Smart Investments in a Bearish Crypto Market: Questions for Investors

When I experience cryptocurrency bear markets, they tend to significantly reduce the value of my portfolio. For some, it’s quite frustrating because these bear markets have a tendency to persist for longer periods than anticipated. 

These market-wide pullbacks do have some advantages, though. They can provide me with an opportunity to refocus my efforts and dedicate time to thoroughly researching projects that have the potential to flourish once the trend reverses and becomes bullish again. This period allows me to explore and identify promising investments that may yield substantial returns in the future.

As someone who has been involved in the crypto space for some time now, allow me to share with you some of the questions I must ask myself for before investing in cryptocurrencies during a bear market.

What does the existence of a project have to do with its potential?

In the crypto space, wild assertions and dubious tactics are everywhere. When it comes down to it, though, very few initiatives have been successful in creating something that is genuinely wanted and valuable.

Now, when I'm deciding whether to hold onto a token, one of the key questions that pops up is, "Why does this project even exist?

If I can't find a simple answer to that question or if the solutions offered by the protocol don't truly solve an important problem, there's a strong likelihood that the project won't gain the long-term adoption it needs to survive.

How does the protocol compare to other projects that address the same problem?

When there's a viable use case at hand, I make sure to evaluate how the protocol stacks up against other projects tackling the same issue.

I also ask myself with questions like , "Does it deliver a better or simpler solution than the other solutions it offers? Does it provide anything new, or is it only another redundant protocol?"

Take, for instance, the oracle sector in the market. Over the past three years, we've witnessed the launch of several protocols in this area, resulting in unnecessary redundancy. Despite the increasing number of options available, Chainlink, the oldest and most widely integrated oracle solution, stands as the strongest contender in the field.

What should be considered if a team shows minimal activity as roadmap deadlines approach?

When it comes to evaluating a project, I understand that past performance doesn't necessarily predict future results. However, looking at a project's track record of sticking to its roadmap and meeting important deadlines can provide valuable insights into its its ability to persist during trying circumstances.

Besides monitoring roadmap milestones, I find sites like Coinpriceprediction and CryptoList to be quite helpful. They give me a glimpse behind the scenes, revealing the frequency of development and developer activity for a protocol.

If I notice that a team shows minimal activity or no signs of progress as roadmap deadlines approach, it's essential to consider the possibility that a slow rug pull might be taking place. In such cases, it's wise to contemplate exiting the investment to avoid further losses.

Closing Thoughts

In a world full of uncertainties like the crypto space, we must always be well aware of the crypto we want to invest in. Although investing during a bear market can be quite challenging, it also holds the potential for great rewards.

Keep in mind that by being informed, making adjustments to our investment strategy, and exercising discipline, we may be in a position to benefit in the long run from a bear market.

Thank you all for taking the time to read this! I hope you found the information valuable and insightful. If you enjoyed what you read, I would greatly appreciate a clap. Your support means a lot to me!

If you have any thoughts, questions, or suggestions, please feel free to leave a comment below.