We said there would be blood, and there you have it! It’s not uncommon for Bitcoin to take a leave, but boy… the timing couldn’t be worse.
- Red candles are opportunities for higher returns
- Projects with strong fundamentals tend to stand the test of time
- NFTs are not such a bad idea after all, whatever Ran says
Q1 2022 is the moment of truth because Bitcoin’s been struggling for a while. The Federal Open Market Committee (FOMC) confirmed what we already know about tapering, and Bitcoin’s really thinking of taking a nap, and for good reasons! We’re not calling it a bear market just yet, but Bitcoin hasn’t done much in almost two months!
We might not be under fire for long. Nancy Pelosi gave us a good indicator when she bought the stock market dip. Now, all we need to confirm a bullish Q2 is the CEO of El Salvador buying the dip, and we’re set – Psych!
In all seriousness, funds can’t stay on the sidelines forever, and fund managers who’ve pulled out of their positions will need to redistribute the money at some point. As discussed in the Crypto Banter show, why would an investor pay a management fee when fund managers don’t generate any profits? There is still money in the market, and we might see some movement by the end of Q1 2022.
Unfortunately, not every project can survive a mini bear cycle. This is not “No Crypto Project Gets Left Behind”. This is “Blockchain War”. All right, so maybe I went too far. But as we like to emphasize, fundamentals always outperform hype.
Knowing you didn’t panic sell today, right ANON, you can follow these strategies for the current market situation:
Banter’s 5-Step Strategy
1. Create a buying list
Smart money is generated during periods of fear, when the market is down. First and foremost, create a shopping list with the tokens you want in your portfolio. Write it down, put it on a wall, you know what to do. The shopping list includes the top 10 tokens you want to own. It’s like your DEGEN bible.
Use the Dollar-Cost Average (DCA) strategy to set buying orders because in a highly volatile market, the dollar-cost average is your best friend. Sure, you catch some all-time highs, but you also catch them at a BIG discount. Thus, you’re actually playing and beating crypto at its own game.
2. Switch out to stronger altcoins
Ask yourself: Is every single one of my coins going to survive a bear market? Look at the data. 80% of the 2017 ICO projects were a scam. Even if a coin has strong fundamentals – as in, it’s the Lambo of crypto projects – what are the chances the project is going to make it, given there will be lower demand and emphasis during a bear market?
If that was a crypto-cold shower, let’s get to the good part. You can do the old switcheroo early and invest in strong projects – you know them. When the market goes down, almost every token is down the same percent. Thus, switching tokens renders a similar amount, and switching early to safer tokens avoids further losses. That’s the beauty of it, Fren. Crypto is a hype cycle. Games and memes will come and go, but infrastructure or blue-chip tokens will be there forever.
3. Get the best stablecoin yields
Suppose you’re the lucky one who sold before the dip. Congrats, we may call you master sensei trader. Yields on stablecoins are not as rewarding, but they are risk-free. A 10% annual percentage yield (APY) or even more doesn’t sound that bad when every other volatility asset has suffered impermanent loss—high five Bitcoin.
With more protocols available, including Polkadot, Solana, and Fantom – which we discussed just two days ago – the potential to maximize your returns grows from 10% to even 14%. It’s not a super sexy strategy, but it helps maintain balance in your portfolio when your risky strategies are not printing moooooneyyy.
4. Stake your tokens
Crypto gives you countless ways of generating revenue, without lifting as much as a finger. It’s like money grows on trees. Once you switch into tokens that have long-lasting value, STAKE THEM. We can’t emphasize that enough.
The upside is that you’re generating free money, through APY, airdrops and possibly even getting a higher APY because people took out profits. Good quality coins will pay out dividends once the market recovers and they reach a new all-time high.
5. Invest in non-binary projects
The key to bouncing back into profit after a down period is to pick projects that have more intrinsic value than projects with a single use-case, like NFTs. Decentralized exchange tokens on distinct protocols have more value than pump coins that were promoted by X influencers. When the market flips bullish and breaks the downtrends, you want to be caught holding the good apples, not the rotten ones.
Well, well well… Bitcoin’s in with another wake-up call, and all we can now do is to find a way out of the hole we dug for ourselves. If you’re doing that, STOP. Seriously, panicking is only going to hurt your portfolio.
Instead, acknowledge what has happened, and follow a strategy. Create a shopping list (really – write it down somewhere!) of all the tokens you believe will beat the bears and will emerge from the crypto winter. Focus on infrastructure projects that sustain the crypto ecosystem. The bright side of a market slump is that you can go on a shopping spree and be in the best position when the market recovers… but ALWAYS INVEST IN FUNDAMENTALS!
During the Crypto Banter Show today, Ran said non-fungible tokens (NFTs) will lose their value when the market takes a downturn. I’m here to counter that.
Hear me out.
NFTs exploded in 2021; until then, their use-case had faded. August saw a lot of people join the NFT momentum simply because Bitcoin and altcoins were at an absolute low. In Q3 2021, NFT sales increased by 706% to a total of US$10.7 billion; Bitcoin was trading between $30k and $43k.
I’m not saying there is a direct correlation, but when Bitcoin and crypto don’t yield returns, users turn to other products like JPEGS, which have their own market. Crypto is cyclical, and NFTs, DeFi, and Alt-plays have their course.
NFT volumes are increasing steadily, while Bitcoin is hovering around the $47k mark. NFT sales in 2022 registered their third-highest recorded daily sales, JUST SAYIN… So it’s worth keeping an eye out on the development. Right, Ran?