Many people think it’s impossible to make money when the market is in decline, but this is far from true. There are numerous ways to increase your capital, which we will discuss in detail in this article.
Before we delve into the options for earning, it’s crucial to understand what actions to take to protect your deposit during a market downturn.
How to Preserve Your Deposit During a Downturn
Portfolio Diversification
Avoid investing everything in one asset or even in one category of tokens.
For instance, if 70% of your portfolio is made up of meme coins, and a notable influencer or media outlet declares that meme coins are worthless and will never increase in value, everyone will rush to sell. This will cause most assets in this category to plummet in price, leaving you with significant losses.
How can you avoid this scenario?
Diversify your portfolio.
Allocate a specific percentage of your deposit to each token category and spread it across multiple assets.
For example:
30% in ETH, BTC
20% in meme coins (DOGE, SHIBA, BONE, PEPE)
30% in AI tokens (GRT, RNDR, FET)
20% in GameFi (IMX, EGLD, AXS)
This way, you won’t be as affected by the collapse of a specific asset or type of asset because you have a balanced portfolio.
Limit Orders: Stop Loss/Take Profit
Use Stop Loss and Take Profit. Many who neglect this rule end up with substantial losses.
Limit orders are a risk management tool that allows you to automatically close a position if the price of an asset increases or decreases by a certain amount or percentage.
Thanks to limit orders, you can lock in your position at levels where you are willing to exit the asset. All exchanges offer this feature, so don’t miss the opportunity to reduce risks.
These are the two main points we wanted to highlight, which will help you preserve and grow your deposit in the future.
How to Make Money in a Declining Market
When the cryptocurrency market falls, many novice investors panic and sell their assets, waiting for the next bull run. However, there are numerous ways to profit in the market even when the price of Bitcoin and fundamental coins is trending downwards.
Staking Stablecoins
Staking stablecoins is one of the safest ways to earn in the crypto market.
The concept is simple: you provide liquidity to a platform in the form of your USDT and earn a certain annual percentage.
This type of earning can be compared to a bank deposit, but here your savings are in an asset pegged to the US dollar.
Examples of platforms where you can stake your stablecoins:
Compound Finance
Aave
Identifying Projects That Can Withstand Bearish Trends
There are always assets whose prices rise even during an overall market decline. Typically, these are coins from promising technological startups or serious fundamental projects. There are also exceptions where a meme token shows staggering growth during a bear market, but relying on such “miracles” isn’t advisable.
Another critical criterion for the success of a crypto project today is marketing. In a maturing market, hundreds of new projects emerge weekly, competing for users and token holders. A good marketing strategy, along with collaborations with influencers and other projects, will help a token grow even when the rest of the market is “in the red.”
Investing in Promising Projects at Early Stages
Another good approach to consider is presales and allocations. Most projects prefer to launch in a bull market because it’s easier to attract investments when everything is growing.
You’ve probably heard the saying, “Tough times create strong people.” Similarly, during market chaos, projects with certain support from funds or communities launch. Projects confident in their technology and market support also proceed with their launches.
These are the kinds of projects you can invest in.
Several platforms provide access to early-stage investments:
Binance Launchpad
Alloca.io
For example, on the Alloca.io platform, two current presales are actively discussed, potentially offering 2X to 5X returns. These projects are:
Circle
Hana Network
On the Alloca platform, you’ll find analytics on all the hottest presales, along with practical guides and materials to help you avoid mistakes and protect your capital in crypto. Join the global blockchain community at Alloca.io today — registering an account is free and takes less than a minute.
Conclusion
In closing, we want to emphasize that it’s best to focus on preserving your deposit first, and then on increasing it. Utilize market opportunities, but always be mindful of the risks.
