Prepare the bear

in LeoFinance2 months ago

An interesting conversation came up, where I mentioned that out of the 4-plus years I have been in crypto, the majority of it has been spent in a bear market. The difference between bull and bear can be quite extreme, but during a bull, a lot of people act as if it is going to last forever, forgetting that the bear will return and do very little in preparation. If the goal is for sustainability and development of income streams, it is important to prepare for the downturns as well.

The discussion came up in regards to the increasing prices and the recent 30% pullback, as one of my friends was saying he never thought he would be firstly so emotionally affected by the ups and downs and secondly, becoming increasing resilient to them. I mentioned that while technically I could live off crypto under the current conditions, since three-quarters of my time in crypto has been spent in a bear market, I am very hesitant to "celebrate" too soon.

bear.jpg

When the market crashes there is a voice in the back of my head saying, "crypto winter is coming, again" and I should have sold. The bull markets are easy, but there is a fear that I missed the opportunity to create an adequate foundation to survive the bear. However, I am in the process of changing my outlook and position to account for the bear market, by hopefully setting up tools to keep ticking enough, even if at a far lesser rate than currently.

A few people have mentioned how young people who got into crypto recently with the likes of Doge and made a killing are driving some industries, like house prices in some areas. However, even if this is the case (I don't think there are enough to have a marked difference) and they are doing very well, what will their position look like at the depth of the next bear market, are they prepared for the rainy days, or are they having a lot of very sunny days during the bull? I suspect that many are out enjoying the sunshine, paying little heed to the coming winter.

This happened a fair bit through 2018 when prices began to tumble, as some people had decided at the height of the bull market that now they are ready to go all in on crypto - but living off crypto at the peak is quite different to living off crypto when it is 95%+ down. A lot of the people who had confidently asserted that they had "made it" fell silent, because there was no backup plan for the overextension of the new lifestyle and a lot of those who went this way, ended up draining all of what they had accumulated.

Of course, "In it for a good time, not a long time" can be argued, but I think most would prefer having some stability or some floor on the standard of living, rather than constantly being at the whim and fancy of volatile markets. However, to be able to build some kind of platform, requires thinking ahead as to what is going to adequately provide revenue streams. There may still be a reduction in lifestyle, but it doesn't have to go from boom to bust.

One of my plans for this is DeFi pools where I am able to park some of my tokens and keep earning a passive income from them, while still supporting the growth of various crypto aspects. However, I have no idea what these pool returns will look like at the bottom of a bear market. This sounds like "tomorrow's problem" but in order for a small return to be adequate later, a larger amount of capital has to be accumulated.

Over the years I have talked about sunshine people, those who are only around when conditions are good. However, the people who are able to work in the rain and adverse conditions tend to be the ones who will benefit the most later. But, when the sun is shining, there are those who head to the beach to take advantage of the weather and those who make hay instead. Obviously, there is room for a hybrid approach, but I think that if the bears are often twice as long as the bulls, it is good to think about improving experience in the other two-thirds of life.

For me personally, I am planning to keep working various jobs for life, even though I hope to not have to work for the money. However, what I am planning to do is set up a process where my value held can work for me, so that if times do get very difficult in the world, I am never completely reliant on any single source of income. While I might end up stocking shelves at the supermarket, I will still be able to pay my bills and live a relatively comfortable life. This means being a little uncomfortable now though.

What I wonder for many though is, if people are largely impatient and value the maximization of experience in the now over preparation for the future, what is going to happen when the bear markets return? I suspect there will be a lot of disgruntled people as there always have been, though they will be surrounded by a lot of "stuff" that they could have afforded earlier, albeit, now worthless stuff.

I believe that those who did prepare for the future, will likely have a far more even experience as while the dips come in and possibly are quite extended, they will not have to reduce their lifestyle much at all, as they have chosen a middle ground, rather than a polarized position of peak and trough.

It is is up to each of us to design our lives and each to live the life we have. Some people make decisions for a, live now and what will come will be, approach, while others attempt to have some control over their "destiny". As said, I want to try and get into position for a more stable experience that might not see a massive amount of peak, but will not fall deep into the troughs.

I know from my own experience, crypto winters aren't fun and staying consistent in the rain is difficult. For the uninitiated, it is a great experience that they will not want to repeat. For the sunshine only people, they don't know what it is like as they disappear into hibernation until the sun comes out again - missing many opportunities along the way.

There is so much opportunity in crypto still to come and it is going to take decades to come close to being realized, but if in the bull markets people live life large to the point they never build a base for themselves, a lot of the individual potential they have will be lost. At some point of course, value has to be realized and used to improve quality of life, but considering at what point and to what extent that will be takes consideration. A lot of that consideration comes from experience gained from hardship, which is why those who have seen the worst of life, are often more reserved in the best it has to offer - because they don't want to go all the way back to the start each cycle of the market.

Let the good times roll in perpetuity.

Taraz
[ Gen1: Hive ]

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I am pretty lucky that I have a decent paying job that I can always fall back on. My goal is to use my crypto earnings in the current bear market to reduce some of the strain that is placed on my regular budget. Things like reducing debt will go a long way towards freeing up some of that every two week paycheck money. Without those burdens, it becomes easier to make it through the bear markets I think. DeFi is definitely a place I will be keeping some of my crypto. I like the stable coin pairs like BUSD on CUB.

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Things like reducing debt will go a long way towards freeing up some of that every two week paycheck money.

I agree, but I think timing can be used well at the moment. Is it better to reduce debt now by 1000, or at the end of the year by 3000 after earning in a pool on it? If the APR is so much higher than the interest on the debt, it makes it a bit of a no-brainer with some of the capital.

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Well, I just reduced my debt by 100%, so I am thinking it was the right move for me :)

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Yeah, don't get me wrong here, it is not a bad way to go. I would like to reduce mine a bit too.

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These are my exact thoughts. I know how the bear market felt after that bull run of 2018. That was one long winter. The way things are now I doubt the bull market will hold out for long. To salvage things I have dipped my hands into different DeFi projects. I have stakes in apeswap, cub finance and hyperjump. I am desperately working towards getting some stake in cake too. Mainly I am gathering as much usdt as I can so when the downturn comes, I can buy these coins real cheap and stake them. I hope the bull run lets me make some profit before it ends.

People are making huge gains in the DeFi space and it has to be seen to be believed. While some are buying cars and houses, others are investing into solid projects.

My bag is not much and I don't even know if it would cover my spending during the coming bear market but if I can have usdt to facilitate trades as well as buy coins to stake I believe that i would do better in this coming bear market than in the previous.

Great analysis @tarazkp

Apeswap is going hard at the moment and CUB is solid - :)

People are making huge gains in the DeFi space and it has to be seen to be believed. While some are buying cars and houses, others are investing into solid projects.

People look so short, or perhaps they have such low dreams.

At least have alternate income streams in the bear will man not having to find as much extra income off chain.

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Having been around over half a century now, I know nothing on earth is permanent--especially things that depend on the whims of human behavior. The old advice to buy when "blood is running in the streets" still applies. No matter how bad things look, it won't last. No matter how good things look, it won't last. Be an engineer: plan for every contingency, then be confident you are ready for whatever happens. !BBH

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No matter how bad things look, it won't last. No matter how good things look, it won't last.

Precisely. This is the same for happiness and sadness too.

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Hive is like Westeros, our winters last for years. xD
The night is dark and full of terrors.


Hugs&Coffee,
~Josie~

One long bear market ... great time to be stacking coins.

Only if you have available resources o stack with. Since I work and live within my means for the most part, I should always be able to add something.

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Yes... if you get any fiat from other side hustles .... dump that into BTC, ETH, BNB on the dips.

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And how terrible it can be for some

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Crypto volatility is a problem. But a lot of that problem can be solved by having cryptoassets that function a good crpytocurrencies (have a healthy supply and demand) and are accepted!

That's the real issue. Most cryptoassets still have limited uses, and so called cryptocurrencies are not currencies at all, because they're not accepted for a wide range of goods and services by members of the economy. The best thing crypto enthusiasts can do is accept the cryptocurrency that interests them, as payment for goods and services rendered.

We're also somewhat past the days of just throwing money at the market and making a fortune. If people want to make money using cryptocurrencies, they need to do what people do to make money in USD: invest intelligently, start businesses, etc.

If people want to make money using cryptocurrencies, they need to do what people do to make money in USD: invest intelligently, start businesses, etc.

The longer this goes, the more obvious this becomes to investors and then, the less speculative coins become - it is business value where the real value lays and that is starting in earnest.

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Excellent metaphor for patience

"I know from my own experience, crypto winters aren't fun and staying consistent in the rain is difficult. For the uninitiated, it is a great experience that they will not want to repeat. For the sunshine only people, they don't know what it is like as they disappear into hibernation until the sun comes out again - missing many opportunities along the way.'

Thanks :)

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i have written about this extensively over the past two months and I have had time to introspect. currently investing in dividend tokens. i am not doing much in the speculative department. I want several income streams. that is a better cushion against the impending bear market.

when the bear comes I will be here. i am not sure I can say the same about many people. i dare say it is easier during the bear market because there is room to grow and earn because most people are not willing to.

lastly, I try to maintain my standard of living. it is easy to follow into the trap of increasing one's expenditure once there is increasing revenue. live simple and invest--time and material resources.

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i dare say it is easier during the bear market because there is room to grow and earn because most people are not willing to.

Almost guaranteed.

lastly, I try to maintain my standard of living.

It is one of those funny things. People had such a great time as youths living off nothing, but struggle when they are earning 10x as much a month.

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People had such a great time as youths living off nothing, but struggle when they are earning 10x as much a month.

No falling for that trap. Even got a part-time job so I don't have to spend my crypto. If anything I want to invest all I earn here so those investments can bring good returns which I can use to grow my stake faster.

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This is such an insightful post. A lot of wisdom in this post. I have been so scared about the uncertainty of this bull run. I guess everyone has to figure out how to prepare for the worst in their own way.
I intend to start pooling some usdt in preparation for the bear market and then buy in. If the bear market doesn't come on time, I could use the funds to invest in something that is not dependent on the crypto market. Some offline business or so.

Wonderful advice in this post.

Just remember, intentions don't count for much when they come too late. You have to make your own decisions with it, but remember that bull cycles aren't eternal.

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Such a good article; but I doubt it will fall on the right ears. People want to believe that returns go up infinitely. But the only thing which seems infinite is the cyclic repeatability of human group think stupidity.

But the only thing which seems infinite is the cyclic repeatability of human group think stupidity.

This is the truth. And you are right, it won't fall on deaf ears, it just won't fall on the right ears. It is going to be interesting to see how many people who are long on Hive panic and get upset during the next bear.

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I just woke up from the 2018 crypto winter hibernation. I hope we aren't going back into another crypto winter.

Not yet - 8-12 months perhaps?

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The most funny thing that new people don't know is that the bear market means an accumulation phase. Don't panic, just accumulate and HODL. Bull market won't go away.

The trend is always your friend right? :)

Yes, there is no issue with the bear, if prepared. I hope people here are prepared as one of the great things about Hive is information is plentiful -though people don't necessarily read that much.

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I have spent the last year building up my savings in anticipation of the bull run. Knowing that things are getting ready to shoot to the moon, I am starting to cool off on buying for growth. My focus is now on preparing for winter buy accumulating stablecoins, which are currently earning fair interest rates. Next year, I'll use my stablecoin savings to buy crypto on the return trip from the moon. We have three years after this one to accumulate for the next bull run.

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I am starting to cool off on buying for growth.

Yeah, you are likely not the only one who has been here early. if you bought at 100, you aren't adding much of a percentage buying at 1000

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I don't know but I plan to get back my initial capital after my tokens run ups over 250% as it nears winter. At least this way, I will have lost nothing and everything will be a free trade. But I don't plan on selling out of anything on HIVE right now because I am treating it more as a long term play.

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I tihnk a few will do this - but 250% is the difficult thing. I sold some things at 300% up - that went another 3000% on top of that.

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I generally just say about 250% up but its ultimately up to the person. I plan on taking a little bit more off everytime it goes up. That first 250% is basically just me getting a free trade.

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A lot of truth here! Personally, regarding for hive I don't think we will go lower than 0.30 during bear. It doesn't make sense to go lower than when we started at 0.10.

I assume we will do a -85% at least from the top. I still think there is the bull around, we just have to be patient.

Who knows where hive could land... especially with the coming marketing campaign, we even could go higher in the internal ranks of crypto.

I reckon if it was 30 cents, I'd be relatively okay with that - unless the top was up at 20 dollars!

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Well I'm satisfied if we arrive at 10$ 😀 that would be a 100x from 0.10

i got to the show on the end of last bull, so winter was almost all i got :) bull is weird.
don't own enough of crypto to even think about living of it, so i will move that dilemma to the next bull run :)

bull is weird.

And the people weirder :D

don't own enough of crypto to even think about living of it, so i will move that dilemma to the next bull run :)

4 years sounds like a long time for many - but consistency is key. If you think that you are likely to retire in your 60s, 4 years is close enough ;D

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Bears are the best times to be stacking crypto though.

Indeed. If you have something to buy with. It is still about being prepared for the bear - in this case, having financial availability.

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Yes... I think if you stack fiat in the bull run, and only buy during the big 30% dips... or eventually some kind of Bear Bottom... that’s the time to buy.... Bear Bottom. Ha ha....

While I might end up stocking shelves at the supermarket

Well now.., you can do a 'Horrors of Kwiksave' series just like me then and hope some genuine tyrannical boss can spice up your stories like mine did!

:D

It wouldn't be my first time working in a supermarket - I used to prep and sell shaved meats. I was vegetarian at the time :D

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Never sell always BUIDL so many ups and downs it's like a bloody roller coaster. I was waiting on some play money to come across hoping it would last week when Hive was down.

Nope came across today lol

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Nope came across today lol

This is always the way!

My friend was trying to get into BTC - by the time his funds cleared, it was back up 10%

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Well that is always the issue, a little dios brings the fear that winter is coming, although no one knows when the bear will hit but then my plan is to diversify into so many other investment options as this will help me not sell my major stakes like my hive holdings which I plan to consistenly build for like ten years and more.

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Ten years is a good plan - it doesn't mean nothing can be used along the way, but there is more going in to generate than out to live.

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Yeah at least what I'll use will be very little compare to what I'll stack, stacking eventually does it for me, in ten years I'll take the little gains along the way.

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What's your crypto "cash out" plan? To navigate the bull and bear markets the best.

When do you think the top of this bull run will be? Will there be another 80% drop when we reach the new top?

I don't have a cash-out plan really - I would like to stay mostly in crypto but perhaps have some "working funds". What has changed since 2017 is the range of stables - it means that when the crashes do come, people are able to be "closer" to buying back in and further from fiat than before - it might have a profound effect, meaning that people could buy in earlier, perhaps raising the floor significantly from the last fall.

I am not great at predicting tops or bottoms, but if I was a gambling man, perhaps Novemberish for the top.

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Coming from a place that gets monsoons, rain is fine.

Winters sound harder to work through.

I am new in the crypto market since the beginning of the year. A friend told me how the years will be when the bears are "at work".

Personally, I will just hold. It will cost me psychological pressure, but I will gladly take it.

Soon the bears will show up.
Then I look forward to the bulls using their horns to nudge prices back up. Even if it will take 3 years.