by Chelsea Florence | Aug 5, 2023 | Learn
Introduction:
Bear market cycles are inevitable in the world of finance, including the cryptocurrency market. During these periods, asset prices experience prolonged declines, and investor sentiment turns pessimistic. While bear markets can be challenging and unsettling, they also present unique opportunities for savvy investors to make money and build wealth. In this article, we will explore effective strategies that can help you navigate how to make money in bear market cycles.
Top Strategies on How to Make Money in Bear Market Cycles
1. Short Selling:
Short selling is a popular strategy employed by investors in bear markets. It involves borrowing a cryptocurrency or other asset from a broker and selling it at the current market price with the expectation that its value will decrease. Once the price declines, the investor buys back the asset at a lower price and returns it to the broker, pocketing the difference as profit. Short selling enables investors to profit from falling prices, effectively “selling high and buying low.”
2. Investing in Defensive Assets:
During bear markets, certain assets tend to perform relatively well due to their defensive nature. These assets typically have lower correlation with the broader market and are considered safe-haven investments. Examples include gold, government bonds, and stablecoins. Allocating a portion of your portfolio to defensive assets can help mitigate losses and preserve capital during turbulent market conditions.
3. Dollar-Cost Averaging:
Dollar-cost averaging is a disciplined investment strategy that involves investing a fixed amount of money at regular intervals, regardless of the asset’s price. In a bear market, asset prices are typically lower, enabling investors to accumulate more units of the asset with each fixed investment. Over time, this approach can lead to lower average purchase prices and potentially significant gains when the market eventually recovers.
4. Buy the Dip:
“Buy the dip” is a common mantra among seasoned investors during bear markets. This strategy involves purchasing assets when their prices experience sharp declines, presenting attractive buying opportunities. By strategically buying at lower price points, investors position themselves to benefit from potential price rebounds when market sentiment improves.
5. Value Investing:
Value investing involves identifying assets that are trading at a discount relative to their intrinsic value. During bear markets, many fundamentally strong assets may experience significant price declines due to market sentiment. By conducting thorough research and identifying undervalued assets, value investors can capitalize on the potential for substantial gains when the market sentiment eventually turns positive.
6. Focus on Dividends and Yield:
In bear markets, some stocks and cryptocurrencies may continue to offer attractive dividend yields or staking rewards. Investing in assets that provide a steady income stream can help offset losses from price declines and add a layer of stability to your portfolio.
7. Short-Term Trading:
Short-term trading strategies, such as day trading and swing trading, can be profitable during bear markets. These strategies involve exploiting short-term price fluctuations and market inefficiencies to generate quick profits. However, short-term trading requires in-depth market knowledge, disciplined risk management, and a keen eye for market trends.
8. Diversification:
Diversification remains a crucial strategy, regardless of the market conditions. By spreading your investments across different assets, industries, and geographical regions, you can reduce the impact of a single asset’s poor performance on your overall portfolio. Diversification helps manage risk and can provide a more stable investment experience during bear markets.
Conclusion:
Bear market cycles can be daunting, but they also offer valuable opportunities for investors to capitalize on market downturns and build wealth. Employing strategies such as short selling, investing in defensive assets, dollar-cost averaging, buying the dip, value investing, focusing on dividends and yield, short-term trading, and diversification can help position you for success during bear markets.
Remember that successful investing requires discipline, a long-term perspective, and continuous learning. Staying informed about market trends and being adaptable in your approach will contribute to your ability to navigate bear markets effectively. As with any investment strategy, it is essential to assess your risk tolerance and financial goals before implementing these approaches. By combining prudent risk management with these strategies, you can increase your chances of making money and weathering the storms of bear market cycles with confidence.
by Chelsea Florence | Aug 2, 2023 | Banking
Key Points
- Fitch announced on Tuesday that it was downgrading the US long-term foreign-currency issuer default rating from AAA to AA+.
- The US Credit Score was always on the balance of being revised downwards by Fitch following the 2023 debt ceiling crisis.
- US Stock futures fell sharply following the downgrade, starting a domino effect globally.
US Credit Score has been revised downwards by Fitch from AAA to AA+ following the highly contested debt ceiling crisis despite the US suspending it. Consequently, US, Europe, and Asian stocks are trading much lower on Wednesday.
Fitch downgrades US Credit Score from AAA to AA+
The US debt ceiling crisis threatened global economies as the world’s reserve currency issuer would have stepped into an immediate recession if it were to default on its debt. Analysts expected the US to lose at least 8 million jobs at such an event and be the first time in history that it went that route.
However, Speaker MC Carthy and President Joe Biden agreed to forge a deal that would see Congress suspend the debt ceiling till January 2025, when he gets out of office. This deal, however, did not solve anything, as government spending is still up despite inflation falling sharply to 3% in June.
Since the suspension of the debt ceiling temporarily shielded the US from an imminent downward revision of its debt default scores, government spending is up by over a trillion dollars. This has prompted Fitch to go ahead and lower the US Credit Score to AA+, a move that has yet to be well received by financial officials in the country, including Treasury Secretary Janet Yellen.
Following the news, US stock futures traded sharply lower, a fall of almost 300 points for the Dow Jones Industrial Average at Wednesday’s US market opening. Elsewhere, the Pan-European Stoxx 600 index dropped by 1.6%, with all sectors trading in the red. The Asia-Pacific region also plunged across the board at the same time.
Keep watching Fintech Express for more updates on this and other Fintech Related developments.
by Chelsea Florence | Aug 1, 2023 | Technology
Key Points
- Mark Zuckerberg’s Meta is preparing to have an edge against its competitors by launching AI chatbots with personalities.
- The move is to ensure that the company ‘retains users’ as more competitors grow in the budding industry.
Meta, a social media incorporation company, plans to launch AI chatbots with personalities to retain their user base as competition grows in the budding industry.
Meta takes a step further by developing AI chatbots with personalities
Artificial Intelligence has grown to a whole new level and keeps getting wild developments. As such, AI investors want to introduce new products to edge each other. Mark Zuckerberg’s Meta is rumored to launch AI chatbots with personalities that make them more human-like to retain users.
An August 1st report by Financial Times indicates that people close to the matter have revealed that prototypes of such chatbots are already underway, with final products being able to carry out the discussion at almost a human level.
These chatbots are reportedly scheduled for initial public releases or tests as early as next month and will come with different human-like personalities. The sources disclosed that the chatbots have been dubbed “personas” and will be different characters. A given source even stated that one of the chatbots has voice capabilities and takes after the famous US President Abraham Lincoln. At the same time, another speaks like a surfer and will be giving travel advice.
Some of the bots’ abilities will be offering recommendations and bearing search functionality along with being a “fun product to play with.” These reports come when tech industry stakeholders are moved by the risks associated with Artificial Intelligence. An open forum is already being signed to try and slow down the development of such technologies till fitting regulatory insight and frameworks are in place.
In the EU, the first comprehensive regulatory framework for AI products is already in place, with the US needing to catch up as talks are in place to develop a fitting regulatory framework for the industry. Whether Meta’s “Personas” will follow the few set regulations in the world and be accepted by governments and regulators is time to be seen. Keep watching Fintech Express for more updates on AI and other Tech stories and developments.
by Chelsea Florence | Jul 31, 2023 | Cryptocurrencies
Key Points
- US SEC reportedly asked Coinbase to delist all cryptocurrencies it trades, alleging all cryptos apart from BTC are securities.
- The regulator took the incentive shortly before filing a lawsuit against the exchange, alleging it was acting as an unregulated securities broker.
- The US SEC now believes that over 70 cryptos are securities.
The US SEC now believes that all cryptos apart from BTC are securities, which led it to ask Coinbase to delist them before filing a lawsuit against the exchange in June 2023, per a statement by CEO Brian Armstrong.
US SEC believes all cryptos apart from BTC are securities- Coinbase CEO
The US SEC has already classified over 70 crypto assets as securities but has yet to prove its claims. However, it doesn’t go without mentioning that it has, on several occasions, had its officials say that almost all cryptos apart from Bitcoin are securities.
According to a report first featured by Financial Times, the regulator had asked Coinbase to halt trading all crypto assets apart from Bitcoin, claiming they were securities. The report claims that the exchange’s chief executive officer Brian Armstrong said the SEC had made the recommendations before filing the lawsuit last month.
According to Armstrong, delisting all cryptos was not a move they could have afforded, and they had to accept to head to the courts and see the ruling. He explained that bending to the will of the US SEC would have “meant the end of the crypto industry in the US,” making it “an easy choice” for them to head to the court.
The US SEC has been going after the crypto space more vehemently in recent years, scoring over $100B in settlements and court fine wins. It recently asked the US government for an even bigger budget as it plans on weeding out ‘bad actors’ from the industry.
However, the move has yet to be widely received as many think the regulation could have its side issues with the crypto industry. Lawmakers House Majority Whip Tom Emmer and Rep. Warren Davidson have filed a motion to restructure the SEC. At the same time, the US Chamber of Commerce has called out the regulator on the grounds of smothering the crypto industry in the Coinbase case.
While these steps have been taken against a hawkish and readily recharged SEC, no major court battles have been decided on the legislative abilities of the SEC over the crypto industry apart from a partial loss to Ripple that the regulator is now planning on appealing.
Keep watching Fintech Express for more updates on this and other fintech-related developments.
by Chelsea Florence | Jul 30, 2023 | Learn
Introduction
As the popularity of cryptocurrencies continues to grow, so does the risk of cyberattacks targeting software wallets. Software wallets, though convenient, are susceptible to various online threats, such as hacking, phishing, and malware attacks. Protecting your software wallets is paramount to ensure the safety of your digital assets.
Practical Steps and Best Practices for Safeguarding Your Software Wallets From Cyberattacks
- Choose Reputable Wallets
The first step in protecting your software wallet is selecting a reputable and well-established wallet provider. Opt for wallets that have undergone thorough security audits and have a history of successful operation. Popular software wallets like Exodus, Electrum, and Trust Wallet are examples of trustworthy options with robust security features.
- Enable Two-Factor Authentication (2FA)
Two-factor authentication adds an extra layer of security to your software wallet. By enabling 2FA, you will need to provide a second form of verification, such as a one-time code sent to your mobile device, along with your password when logging in or conducting sensitive transactions. This significantly reduces the risk of unauthorized access.
- Keep Software Up-to-Date
Regularly update your software wallet to ensure that you are benefiting from the latest security patches and enhancements. Developers often release updates to address known vulnerabilities, so staying up-to-date is crucial to protect against emerging threats.
- Implement Strong Passwords
Choose strong and unique passwords for your software wallet accounts. Avoid using easily guessable information, such as birth dates or common words. A strong password should include a mix of uppercase and lowercase letters, numbers, and special characters. Consider using a password manager to securely store and generate complex passwords for all your accounts.
- Backup Your Wallet Securely
Regularly back up your software wallet’s private keys and recovery phrases. Store these backups securely in offline storage, such as a hardware wallet or a safe, away from the internet and potential hackers. This precaution ensures that you can regain access to your funds in case your device is lost, stolen, or damaged.
- Beware of Phishing Attempts
Be vigilant about phishing attempts, which often come in the form of fake websites or emails imitating legitimate wallet providers. Always double-check URLs and email addresses before entering any sensitive information. Legitimate wallet providers will never ask for your private keys or recovery phrases via email or other communication channels.
- Use Hardware Security Features
Some software wallets offer integration with hardware security features, such as Universal Second Factor (U2F) devices or hardware wallets. Utilizing these additional layers of security can help protect your software wallet from cyber threats.
- Secure Your Device
Keep your computer or smartphone secure by using strong antivirus and antimalware software. Regularly scan for potential threats and avoid downloading files or applications from untrusted sources.
- Limit Public Wi-Fi Usage
Avoid accessing your software wallet or conducting cryptocurrency transactions on public Wi-Fi networks. Public networks may lack encryption and can be susceptible to man-in-the-middle attacks.
Conclusion
Safeguarding your software wallets from cyberattacks is essential to safeguard your valuable digital assets. By following these best practices, you can significantly reduce the risk of falling victim to hacking, phishing, and malware attempts. Remember to stay informed about the latest cybersecurity trends and continuously update your security measures to stay one step ahead of potential threats. By taking a proactive approach to security, you can enjoy the benefits of software wallets while ensuring the safety of your cryptocurrency holdings.
