The Brief Respite and The Coming Storm

After a brief respite, it seems that the market is poised for another bear period again. This CNBC article cites the Ukraine/Russian tensions and expected Interest Rate hikes in March as possible reasons for a bearish outlook. The past weeks of earnings season was a brief respite and distraction (unless you're a Meta shareholder lol) as some companies (eg Google) posted spectacular profits. But the long term market trend is uncertain at best, given the Ukraine/Russian tensions, interest rate increases, staggering inflation numbers and higher oil prices. The cryptocurrency market broadly followed the trends of the stock markets in the past weeks and started to show signs of weakness again over the weekend. 

So how does one navigate these choppy waters? This article will contain my thoughts and the moves I plan to make over the next few weeks.

Tactic #1: Inverse ETFs / Put Options

Given the negative market outlook, it is likely that markets will be negative over the next few weeks. This would mean a rise in value for inverse ETFs and Puts on the market. Investing in these instruments might allow you to make a profit as the market declines. Examples of inverse ETFs can be found here. Personally i prefer inverse ETFs as they dont require me to use a margin account. 

Tactic #2: Earning Interest on Your Crypto

Earning interest on your crypto could be a strong hedge against a market downturn. These platforms tend to pay out high interest rates (rates vary with the coin that you deposit). In my opinion, the safest way to utilize these platforms would be to deposit and Earn on a stablecoin (Stablecoins pegged to the USD tend to get about 8% on most platforms). 

A slightly risker way to make use of Earn features would be to consistently accumulate your preferred cryptocurrency while earning interest rates on these coins at the same time (and depositing them to earn more interest + compounding your interest gains). Investors might believe that this is a good time to "buy the dip" and decide to take this chance to accumulate coins while Earning interest rates on these coins during this time. While the market could continue to fall even after your purchase, a constant DCA strategy paired with high interest rates would likely see you make big gains once the market picks up. Personally, this is the strategy I will be utilising for the next 3-6 months. 

If you are looking for a reliable / good Earn platform, consider signing up on Celsius. They have one of the highest interest rates in the industry with interest rates of up to 17.5%!   

Join Celsius Network using my referral code 100977acb4 when signing up and earn $50 in BTC with your first transfer of $400 or more! Or click on this link to get started: https://celsiusnetwork.app.link/100977acb4

Quick note on staking: While higher interest rates might be earned from staking in some cases, bear in mind that there is usually a staking period involved. This might make you unable to react during periods of high prices when you wish to sell your gains. So bear this in mind when staking. 

Tactic #3: Trading Oil

Russia is one of the worlds top producers of oil - guess who is also at the center of the Ukraine standoff? Russia is one of three countries in the world - the [others are] Saudi and the U.S- that each provide 10% of the world's oil. Of the oil that Russia produces, about half goes into the European market via pipeline. Any further escalation in the Ukraine conflict might have an adverse impact on oil prices due to scarcity. Already we are seeing an upward trend in oil prices.

It is unlikely that oil prices will drop during the Ukraine conflict, so a good bet if youre a commodity trader would be to consider investing in oil.

Concluding thoughts: 

Out of the 3 options, my preferred one would be Earning Interest on my crypto. Not only are the returns astoundingly high, the risk is relatively low (unless an unlikely event like a hack occurs). The returns are consistent (which tends to beat trying to time the market) and there is a chance to compound your earnings if your crypto prices rise.