3 Profit Secrets For A Falling Crypto Market
Crowdability | Feb 08, 2019 01:10AM ET
There’s no sugarcoating it:
The crypto market is dropping like a rock.
And as Matt explained yesterday, even though the fundamentals that underpin cryptos are only getting stronger, this bear market could linger for some time.
But here’s the thing:
You can still make money in a bear market!
In fact, today I’ll show you three proven strategies to earn serious profits — even if the crypto market continues to plummet.
Profit Strategy #1 — Pick Those Cherries
Even though the overall market is down, plenty of individual cryptos are performing well.
For example, since mid-November, the price of Bitcoin has dropped from about $4,400 down to $3,400. That’s a decrease of 22.7%.
But now take a look at a crypto called WAVES during the same time period…
As you can see, WAVES rose from $1.33 to $2.60 in three months, for an increase of 94.5%.
So even in a bear market, you could still “cherry pick” profitable cryptos.
Unfortunately, this is easier said than done. Here’s why…
If you analyze the cryptos that have outperformed the overall market, you’ll discover that they have virtually nothing in common:
They’re from different sectors, their prices increased for different reasons, etc. — in other words, there’s no pattern you can use here to find the next winning trade.
To be successful with this strategy, you’d have to familiarize yourself with hundreds of cryptos so you could identify the ones with the potential to outperform.
Bottom line: sure, theoretically, cherry-picking could lead to profits…
But unless you’re an expert analyst, executing this strategy is highly challenging.
Profit Strategy #2 — Ride the Wave
Now let’s look at another way to make money during this “crypto bear market” — and this one doesn’t require you to analyze hundreds of different cryptos.
Get The News You Want
You see, one of the most important things to remember, regardless of whether it’s a bull market or bear market, is that crypto prices don’t just go up or down…
They often go up and down.
To see what I mean, let’s take a look at that Bitcoin chart again:
As you can see, even though the overall trend is down, along the way, Bitcoin’s price fluctuates greatly. And each of those fluctuations creates a profit opportunity.
For example, as you can see in the chart below, back in December, Bitcoin shot up from $3,200 to over $4,200 in just nine days — a gain of 32.4%.
And in the past 90 days, there were two other opportunities to make 20% or more from this volatility — and it’s same situation with plenty of other cryptos.
But this strategy has drawbacks, too:
Not only does your timing on these trades need to be perfect…
But you also need to spend hours sitting in front of your computer, waiting and waiting for opportunities to present themselves.
As you’ve seen, these are short-term trades…
If you miss the right entry or exit point, all your profits could be erased.
Profit Strategy #3 — Profit from the Dips
But in falling markets like this, there’s also a much simpler way to make money:
You can simply “short” cryptos.
In case you’re not familiar with this concept, “shorting” means betting against an asset.
For example, if you short Bitcoin at $4,000, and then “cover your short” at $3,000, you’d make a $1,000 profit.
You can’t use this strategy with every crypto, but it’s easy to do with Bitcoin. Just short the Bitcoin Investment Trust (NASDAQ: GBTC).
This publicly traded fund mirrors the price of Bitcoin. And since it’s a tradeable fund, you can buy it — or short it — in a typical brokerage account.
However, while this strategy will lead to profits if Bitcoin continues to fall, there’s a big drawback here:
Because Bitcoin’s price can only go so low, your profits from this trade are capped — in other words, your profits get “maxed out” at 100% if Bitcoin ever hits $0.00…
But since Bitcoin’s price could theoretically rise infinitely, your risk is unlimited!
From our perspective, the potential reward just isn’t worth the risk.
Breakthrough Profit Discovery
Thankfully, we recently discovered a better way to profit from the crypto market — regardless of whether it’s going up, or whether it’s going down, down, down.
With this strategy, there’s no need to:
- Track hundreds of individual cryptos.
- Sit in front of your computer all day trying to time the market perfectly.
- And the best part is, your upside potential is unlimited.
And in next Wednesday’s article, Matt will show you exactly how to take advantage of this unique — and highly lucrative — crypto investment strategy.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.