The term, ‘Bear Market’ goes way back into the early years of the New York Stock Exchange. In its simple entirety, related to the cryptocurrency market; bear market is a period in time in which cryptocurrency values prices are constantly falling. You can also consider a bear market to be a time period in which investors lose confidence on the prospect of a crypto asset. The term ‘bear’ is not a farfetched word, it is coined from the characteristic of a bear when it is attacking. The counterpart of a bear market is a bull market which is a market that is constantly on the rise. From expert analysis, it is clear that whenever there is a drop in an investor’s confidence in a crypto asset, it will likewise set the ball rolling for a bear market. But this should not make you panic, it is totally uncalled for, because from history, all things being equal, there are golden opportunities even in a bear market. You just have to keep your eyes and ears open.
It is a norm in the cryptocurrency market for there to be bear markets and bull markets, but the tuth is no investor will wish for a bear market. But then again, bear markets are part of the whole process. So it should not be a surprise to you in the cryptocurrency market, which is why you must be armed and ready like a solider going for war, if you must survive it. So, how do you stay through these times?
The Long and Short Term Goals
Cryptocurrencies investment is not a get rich quick scheme. It is just like every other investment scheme – just that it is more volatile. Therefore, it is pertinent that you have a definition of why you are investing. Are you in for long or short term? Most cryptocurrency assets have the tendencies of nose diving, thereby making them cheaper to purchase. And most times, when the prices of such stocks begin to look up and increase, you get to make tremendous profit. Without well-defined goals, chances are you will chicken out when prices of an asset takes a bear path.
Finding the right cryptocurrency asset
Most times the only thing that will keep you going in a cryptocurrency bear market is the fact the information and confidence you have on your crypto investment. For example, the bear market that Bitcoin experienced in 2018 had many of its investors believing that it will rise again. One of the main reason why they believed so was because Bitcoin is unarguably the king of cryptocurrencies. So an end to Bitcoin would in theoretical sense be the end of cryptocurrencies. The same thing held for Etherum, most of its investors believed still that the features of Etherum will make it stand out.
So as an investor, you have to do your research and know the ‘why’ of why you are investing in a particular coin, making sure that it is not just because of the monetary prospect that is making you invest.
Diversify your Portfolio
The market is a risky one. But what is more risky is putting all your eggs in one basket. Although most cryptocurrencies are pegged together in terms of market prices, there are still some top players in the industry whose prices in value are not affected by others. Diversification is a good way to survive bear market.
Yes, in the stock market and foreign exchange market, investors use the services of professionals. The fact that the cryptocurrency market is flexible and can be accessed by anybody with money and internet does not mean that you don’t need professionals – especially during the period of bear market. This is essential because it will save you from making miscalculated investments simply because you are under pressure and economic duress.
Learn to maintain your composure
More like; keep your calm! Agreed, the weight of a bear market can be quite heavy and hell, it seems unbearable most times. But losing your composure won’t solve anything. So you just have to take the bear by the horn – literarily. You must remain calm and be in control of the situation, study the market and think of the possible outcomes. Remember, the bear market is a part and parcel of the investment market.