Four Popular Methods to Profit from Cryptocurrency in a Bear Market
With the continuation of Bitcoin’s decline, many traders have postulated that the cryptocurrency space has been teasing the bottom of the bear market. Therefore, predicting when the bear market will bottom out and studying how to profit during the bear market have become the most popular topics of late.
According to data from CoinMarketCap, the price of Bitcoin was around US$30,000 on June 9, a sharp contrast to its all-time high of US$68,789.63 in November last year. In effect, the world’s largest cryptocurrency by market value has had its value fall 57% to US$563.33 billion.
It is a common belief that turning a profit during a bear market is a challenge due to falling asset prices — price increases, if any, seldom last for a prolonged period so traders who chase price increases often get trapped.
It is, however, highly possible to attain healthy profits despite bearish market conditions. Furthermore, learning how to trade wisely amid challenging market conditions would equip traders with knowledge and skills that would benefit their long-term trading prowers.
Read on to find out the various profit-making strategies.
A bear market does not necessarily equate to a falling market, where the price declines in perpetuity. For traders who believe that an asset is likely to fall at some point in the future, shorting the asset might be a good option. The number of venues and ways in which you can short an asset has increased with added attention cryptocurrency has enjoyed in mainstream finance.
Huobi Global, one of the world’s leading digital asset exchanges, has been widely recognized by users for its excellent liquidity and multiple derivatives products. Traders can short a mainstream, NFT, or metaverse asset by opening a short position either with USDT-/Coin-margined futures or USDT-/Coin-swaps.
Selling calls or buying put options is also an effective method if traders estimate that the price is going to fall at some time in the future. Huobi Global announced the rebranding of Huobi Options this January. Similar to traditional option contracts, Huobi Options provides traders with additional hedging and arbitrage opportunities, giving buyers the right to buy or sell an asset at a predetermined price, either before or on a specified date. Traders can use Huobi Options to speculate on future price movements of an underlying asset for income at a much lower cost than the asset itself, or hedge the risk exposure of their existing positions.
Even in a bear market, the markets trade sideways most of the time. Therefore, impressive profits can be obtained when buying low and selling high in a range-bound market. Huobi Global unveiled a grid trading bot recently on its Huobi Global mobile app, enabling investors to capitalize on price volatility in the cryptocurrency market.
The trading bot allows users to place, buy, and sell orders at certain regular intervals above and below the price of a particular asset. Once parameters have been set, the system will automatically execute “buy low” and “sell high” within a set price range. It is therefore possible for users to make profits even if not actively monitoring market prices.
After accessing the Trading Bot function from within the mobile app, users will see the rankings based on PNL and the number of users who follow a particular strategy. Novices can simply ‘Copy’ other users’ strategies while veterans can select the “Customize” to enter the bot’s AI or customize modes.
During periods of continuous market decline, traders have often been advised to wait for a turning point in price should they not wish to sell their assets at a loss. However, if a trader holds mainstream assets such as Bitcoin, Ethereum, and USDT, such a move may not be advised, especially if the trader believes in the long-term potential of such assets. Indeed, to avoid letting funds sit idle, a series of high-yield financial management products for mainstream assets have seen urgent demand from the market.
In order to cater to the need of the crypto assets deposit landscape, Huobi Global introduced PrimeEarn, a crypto-financial management product that focuses on offering high APYs for fixed deposits for mainstream assets. Through participating in Huobi PrimeEarn High-Yield Tuesday events, investors stand to gain up to 30% APY for staking mainstream crypto assets such as BTC, USDT, and ETH for 14 days. Not only does the platform set no cap on the amount that an individual can deposit, the 20% — 30% APY offered for USDT and ETH deposits are the highest in the market today, deeming PrimeEarn an enticing proposal in today’s competitive marketplace.
The total deposit pool accumulated by PrimeEarn in the past month stands at 660 million USDT, and the total interest given out to date has hit 2.5 million USDT. Additional perks for users who participate in group competitions stood as high as 5 million USDT. The previous PrimeEarn event saw all its products sold out within minutes.
🔹4. Token Airdrops
During a bear market, one careless move could lead to huge losses. Airdrops delivered by project parties and centralized exchanges could provide a welcome reprieve to the overarching dismal market sentiment. Such venues, which allow traders to purchase assets with high potential at low-cost listing prices, are excellent wealth opportunities not to be missed.
As a world-leading crypto exchange, Huobi Global is committed to providing investors with access to multiple cutting-edge projects. Launched last year, Huobi Primelist and Huobi CandyDrop are programs that provide unique and swift ways for users to invest in these projects. Primelist allows investors to buy newly listed tokens at their listing price without participating in a project’s initial exchange offering, while Candydrop enables users to win FREE token airdrops.
According to data released by Huobi Global, a total of 2.83 million people participated in the past 100 CandyDrop events, which offered a shared 12.27 million USDT prize pool; of these, more than 772,000 participants successfully obtained airdrop rewards. The events saw three individual users win rewards worth 4,015 USDT based on the highest price at the listing day.
At the end of the day, investors should be aware that a bear market does not necessarily spell all doom and gloom. A variety of innovative products available in the market today can more than assure healthy profits — all that is needed is the right mindset and knowledge about which financial products are aligned with one’s investment strategy.
Risk Reminder: Trading digital assets comes with high risks due to significant price volatility. Please fully understand all the risks and make prudent decisions before trading.