The Opportunity Of Investing In A Crypto Bear Market

The cryptocurrency market has grown at an exponential pace, surpassing $1 trillion in valuation and making a number of people very rich. Naturally, as with every other segment, the crypto market goes through bearish and bullish cycles. Currently, in a downtrend, there are multiple opportunities for investors who want to buy digital assets at bargain prices. If you have been eager to invest in cryptocurrencies but are hesitant about the sky-high prices, investing during a crypto bear market is the right strategy.

Bitcoin, which hit a high of around $69,000 per token in 2021, has lost more than 30% of its value since then. Other popular cryptocurrencies such as Ethereum and VET have also seen a significant decline. With this in mind, the much-anticipated upgrade of the Ethereum blockchain (known as ‘The Merge’) has slowly been pushing ETH prices up in the past month. Quoted as ‘the most anticipated crypto event in 2022’, the upgrade will see Ethereum strengthen its position as a link between Web3 and regular internet users, leaving room for potential huge price increases.

Bitcoin and other cryptocurrencies have always been prone to experiencing high volatility, so the current downtrend is nothing outside the norm. In 2018, for instance, the price of Bitcoin hit almost $20,000 before it dropped to around $3,300. This was a sharp decline from the previous six-month period. People who bought at the peak of the market then sold their Bitcoin at the bottom, losing a lot. But the smart money were those who decided that investing during a crypto bear market was worth the risk and got a return of around 2,000% along the way.

The Huge Growth Potential of Investing during a Crypto Bear Market

Bitcoin is expected to grow significantly over the next few years due to its various advantages over traditional forms of currency, as a fantastic hedge and store of value.

If we compare Bitcoin’s rate of return with that of S&P 500 stocks, which is the leading indicator of the performance of U.S. equities from the year 2016, there is a clear upwards trend. Say you invested $10,000 at the beginning of 2016 in U.S. stocks, by now your total investment value would be around $12,000. Now say you invested $10,000 into Bitcoin in 2016 on the 11th of January 2016 at the price of $356 you would have turned a $10,000 investment into just over $1.9 million dollars at $69,000 per Bitcoin, at the height of last year’s bull market. And this is just for one cryptocurrency. Some altcoins have produced even larger returns.

The rapid emergence and evolution of the cryptocurrency market are reminiscent of the early days of the Internet. Some even liken the current bear market to the collapse of Dot-com in 2000. Here is where the opportunity lies. An investment in Apple or Microsoft 30 years ago would signify a multi-billion net worth today. And while most investors are priced out of the stocks of Fortune 500 companies, cryptocurrencies are still quite affordable.

It’s Not a Crypto Winter, It’s a Sale

Intense volatility presents the opportunity for outsized gains.

Both crypto and stock investing are widely considered to be smart money. The people investing during a crypto bear market and holding for the long term are the ones who will benefit from the market’s rapid evolution.

According to Bank of America, investors who missed the best days of the market each decade since 1930 would have lost 28% of their returns. On the other hand, those who kept their money in the market would have gained 17,715%. Short-term investors who are prone to buying and selling cryptocurrencies often miss out on the highs of the market.

According to a study conducted by Coindesk, the dollar-cost averaging strategy is a great way for crypto investors to get into the market. It involves contributing the same amount of money at the same time every month or week. Over time, this strategy will allow you to accumulate more coins as the prices of these assets fluctuate.

Just like on the stock market, managing your portfolio with an investment management firm is part of weathering unfavourable market conditions. Markets are cyclical. Eventually, the crypto winter will end, spring will return and you’ll have missed out on the recovery if you don’t get in now.

Animoca Brands’ Mehdi Farooq, a reputable analyst known for his work on various blockchain projects, told Business Insider that the current crypto winter is a great opportunity for investors to build a portfolio that is significantly below its true value. Our very experienced team at Wealth And Loyalty with a combined total of 40 years of investment experience strongly agree that some cryptocurrencies are very undervalued at an excellent discount, we are excited to be buyers!

If you are planning on investing in the cryptocurrency market, follow the same investing strategies that are used in the stock market, think long term and build a portfolio when the prices are low, not when they are going up and everyone is talking about it, as the opportunity has then gone.

For people who are new to investing in cryptocurrency, working with a reputable investment firm, such as us at Wealth And Loyalty, is a far safer alternative to buying crypto directly and managing your portfolio by yourself.