facebook (now Meta) and JP Morgan Bank are trying to crack the code for their base currency. Even nation-states like El Salvador and lots more don’t want to be left behind.
By 2021, the total number of digital currencies globally has surpassed 9,800. However, a significant portion of them was not recognized and did not enter the economy. This shows how Cryptocurrency has become the focus of many.
The main difference between fiat and Crypto
For anything to be practical and recognized as a medium of exchange, it must act as a store of value (at least preserve value) and unit of account.
According to an excerpt from Gemini’s Cryptopedia, the main difference between fiat and Crypto is that “fiat is a legal tender whose value is tied to a government-issued currency. The US dollar, while Cryptocurrency is a digital asset that derives its value from its native Blockchain.”
Furthermore, nowadays, there is a lot of emphasis on decentralization regarding digital assets against the heavily centralized nature of fiats. In addition to the decentralized nature of Crypto, transactions once recorded on the Blockchain are immutable and can no longer be altered. This is not entirely true for Fiat transactions. Certain digital currencies and assets like BTC and Ethereum may be helpful when hedging against inflation. Their performances over the years have proven without any shadow of a doubt that they are better inflation-proof than fiat and even gold.
In Crypto, power is also transferred to the people as they take complete charge of their funds without a third party risk as long as they stick to the basic security principles. It is also good to note that Bitcoin, Ethereum, and Tycoon tokens (TYC) are the same. And anyone can purchase them from any part of the globe without limitations or barriers against the fiat system. Finally, Cryptocurrency or digital assets can offer anonymity (no need for KYC). While allowing everyone to transact freely, this is impossible with fiat.
How about the Crypto market volatility?
Investments, they say, are a risk, but the most important thing about investing is carrying out due diligence before taking action. Every investor must understand this clearly before making investment decisions.
The Crypto market, as we all know, is the most volatile across industries as there are too frequent price movements from time to time. For example, since the beginning of the 2022 Crypto bear market, the Marketcap value of Crypto assets has been experiencing a steep decline from $2.8 trillion to $938 billion at the time of writing.
Take, for instance, the recent frenzy about LUNA, as it was a total disaster with bloods on the streets. This market is susceptible as it quickly reacts to news and events such as bugs, dumps, and even approvals or disapprovals. This might explain why Central banks do not readily accept these currencies due to high fluctuations and usability for daily needs.
Can you predict Crypto volatility?
On the other hand, this volatility could present more opportunities for investors, especially traders.
Due to the high volatility of these digital assets, many investors are willing to move from the Forex market to the digital currency market. Of course, one of the arguments about Cryptocurrencies is that they don’t have the support they need to be recognized and accepted by the general public. But experts in this market disapprove of them. They believe that the very high security of these currencies is one of the most critical factors in their value.
Check top Crypto news websites like Insights. You can find the latest and best news about the 2022 Crypto bear market and review.
One very essential skill to have after doing research is to develop a solid plan while also improving one’s market and trading psychology. Now, let’s jump right into this write-up’s main topic: how to continue to make money even in unfavorable market conditions (i.e., bear market).
How to make money in the 2022 Crypto Bear Market?
There are different strategies to accumulate and grow wealth during a crypto bear market, and no single method can be said to be the ultimate best. Still, the following lines in this piece will address the proven ways to achieve one’s goal.
SEED INVESTING & INITIAL EXCHANGE/COIN OFFERINGS
One possible way to make money during crypto-bearish markets is to be a Founder or Co-founder of a crypto project. If your project succeeds and pulls more traction, your chances of success will be guaranteed.
Regarding seed funding, it usually involves a relatively small amount of capital or fund that is invested into a potentially successful business. It has more upside than downside. This is also applicable to Initial Coin/Exchange Offerings. If the project develops further and grows enough to attract a substantial number of investors, then early participants will most likely experience a windfall.
DOLLAR-COST AVERAGING (DCA)
This method is primarily effective if done correctly. Through this method, a crypto investor divides the total investment amount into different parts and purchases a target crypto asset at different intervals and a particular prevailing market price. This purchase goes on irrespective until the targetted investment amount is exhausted.
For example, say an investor has $1,000 to spend or invest in total while the price of BTC is $21,000. The $1,000 can be divided into 5 or 10 equal parts at $200 and $100, respectively. It is not mandatory to divide it into equal parts as you can choose to go with $200, $300, or $500 for the 1st, 2nd, and 3rd purchases, but most notably at different prices. Usually, the largest share of the capital is reserved for making purchases at the lowest possible prices.
This strategy helps in the 2022 Crypto bear market
- reducing the impact of price volatility while allowing you to average your investment cost in the long run,
- enforcing discipline to your investment process and keeps you investing a small portion of your money into your favorite crypto tokens or projects.
By doing this successfully, the total unit price for the target asset will be lower than buying them in bulk or all at once.
CRYPTO SAVING & LENDING
While saving and accumulating your favorite crypto assets, you can also lend them out using various lending platforms, and in return, you earn more passive income.
Crypto staking offers crypto holders the opportunity to put their crypto assets to work by earning passive income without the need to sell away their holdings. It is a very profitable way to accumulate wealth during bearish markets. For example, the different projects or wallets offer these services, e.g., the Trust Wallet and the Atomic Wallet. It would also interest you that the Tycoon Platform itself provides an opportunity to investors and holders of TYC (Tycoon’s token) to stake their TYC, and they will be rewarded with more TYC depending on the quantity they intend to stake and, of course how long they plan to stake them for. It can be likened to putting your money in a high-yield savings account.
YIELD FARMING/LIQUIDITY MINING
If you are not yet familiar with DeFi and on-demand platforms, you will struggle to understand Yield Farming and Liquidity Mining concepts. This way, you can earn free crypto tokens by providing liquidity to trading a particular crypto asset(s) through the Decentralized Finance (DeFi) platforms. Doing this will make the asset more liquid or tradeable on the DeFi platform. And such actors are referred to as Liquidity Providers. In Yield Farming, the crypto holder gives his asset to the DeFi platform, which is then used to provide liquidity to the forum. Rewards generally distributed are platform fees or interests collected through the platform from their users.
We have also seen that such could earn actors the right to qualify for future Retrospective Airdrops, just like Uniswap and 1inch, where free airdrop tokens were distributed to old and active users of the platforms.
These can help cover up for losses during the bear markets or provide some cushioning effects.
RESEARCH & LEARNING
You would agree that research and learning can only stop in the grave. As long as one is still alive, learning is continuous, but the pace at which one learns is now an individual factor.
Crypto markets are suitable for research, learning, and building projects with the ultimate aim of solving a problem, improving existing technology, and of course, realizing future wealth.
While researching and doing due diligence on a project, a few things to consider are the project’s technology and IT advancements, including the Blockchain or Network structure. Other essential factors are the project’s philosophy, project team, roadmaps, market value (amount invested), and project partners. To learn more on this, visit Insights!
Copy Trading in 2022 Crypto Bear Market
Another simple, innovative and effective way to be profitable in a crypto-bearish market is Copy trading. This is done by using a safe and reliable platform like the Tycoon.io platform while mimicking the actions of experienced traders who have mastered the art of trading.
On the Tycoon Social Copy Trading platform, you can follow any trader from anywhere in the world. It is quite a time-consuming process trying to learn the art of Crypto trading, but while learning, you can also earn some good profits even as a newbie by using the Tycoon Copy Trading platform.
This trading platform also has its token (i.e., TYC), which may be used towards the payment of trading fees while on the platform, and it is also a suitable project for HODL in the long term. The TYC is multichain (i.e., it can be purchased on the BNB Smart Chain and Ethereum Networks)
The performance of the BNB Coin by Binance has undoubtedly proven the exchange or trading platforms’ coins or tokens are not to be underrated.
The conclusion about the 2022 Crypto Bear Market
So, the best choice in stormy conditions is to stay in the shadow, observe, study, and gain awareness and education.
Overall, don’t be discouraged by market events but see every market condition as an opportunity to reset, learn, explore, re-strategize, and make money. Security measures regarding seed phrases, wallets, exchanges, etc.
Stay in touch with us and learn more about Cryptocurrency news, happenings, and updates as we bring them your way. Please leave your thoughts and comments, and remember to share them with your friends and family.