How to earn passive crypto income in a bear market?

The majority of new investors are in the middle of their first crypto winter, during which most digital assets have depreciated by more than 70% from their November 2021 highs. While a bear market is tough for everyone, it can be especially challenging for those who are new to the space and don’t have much experience dealing with market volatility.

That said, there are still opportunities to earn passive income during a bear market — crypto traders just have to know where to look. In this article, we will look at how Wall Street traders persevere and what simple things can be done to make money. Is it time to buy more assets? What are some of the easiest ways to generate cash in a recession? Are there any investment techniques that work during bear markets? What assets to invest in while Bitcoin (BTC) is in a bear market in 2022?

What is a bear market?

In traditional markets, a bear market is described as any time stock prices fall by more than 20% from a previous high. In cryptocurrency, a bear market refers to an extended period of time where prices fall significantly and market confidence plummets.

How long do crypto winters last? While there is no set time period, most people agree that a bear market in cryptocurrency lasts for at least three months. The current crypto winter began in November of 2021 and, as of this writing, shows no signs of abating. So, how long will this bear market last?

This is impossible to say for certain, but based on past trends, it could take a while. The last bear market in cryptocurrency lasted over two years, from 2017 to late 2020. If the current bear market follows a similar timeline, we might be in for a long winter.

More often than not, during a bear market, every asset falls in value with only very brief deviations. Later on, investors spot assets that are selling at bargain prices and purchase them, ending the bear markets for good.

Bear markets are defined by low investor confidence and pessimism. During a bear market, investors tend to ignore any positive news and sell rapidly to drive asset prices down. The cryptocurrency market has already seen three bull markets since Bitcoin’s inception in 2009 and is currently experiencing its third bear market, having declined by almost 70% from its all-time high.

Can you predict a crypto bear market? Predicting a bear market is nearly impossible, and most investors do not anticipate one until they have lost at least 5% of the value of their investment portfolio.

How to survive a crypto bear market?

Given the current market conditions of continued volatility and uneasiness about the future, it’s okay to feel overwhelmed as an investor. It can be difficult to make logical decisions or take any required actions when your portfolio is continuously taking a hit. When the crypto market becomes bearish, nearly all assets in the market begin to fall, even if they report positive news or developments.

The key to surviving a bear market is to have a long-term vision and focus on the project’s fundamentals rather than its current price. Although bear markets typically result in increased prices, many portfolios that were harmed by bear markets may take longer to recover. Some, on the other hand, never return. A bear market is a good example of how capital preservation is important in making investments.

However, as Warren Buffett noted, “you must be greedy when others are fearful” in the long run. As a result, there are advantages to the bear market. There are a number of platforms in the cryptocurrency industry that help earn passive income, which can help investors take advantage of the bear market, as explained in the below sections.