- According to Davis, one of the ways to survive and thrive in this bear market is to make use of yield farming.
- Apart from yield farming, investors can take advantage of crypto lending.
Lark Davis, a crypto expert, and YouTuber has in a recent video hinted a way out for crypto investors to survive in the ongoing market pullback. In a video captioned “Crypto Winter – A Plan for Surviving and Thriving,” Davis admitted that the current market situation has created a lot of pessimism and fear. However, he still holds onto the prediction that most cryptos will see new all-time highs in 2022 as many catalysts are emerging. It is, however, interesting to note that Bitcoin is not even close to the 200-day moving average.
In the video, he mentioned several ways to still thrive in this harsh bear market.
Yield Farming
According to Davis, one of the ways to survive and thrive in this bear market is to make use of yield farming. This basically has to do with putting some assets into the decentralized finance apps to get free tokens.
My favorite farm is Convex. I have been farming CVX and CRV tokens. I am bullish on these Defi platforms.
He also mentioned that he has been farming and engaging in a lot of metaverse and gaming coins.
Lending
Apart from yield farming, investors can take advantage of crypto lending.
You don’t have an impermanent loss risk, however, the platforms can always get hacked. This is a major downside and a huge problem as they are custodians of your asset. I am using Celsius to lend my Bitcoin, Ethereum, USDC, and polygon. It is simple and safe.
Davis mentioned that investors can just deposit Bitcoin and get paid in BTC every week, or can decide to deposit Ethereum and get paid in ETH.
Gem Hunting
Hunting out gems is a very productive avenue to earn cryptos. This is very important at this moment as top cryptos are down by 50 or 60 percent. This means this is the best time to venture.
It is, however, important not to go all in. Invest an amount you can afford to lose.
Stock
Diversification is a very important risk minimization strategy. According to Davis, so much is going on in the world and one of them is trying stocks. Most stocks directly correlate with crypto, and so it is important to invest in stocks that are quite boring or uncorrelated to crypto to get them in a safer position when other assets run down in the portfolio.
Cash
It is very important to have cash positions in any market condition.
When the market gets down and you need cash for an emergency, you may be tempted to sell your Bitcoin, and by the time you decide to get back into the market, then you are about 300 percent left behind.
This calls for the need to have a cash fund that can be used for emergencies.
Buying the dip
Davis concluded that some of the companies are going to fail or go back to zero, and investors may lose some coins.
Depending on your jurisdiction, you may use the loss to upset your tax burden on the gains you make.
It is not all the time investors are supposed to take profits. It is also important to accumulate more in this period.
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