The other day, I was with a few friends and one of them brought up that I did Crypto. The other immediately made a snarky comment, “So how much are you down from your all time high?” Little did he know that I’m actually 300% up from my all time high in January. I never tethered up and I never sold the top. I crashed along with everyone else. In fact at the time of the crash, I was 100% diversified into altcoins (27 of them at one point). In the past few months, I’ve entirely reinvented the way I invest in these markets.
How to make money in a bear market:
1. Find actual catalysts:
There are two major mistakes people make. First, people forget to sell the news every single time. It doesn’t matter how good you think the announcement is. You have to sell before the news drops. This doesn’t apply if the news drops randomly and is unpredictable. There is no predictability when for example, Binance lists a coin. Unannounced news will pump the price. However, we know that nowadays people like to do announcements of announcements. If a crypto announces a specific date for an announcement, partnership, or mainnet launch, always sell around 2 days before the date.
Second, certain catalysts are not actual price catalysts. Stuff that creates price movement includes: price discovery, masternode details, trading competitions, exchange listings, coin burns, airdrop snapshot and a few more. The biggest misconception in crypto is that mainnet launches pump coins. They do not because a mainnet launch means nothing in the grand scheme of things. People release apps and platforms all the time but they have zero intrinsic value if there is no adoption. Adoption is always key. That’s why partnerships are more exciting than actual mainnet launches.
2. Holding and diversifying is a meme:
In a bear market, altcoins really get slaughtered against Bitcoin. Holders become impatient when there is no news for weeks and people feel more secure holding blue chips when things get red. Also, there is no diversification when the entire market moves together in both directions. The more you are diversified, the harder it is the keep track of your investments. You should be spending at least 30 minutes in each of your coins’ telegrams every day. This may seem excessive and may not apply to long-term holders, but this is advice on how to make money in a bear market.
3. New microcaps are your friend (price discovery is the best catalyst):
Price discovery is by far the best and most predictable catalyst. I would define it as a project’s potential investor pool expanding and the market cap rising until it reaches a proper valuation. Many new coins tank because they’re overhyped in ICO and open with inflated valuations. ICO and private sale investors take profits and the price drops. On the other hand, there are some coins that are completely unknown in the ICO-phase. Some coins are completely funded by VC’s and some are just under the radar because they’re not covered by influencers in the West.
Most of my best trades were from new microcaps that went through price discovery. Key point is that it has to be new! Old coins that never gained traction have plenty of dirt that can be dug up. Old coins that tanked from all time highs have damaged investor confidence. My best trades were Origami Network, Daneel, UNetwork, Banyan Network, and Silent Notary. The ones I missed out on include Hydrogen and Content Neutrality Network. I’m sure there are more microcaps I’m forgetting to mention (many on HitBTC which I don’t recommend anyone using). However, I don’t worry about what I miss. I just make sure I have at least 75% precision when I do choose something.
What do all these microcaps have in common?
- Not listed on CoinMarketCap
- Very small community upon discovery (fake telegram airdrop bots don’t count)
- Market cap of 1–3 million upon discovery
- Some combination of a good name, logo and website
- At least a decent concept (I stay away from almost all dapps)
- Big name advisory team
- Big name partnerships
- Big name investors
- All-stars on team
4. Attend conferences:
Attending conferences is paramount in understanding which projects are the cream of the crop. When you are sitting on the computer researching, you don’t get an exact idea of which teams are truly great at presenting their project. Development is only half the battle. Adoption is the rest. When you’re there in person, you see which projects are having the most success networking with institutional investors and potential partners. You see which projects have the most crowded booths. You also discover new projects before anyone else. For example, I first found out about U Network at the first Blockchain Connect Conference in January (there’s a 2nd one coming at the end of June). It proceeded to do over 4x in a bear market.