Crypto Investing in a Bear Market

Bear markets are scary but they turn out to be great investment opportunities too, especially if you're cautious about moves.

By Rohas Nagpal | Updated: 7 June 2022 13:57 IST

Photo Credit: Unsplash/ Anne Nygård

During bear markets, supply is greater than demand, confidence is low, and prices are on a downtrend

People began talking about another crypto winter in January, when falling prices had wiped out $1 trillion (roughly Rs. 77,69,223 crore) in value from November's peak. Prices rallied back in March, restoring some of the losses. But we are in the midst of a massive crypto crash yet again and while that means that a majority of first-time retail investors aren't convinced if crypto is a right investment, there are ways to begin a portfolio now, without having to run the risk of losing big.

To begin with, here's how much the top cryptos are down as compared to their all-time highs.

Bitcoin is down 58 percent
Ether is down 62 percent
BNB is down 55 percent
Cardano is down 84 percent
Solana is down 83 percent
Dogecoin is down 89 percent
Polkadot is down 83 percent

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So what should a new investor do?

If I was just starting out with crypto and had a zero budget, I would earn free cryptos. There are 2 ways of doing this:

1. Airdrops

New crypto startups use airdrops as a marketing strategy. They give free cryptos in return for promoting their website and social media accounts. You can get a list of the latest airdrops from coinmarketcap.com and airdropalert.com.

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2. XXX and Earn programs

Many cryptos run small courses to build awareness about their project. You need to watch a small video and take a small quiz and you get free cryptos. This is called Learn and Earn. You can also earn free cryptos by playing online games (play-to-earn) or even by walking (move-to-earn).

Once you decide to take things to the next level, you should focus on unlisted strong projects with solid prospects. But how should you evaluate a new crypto project?

Use the ROHAS method - Revenue, Organisation, History, Algorithm, and Social.

Revenue

Understand and analyse how the project generates revenues for the ecosystem and what is the global economic impact of the project? This information can be obtained from the official website and whitepaper of the project.

Organisation

The organisation/ team (founders, dev, business) must be highly-skilled and respected with strong prior experience, strong credibility, and positive social media status. This information can be obtained from the LinkedIn profiles of the team members.

History

The project must have shown strong growth in the number and transactions of active users.

Algorithm

The consensus mechanism and technology platform must be robust. This information can be obtained by an analysis of the project's GitHub repositories.

Social

The project must have a large, vibrant, active, engaged, positive community with a fair share of fanatics. The major social platforms are Discord, Facebook, Instagram, LinkedIn, Medium, Reddit, Telegram, Twitter, and YouTube.

Rohas Nagpal is the author of the Future Money Playbook and Chief Blockchain Architect at the Wrapped Asset Project. He is also an amateur boxer and a retired hacker. You can follow him on LinkedIn.

Will crypto tax hurt the industry in India? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.

Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.

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