Are we in a bear market? Ever since April 2021, when the price of BSV reached $489.75, it has been on a downtrend and is currently $99.20 as of press time—a roughly 80% decrease from the April 2021 all-time high.
Broader economic conditions, such as the interest rate hike that the Federal Reserve says is coming as early as March 2022 are expected to lead to a stronger U.S. dollar and a move away from risk assets like digital currency and into bonds and interest rate products.
I personally believe that digital currency prices will continue on their downtrend, with a few bounces in between, at least until the first interest rate hike takes place. In other words, I think “number go down” until at least March.
Reducing risk and preserving wealth in a bear market
Fortunately, there are a few Bitcoin (BSV) native apps and services that allow you to make money in a bear market without selling your coins.
In this article, I am going to take a look at two apps—BSaV.io and TDXP—and one emerging wealth preservation strategy—buying NFTs—that allows you to make money and preserve your wealth regardless of BSV decreasing in price.
On BSaV users can earn interest at a rate of 5.11% APY on their BSV deposits, or, users can take out a 0% APR BSV-collateralized loan in BTC.
BSAV.io is one of the best tools you can use in the bear market because it allows you to passively earn income on the BSV you own rather than simply holding your BSV in your wallet and watching its dollar value fall. When you lend BSV on BSAV.io you earn interest that accrues daily.
If you are not interested in lending your BSV, you can use your BSV as collateral for a BTC loan. Taking out a collateralized loan will give you access to a larger number of trading pairs, and give you the ability to easily convert to USD or nearly any stablecoin that exists. In the future, the BSaV team plans to implement USD loans.
BSaV lets BSV users maximize their returns on their BSV stash or use their BSV stash to access liquidity without requiring the user to sell their coins. In a market where prices continue to fall, earning passive income via lending, or converting your crypto to a stablecoin or USD is one of the least risky moves you can make to grow the amount of BSV you have, or prevent the amount of dollars you have from going down, respectively.
In my opinion, TDXP is the best tool or resource you can use to make money in a bear market. This is because TDXP allows you to short equities and digital currencies. If the price of assets is falling and you are short that asset on TDXP, you will make a positive return on your investment in the form of BSV dominated in USD. This means that if you go short, the price of the asset falls, and you close your position while you are “in the money,” then an amount of BSV greater than the amount you initially deposited will enter your wallet.
Even if you are long on digital currencies or equities, TDXP is a tool that allows you to hedge your position and reduce your overall risk.
At times when coins and tokens perform poorly, NFTs typically outperform the underlying blockchain that they were built on. I have a few theories for why this could be the case.
- Unlike the coins and tokens that are traded, NFTs are always dominated in digital currency; this could have a psychological effect on NFT holders that makes them less likely to capitulate because they do not see the dollar value of their NFTs changing on the NFT marketplace.
- NFTs are non-fungible, which makes the market for NFTs less liquid than the market for fungible tokens. This makes it more difficult for market participants to exit their position.
- Community. Owning an NFT is sometimes like owning a membership card to a social club. In this instance, if an individual were to sell their NFT, then they would lose the membership or social status that the NFT gave them. This could serve as an incentive for an individual to hold onto their NFT even if the market looks grim. As a result, there will be fewer sales in the market and less downward pressure on the price of NFTs.
Buying NFTs when market prices are declining is not a surefire way to increase the amount of BSV you own or preserve your wealth. It is also the riskiest move that you can make out of the three strategies discussed in this article, however, if the NFT project at hand is authentic and has a strong community around it, the “buy NFTs” strategy could be the most prosperous strategy of the three—high risk, high reward.
Now is the time to reduce risk!
There are many ways to survive a bear market, hopefully, the three strategies discussed in this article can help you reduce the amount of risk in your portfolio while making some money in the process. None of these strategies are 100% guaranteed to help you make money; however, the two apps and one strategy discussed in this article can serve as useful tools and resources that either shield you from the downside in the market, or act as the wind in your sail that leads you to profit.
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