• How do bears make money in crypto?
• What do you do with crypto in a bear market?
• How do you profit from a bearish crypto market?
No market goes up in a straight line. Prices in a market are affected by fluctuations in the business cycle and investor sentiments.
Therefore, although most financial markets move in the upward direction in the long run, there are periods when they go through a Bear phase. The Crypto market also carries on the same principles.
But, most of the investors are active in the Bull phase only, and they go into oblivion as soon as the Bear phase arrives. Therefore, it is also known as the Fear Phase.
The biggest reason is that strategies that work in a Bull phase do not work in a Bear phase. Almost everyone earns in a Bull market; only a few come out as a winner from a Bear market.
So, this post aims to give you some strategies to make money in a Bear market. It is up to you how you use them and come out victorious from a blood-soaked market.
For a quick overview, the following are the best ways to make money in the Crypto Bear Market:
|S. No.||How to Make Money in a Bear Market||Strategy Benefits in a Bear Market|
|1||Buy the Dip with DCA||a) Buy crypto assets at throwaway prices
b) Build Discipline in the investment process
|2||Short-Selling||a) Make money in a downtrend
b) Sell an asset without owning it
|3||Crypto Savings and Lending||a) Earn free crypto tokens
b) Cover up losses caused by the Bear Market
|4||Staking||a) Earn free crypto tokens
b) Cover up losses caused by the Bear Market
c) Avoid panic selling
d) Liquid staking
|5||Yield Farming and Liquidity Mining||a) Earn free crypto tokens
b) Cover up losses caused by the Bear Market
|6||Scalp Trading with Grid Bots||a) The end of the Bear phase is the best time to start a Grid Trading Bot
b) Automate your trading strategies
c) Make money while you sleep
|7||Research||a) Find the next possible 100x crypto gem
b) Upgrade your crypto knowledge
So, let’s dive into each one of them.
Best Ways to Make Profit in the Crypto Bear Market
The top ways to make money in a Crypto Bear Market are as follows:
1. Buy the Dip with Dollar-Cost Averaging (DCA)
The bear phase allows you to accumulate your favorite crypto tokens at a throwaway price. Therefore, it is crucial to invest in this phase compared to a Bull phase when prices are sky-high.
Therefore, Buy the Dip is a common slang for buying whenever the market goes into a bear phase.
Further, you can Buy this Dip either in Lumpsum, i.e., investing all your money at once. Or, there is a better way called Dollar Cost Averaging (DCA), a.k.a. Systematic Investment Plan (SIP).
DCA is a strategy where you buy small quantities of a crypto token over a period of time. So, if you want to invest $100,000 in ETH (Ethereum) Token, then, instead of investing this $100,000 in one go (a.k.a. lumpsum investment), you would divide this investment into several purchases. Let’s say you buy ETH worth $1000 per day over the next 100 days.
This strategy helps you in two ways:
- This decreases the impact of price volatility and allows you to average your investment cost in the long run,
- It brings Discipline to your investment process and keeps investing a small portion of money into your favorite crypto tokens
Further, there are many tools in the crypto market where you can automate this strategy. This means that you don’t need to execute these purchase orders manually. You can simply give instructions to a platform or a trading bot.
You can refer to our List of Best Crypto DCA Bots in the market. Further, you can read our step-by-step Binance Auto-Invest guide to do DCA automatically on Binance.
Short selling is one of the most popular methods of making money in a Bear market or a Downtrend. It’s a trading strategy of selling an asset even when you don’t own it.
Every trading or investment activity has one simple rule. Buy Low and Sell High (BLSH). The only difference in short selling is that you Sell first and Buy later. The expectation is that the price of a crypto token will be lower in the future than its current price.
For example, suppose the ETH token is in a downtrend. Currently, it is trading at $3,000. However, you expect it to go to $2,500. So, you will short sell ETH now, i.e., at $3,000, and buy when the price reaches $2,500. You will earn $500 from this transaction (before transaction cost).
Generally, there are two methods to short-sell a crypto asset in a market:
- Futures Trading, and
- Margin Trading
To explain this in detail, we have separate guides for Short Selling crypto with Binance Futures Trading and Short Selling crypto with Binance Margin Trading. In addition, you can also learn how to Short Sell Bitcoin on ByBit.
Further, if you are new to Margin Trading, then you can start with our Beginners’ Guide to Margin Trading.
3. Crypto Savings and Lending
When your investments are under loss during a bear phase, savings or lending is a good way to earn passive income on your crypto investments.
The benefit of these strategies is that:
- You get a free crypto token just for depositing your assets on a platform or protocol, and
- These free tokens allow you to cover up the losses caused due to the bear market.
Crypto Savings helps you to park your funds and earn interest on them. Many exchanges provide such services. Savings features are available in both centralized and decentralized ecosystems.
In centralized platforms, Binance offers the Binance Savings feature. Amongst decentralized platforms, you can deposit UST (TerraUSD) on Anchor Protocol to earn a stable return.
Not only this, but you can also lend your crypto assets to earn interest on them. You can refer to our Binance Lending Guide to explore more about this. However, lending has a risk of default from a third party which can cause you losses in some cases. Therefore, you should do it on trusted platforms. Further, you should ensure that platform lends only after having sufficient collateral from the borrower.
Few popular crypto lending platforms are as follows:
4. Crypto Staking
Staking is another lucrative means of earning passive rewards on your crypto tokens. You lock your crypto tokens on a platform, and the platform rewards you with more tokens.
The benefits of Staking your crypto-token in a bear phase are as follows:
- You get crypto tokens for free,
- You can cover up your losses caused due to the bear phase, and
- Your funds are locked on a platform, therefore avoiding panic selling
Staking is somewhat similar to earning dividends on your equity stocks. It is a concept used by Proof of Stake (PoS) blockchain networks. You can refer to CoinSutra Staking Guide for Beginners to learn more.
A few examples of these networks are Polkadot (DOT), Terra (LUNA), Cosmos (ATOM), Solana (SOL), Cardano (ADA), Fantom (FTM), Secret (SCRT), and many more.
You can check the base annual Staking Rewards (StakingRewards.com) on these tokens (as of May 9, 2022) as follows:
Let’s take the Solana network as an example. Every time you stake SOL tokens on the Solana Network, it helps make the network securer. As a reward, the network gives you more SOL tokens.
As already discussed, in Staking, your funds are locked on a platform. You don’t have any liquidity while your assets are staked. Liquid Staking provides a solution for that.
Liquid Staking is a concept where you get a derivative token for staking your asset. Lido Finance is the biggest Decentralized Liquid Staking Platform in the market. You can read Lido Finance (LDO) – Fundamental Research Report to know more about Liquid Staking.
Let’s take the same SOL (Solana) example. If you stake SOL tokens on Lido Finance, then you receive stSOL tokens, which is like a receipt of SOL tokens being staked. Now you can use these stSOL tokens in several ways:
- You can either lend them on DeFi (Decentralised Finance) platforms to earn more on them, or
- You can sell them in the open market if you want to liquidate SOL’s position
Therefore, you maintain the liquidity of funds even when they are staked on the platform.
Once you have a hang of what Staking is all about, you can check out our list of most profitable Proof of Stake Cryptocurrencies. Further, you can also watch our Step-by-Step Staking Guides for a few top altcoins as follows:
5. Yield Farming and Liquidity Mining
Yield Farming and Liquidity Mining allows you to earn free crypto tokens for providing liquidity to DeFi (Decentralized Finance) platforms.
Yield farming is a process where a crypto holder gives his asset to a DeFi platform. Thus, because the crypto holder provides liquidity to the platform, they are known as the Liquidity Provider.
In return for this, the platforms reward the Liquidity Provider. These rewards are generally distributed from the platform’s revenue, such as fees or interest collected from the platform users. This concept is known as Yield Farming.
In addition to this, sometimes, the platform distributes or airdrops its native tokens free of cost. This is known as Liquidity Mining.
Let’s understand this with the help of an example. Uniswap is a Decentralised Exchange (DEX). Anyone can deposit their crypto assets into Uniswap Liquidity Pools. In return, Uniswap provides you a share of fees collected by the exchange. This is known as Yield Farming.
In addition to this, Uniswap also airdropped UNI tokens (in-house tokens of Uniswap) in the past. This is called Liquidity Mining.
The benefits of Yield Farming and Liquidity Mining in a bear phase are that:
- You earn free crypto tokens passively
- You can cover up losses caused due to the bear market
For basic information on these topics, you can refer to the following guides:
Further, you can also explore the following guides and tutorials to explore Yield Farming:
6. Scalp Trading with Grid Bots
Automating your trading strategies is one of the best ways to make money in the crypto market. Grid Bots allows you to automate scalp trading strategies. It enables you to make money from crypto even when you sleep.
The last phase of a bear market, when the market shows a reversal towards an uptrend, is the best time to initiate a Grid Trading Bot.
As you would already know, cryptocurrencies are the most volatile assets at the moment. Through a Grid Bot, you utilize this volatility to make money.
In a grid bot, you set a price range. Let’s say for ETH (Ethereum) Tokens; you set a price range of $2,500 to $3,500. Now you will divide this range into several grids, let’s say ten grids. So, the grid levels would be like $2,500, $2,600, $2,700 ……… $3,400, $3,500.
Till the time price of ETH remains in this range, you will be making money. The bot will continuously buy and sell at each price level. Thus, savings the hassle of executing transactions manually.
We have been testing these Bot Strategies for a few years now. A trader can easily earn somewhere between 0.5% – 1% per day (15% – 30% per month) from these Grid Bots.
You can start your Crypto Bot journey with our Beginners’ Guide on Crypto Bots. You can also refer to our list of Best Crypto Trading Bots.
Once you decide that you seriously want to learn everything about Grid Bot Trading, then we have a Comprehensive Grid Bot Trading Course on VIP.CoinSutra. With this course, you will not only learn the nuances of a Grid Bot, but you will also get access to the CoinSutra VIP community, where we share our top Grid Bot pairs and their profits on a real-time basis.
You can see screenshots of the profits earned by some of our community members who are minting money with Grid Bots.
7. Research and Learn
A bear market is the best time to upgrade your crypto knowledge. It is the time when there is not much action in the market. Thus, you can focus your energy on learning about new concepts or projects.
This is where CoinSutra comes in handy. We have dozens of FREE videos and blog posts to help you accelerate your crypto learning. This includes the basic concept of cryptocurrencies, tutorials, guides, etc.
Most importantly, you can use this time to find the Next 100X Crypto Gem. Coinsutra publishes project-specific Fundamental Research Reports to help you decide whether a crypto token is investable or not.
CoinSutra VIP users get access to these Fundamental Research Reports at least 30 days before it is published for our regular users. So, in case you want to have that first-mover advantage, then you can sign up for Vip.CoinSutra.
Or else, if you want to explore some of our top FREE Fundamental Research Reports, then they are available as follows:
Conclusion – Top Ways to Make Money in Crypto Bear Market
So, these are the most profitable methods of navigating through a Bear Market. You need not learn all the techniques in the above list. Just pick one and explore it thoroughly.
Further, every method is a separate skill in itself. So don’t rush yourself into the process and take things at their own pace.
Can you make money in a bear market?
Money is made in every market conditions. The only thing that changes is the strategies which you will implement, and something you should pick wisely.
Please note that this post is for educational purposes only. Nothing said in the article is investment or trading advice. Please DYOR (Do Your Own Research) or consult your investment advisor before making any investment or trading decision.
That’s it for this post. Please share your feedback in the comments section. Further, subscribe to CoinSutra Newsletter to get your free trading e-book.
Kalki is a seasoned content writer with over two years of experience writing about blockchain and Cryptocurrencies. His passion for Bitcoin and cryptocurrencies bloomed in late 2019. Crypto’s technological and economic implications are what interest him most.
He is a Chartered Accountant and Lawyer with over 10 years of experience in the FinTech industry. He likes to read, travel and go for long rides on his bullet bike.