Investing in crypto during a bear market. What do I need to know?

Investing in crypto during a bear market has its advantages. This is how you get around in a stagnant market.

The cryptocurrency industry has proven to be one of the fastest growing industries from the start of the pandemic to today.

Every day more people decide to start investing in cryptocurrencies by opening an account in an exchange or in a virtual wallet. And the number of entrepreneurs investing in the crypto market with their new ideas is increasing day by day.

It is estimated that ten percent of the world’s population has invested in cryptocurrencies globally, approximately one billion people.

Investing in the current market

We are currently in an economic moment of uncertainty at an international level. This is the result of various geopolitical conflicts, wars, energy crises, inflation and now a looming recession in several countries.

Recently, there has been a significant drop in prices in traditional financial markets. This is also reflected in the crypto market.

The most common questions asked by market consumers are, how can we survive the crypto winter? What are the best cryptocurrencies to acquire?

Expert opinion

Renata Rodrigues, Global Community and Education Lead of Paxful says: “We are in a stressful economic time. But this is also an opportunity for companies in the ecosystem to zoom out from the short-term focus and cleanse the ecosystem of projects that put people at higher financial risk. Bitcoin has proven to be a strong alternative financial option and we are committed to its use.”

Nicolas Tang, director of internal communications Phemex, says: “The best altcoins to invest in during bearish conditions are those that are well-established and have stood the test of time. Ethereum is of course an example of a project that has cemented its status and perhaps even grown out of the description of an altcoin. If you choose a newer coin, make sure you do all the necessary due diligence and research. Promising projects have dedicated and talented teams with a long-term vision. Don’t just ask yourself if a project has utility or solves a problem now, but whether it will continue to do so five or ten years from now. Don’t be swayed by fleeting trends or flashy marketing.”

Nicolle Pabello, CEO of Latam Amber Group, says: “Focus on the most important ones, like Bitcoin and Ethereum, from which we have seen enough market validation. At Amber, we believe in building long-term. It is very important for us that our customers understand the natural volatility that comes within the industry. And to prepare for market cycles like the current one where the price dropped drastically.”

Investment in the right projects

The experts from the above exchanges realize that it is a decisive moment where the key is to invest in the most consolidated projects like Bitcoin and Ethereum.

Rodrigo Torres is director of Valor Analitika. “A key aspect to consider is that if the person lives in a country with high inflation or high devaluation. They can analyze the possibility of converting their local currency into a stable coin like USDC. This allows them to have a natural hedge against these problems.”

Investing in Crypto Winter

The crypto winter has greatly affected the crypto market. There is no golden rule or magic solution that gives the average investor immunity from every market downturn. But before you invest, consider these steps.

1. Analyze what type of cryptocurrency I should buy

2. Study the Whitepaper for the project.

3. Research who is behind the project supporting the cryptocurrency.

4. Analyze the market value of the cryptocurrency.

5. Read the graphs and price variations for the last months.

The fundamental pillars of the crypto ecosystem such as decentralization and anonymity have begun to change the traditional economic forms.

As the market value of cryptocurrencies increases, the corrections of the crypto market will mimic the decline and corrections of assets in traditional financial markets.

However, investing in crypto during a market downturn can have benefits that other traditional investments do not offer.

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Disclaimer

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