I am about as bullish as a person can possibly be about bitcoin's future, but that doesn't mean there won't be speed bumps and rough patches before we can reach that moon landing target of ours. We have to be honest and admit that bitcoin isn't in the spot price-wise that many of had expected that we would be entering May 2022. While I contend that with everything that bitcoin has had to fight against, and to still be hovering around a price point of $40k is an incredibly bullish thing. A few years ago, who would have ever thought that people would be declaring bitcoin doom and gloom stories with it dropping down to $40k. Keep in mind that it was at $3,400 in March of 2020.
With all of that said however, there is no denying that the last several months have not gone as we hoped. With the price of bitcoin chopping sideways in a manner where it was more common for the price to dip lower than higher. We have gone from a high of $69k during November of last year, to $39k. If you have a long enough timeframe for bitcoin, this short-term price action shouldn't worry you in the slightest. Actually, it should make you excited that you once again have the opportunity to accumulate bitcoin at a cheaper price.
But what if bitcoin has entered a bear market? What should bitcoiners do during this time to not only survive, but set themselves up to thrive in the future?
Without further delay, let's dig into this important topic.
The first thing that you always need to be aware of while you are investing into the bitcoin and cryptocurrency markets is that the market sentiment can change in an instant. One minute we could be feeling emotions of hopium, and that we will definitely be going to a bitcoin price of $400k. And then the next minute bitcoin's price could have dropped thousands of dollars, and our future includes nothing but doom. Going from a bull market to a bear market can happen as quickly as that, its just that most people don't realize it. That's because they often are too stuck in their opinions and aren't open to the facts and information that is being presented to them. To be successful with bitcoin and crypto we need to continue to have an open mind, be nimble, and adjust as the market is changing. If you are able to do that, you will already be on track to have success in this industry.
Continue To Buy
There are many people who will try to perfectly time the bottom of the market. Hoping to set aside a large amount of cash, and buy bitcoin perfect at that exact bottom price. If you're able to do that, it could be a life-altering moment for your financial future. Unfortunately, I don't trust myself to have that type of great timing. Instead, I continue to buy more and more and the price drops. The hope is to lower my average purchase price that I have paid for bitcoin. Naturally, because it may be a bear market. It is very possible that prices could continue to drop even after purchasing your bitcoin or crypto. That is called trying to catch a dropping knife. This is where putting time in and researching the market becomes so vital. If you invest in a great crypto asset like bitcoin, odds are great that eventually its price will recover and even greatly surpass previous highs. Making it a great opportunity to build your portfolio. For those who invest with the dollar-cost-averaging method, you can keep doing what you have always done. Although, during the bear markets, I like to put even more money into the market. A lot of the hype in the market will always be when the prices are coins are surging upwards during the bull market, and that is when many people will FOMO in. By that time, it is already too late to make a large portion of the gains. The real money is made during bear markets when prices are suffering. It is the best time to build your portfolio. You put in the hard work during the bear market so that you can fully enjoy the bull markets.
Making Passive Income
Many of you know that I am a big fan of making passive income by lending out portions of my bitcoin. The problem with this is that I'm from the USA, and recently many of the largest lending services have stopped accepting new deposits from Americans to earn interest on. Not only that, but interest rates have been dramatically decreasing all across the industry. Almost to the point, where I have begun debating if it is even worth the risk to lend out my treasured bitcoin, for the measly interest that is given out to users who have a larger amount of bitcoin. Would it possibly be better to just send my bitcoin to cold storage and wait out the storm that is the bear market. The situation may be a little different if you are not an American. But if you are like me and already have some crypto on lending services what should you do? This is what I decided to do. I have long ago withdrawn my funds from Blockfi, and have recently taken my bitcoin off of Celsius. The rates were lowered to an amount that the rewards just didn't match the risk that I was willing to take on. There were much better opportunities else where. For the time being I am keeping a good amount of crypto on FTX, where I can earn 8% on my first $10,000 worth of crypto, and the 5% on everything after that. I also am continuing to keep bitcoin on both Ledn and Nexo for the time being. Beyond what I mentioned above, there are still other opportunities to make your bitcoin work for you and earn a passive income. Such as lending on exchanges such as KuCoin, and also being a liquidity provider on DEXs. One thing is for certain, and that is making a passive income with bitcoin has become much less passive if you want to maximize your earnings. You need to keep up to date with everything that is happening in the industry and find what is best for you.
Taking Care of Yourself
Something is incredibly underrated in this market is actually taking care of yourself. This market can be an extremely tiring and stressful place if you let it be. As you can see during the last few months, during bearish times, the price of bitcoin can often become boring. If you have become quite stressed or burned out from this market, there is no harm in just taking a step back, and taking a much need break. You don't want to be the person who became so stressed-out from this industry that you sold out of bitcoin, an asset that could change your life if you would just had the conviction to hold onto it for a few more years.
As for me, I'm trying to not only accumulate greatly while the prices are low, but also becoming more knowledgable in the crypto space. During bullish times, it is almost impossible to keep up with everything that is happening in the market. Now is my chance to learn about new projects, and improve your skills by experimenting. Learn how to use decentralized DEXs, and do Layer 1 to layer 2 chain swaps. Experiment with performing bitcoin transactions on lightning and consider running your own node. Search out the best places to stake your coins, and and the best lending services that fit your needs. Finally purchase a Ledger, and learn how to take custody of your own coins. Or if you are a crypto writer like me, continue to write and strive for higher goals. Perhaps eventually being able to land a job in the crypto industry.
Make the decisions and moves today, that will give you the best future.
How about you? What are you doing now with bitcoin and crypto to set yourself up in the future?
As always, thank you for reading!