Sleep Like A Baby - Riding the Bear Market

Investing in crypto is VERY high risk. It is a new and not fully proven technology in many areas plus there are many scammers around every corner. To make things more challenging, we are now entering a new bear market.

Last week we saw the implosion of a Top 10 crypto and the accompanying stable coin. Sadly we saw that many people were overly exposed and did not want to continue living afterwards.

We have been in a technical bear market since the Bitcoin ATH in November last year and as of my writing, we are -57% off the ATH. With the blue chips suffering so much, the alts are getting pummelled. Now we need to make sure we can stay in the game and prepare for the next bull run. The moves we make now are critical to ensure we totally hammer it when the next bull run is there.

There is the question, how can we invest in crypto and still sleep like a baby at night?

The easiest and safest way without putting your house on mortgage and getting into Debt is to continue a Dollar Cost Averaging approach into the Blue Chip cryptos. A bear market is not the time to go FOMO on altcoins or unestablished projects because they are cheap. Bear markets will flush out the wrong projects and promote the good ones. Why go through the stress of trying to pick winners and losers when you can ride the bear with great returns on the rebound for blue-chip cryptos?

source

As you can see, a $100 DCA into Bitcoin has provided a >300% return over the last 4 years and has survived previous crypto winters. Now an important factor to consider is to avoid another Luna and preserve your portfolio to see another day. A few careful considerations and using a DCA strategy into the blue chips is the best option out there.

Timing the market
No one is able to time market tops or bottoms. It is a great TV for talking heads and pundits to try and predict this, but in reality, no one knows the tops or bottoms. The saying Time in the market beats timing the market is usually true. It will also save you time, stress, transaction costs and tax if you are not continually going in and out of the market.

High Risk
With the collapse of Luna last week, we saw many people want to get involved. The buzz of trying to catch a falling knife was very tempting because if it had rebounded, it would have brought huge bragging for weeks (if not forever) about the one time they made the right decision and they didn't get rekt.

FOMO=Gambling
DCA'ing into a blue-chip is not as exciting, but it is wealth preserving. If crypto had bad fundamentals when it had a high valuation, then it is still a bad investment when it has a low valuation. That usually means the crowd has realised that this crypto was over-hyped and is reverting to its mean value. Building up your willpower to avoid participating in these things is a good idea. In most cases, you will end up a bagholder and could get rekt. Rekt as in losing money, not having a "good time" rekt.

The final point is to invest only money you can afford to lose and buy DCA a small amount each week or month, you are not stretching your finances which could cause other problems in your life. Having a plan and following it through is making a calculated investment decision, it doesn't mean it will always be right and you will win, but it is investing with logic and can be adjusted as part of your portfolio monitoring.

Maxing your credit card to participate in the latest pump and dump is allowing emotions to control your decision making. This can lead to cash flow problems and even relationship problems if you are making sporadic money decisions where you haven't built up a base.

Stable coins
With the blow-up of UST, Stable coins are looking increasingly unstable. But some of the other coins with audited reserves or Defi algo stable coins could be another option if you want to preserve wealth or reduce volatility.

Cold wallet
Now is the time to get yourself a cold wallet or store your crypto away from the centralised exchanges where you have the keys. No keys=No ownership. The party is great when everything is going up, but when the music stops, we see who went to excess. Who knows which exchanges have hypothecated crypto assets and which ones are overexposed to projects that may fail.

Now is not the time to chase 3-4% returns on your crypto when the house is on fire. Protect your assets so you can ride the next bull run.

This is not investment advice, this is for Infotainment only.

Thanks for reading.