$5000 Portfolio for the Bear Market

The crypto market has been developing dynamically in recent years. This rapid growth is the result of increased interest in cryptocurrencies, both from individuals who view it as a means of payment and investors who purchase cryptocurrency for speculative purposes. The blockchain technology on which cryptocurrencies are based has gained acceptance in the financial industry, and many organizations are at the forefront of using it in their operations.

Along with traditional investing methods, such as buying foreign currencies, investing in securities, exchange-traded funds (ETFs), or mutual funds, cryptocurrencies have become a “gold mine” for those who understand all the intricacies of this market. Regardless of the type, cryptocurrencies are digital currencies that are mostly decentralized, unregulated, and not subject to any government control. Once you understand the intricacies of making money from cryptocurrencies, investing in this field can be very profitable.

In this article, we will look at cryptocurrency as a way to make money today. You will also learn about the benefits of investing in cryptocurrency and how to buy it using reliable crypto exchange software for crypto transactions. At the end, we’ll talk about what you can buy into your $5,000 portfolio during the bear market. 

Cryptocurrency As a Way of Making Money Today

Despite the fact that cryptocurrencies have been on the market for some time now, investments in them can be called a relatively new phenomenon. Until recently, many people did not understand how electronic money works and were therefore afraid to invest their money in this industry. Most of them, of course, are interested in cryptocurrencies only in terms of potential earnings, and periodically popping up news about how someone got rich on digital assets only fuels interest in this topic.

Cryptocurrency is a kind of electronic currency, the development and control over which is based on cryptographic technologies. Its accounting is decentralized, which means that it is impossible to trace where the payment came from, but the information about them and transactions is not encrypted and is most often in the public domain.

There are many strategies for investing in cryptocurrencies. They differ in risk, profitability, and time horizon, so everyone, regardless of initial capital and personal preferences, can build an effective action plan. So, one of the main decisions that should be made when getting ready to invest in crypto is at what time frame you plan to make money. Short-term investments are based on trades that occur over days, hours, or sometimes even seconds. They can be very profitable but are often associated with high risks due to the volatility of the cryptocurrency market and its small volume. On the other hand, the main advantage of long-term investments in cryptocurrency is that there is no need to always follow the charts and quotes of the asset: you buy it and wait for the price to rise.

In order to start investing, in addition to a competent strategy, it is also necessary to use reliable crypto exchange software.

The Advantages of Investing in Cryptocurrency

The emergence of cryptocurrencies in the economic system was a real turning point in the usual understanding of what money and investments are. Due to the economy’s instability, more and more people want to increase their earnings and consider crypto investing as a source of income. 

Let’s look at the main advantages of investing in cryptocurrency assets:

1. Profitability

Investing in cryptocurrency has the potential to earn you hundreds or thousands of percent per year. There has been a huge rush for digital assets as well as extremely high volatility in known tokens, which has caused these results. New projects, however, are expected to generate even greater profits. For ICO and IEO participants, a rise in the value of a coin by several tens of times is quite common.

2. Accessibility

The entry threshold for crypto investments is still low, so they are available to everyone. The minimum transaction volume is virtually unlimited regardless of which exchange you trade on. It is extremely easy to find resources for buying and selling crypto, and most of them do not require registration and verification — you only need a wallet for storing coins. By the way, it can also be opened online in just a few seconds without giving any valid personal information.

3. Deflationary Nature

Increased demand with a limited number of coins in circulation is a good reason to expect an unlimited increase in the price of coins in the future. Some analysts say that digital assets are similar to gold in this respect and, as a result, become very interesting objects for investment. This is the original nature of Bitcoin, which has an issuance limit, and the No. 2 cryptocurrency, Ethereum, is moving toward the same option.

4. Liquidity

The system works equally fast in both directions, meaning you can sell cryptocurrency just as quickly as you can buy it. Therefore, if an investor needs cash, he can get it back almost instantly, unlike selling gold or stocks. Investing in crypto is a dynamic thing.

Ways of Investing In Cryptocurrencies

There are several effective ways through which you can buy almost any cryptocurrency.

1. Cryptocurrency Exchanges

Since cryptocurrency is generated by users through mining, it is impossible to buy coins from any official store or bank. To buy cryptocurrency, it is necessary to use, for example, the services of cryptocurrency exchanges: to participate in trading or exchange at the exchange rate. The principle of any exchange is the same — it creates the conditions for financial transactions, such as buying cryptocurrency online, but with a percentage of the turnover of digital money or royalties on the number of transactions performed.

At the moment, there are hundreds of exchanges for the purchase of cryptocurrency, which differ from each other by the volume of trading, the order of registration, the convenience, and the level of security. Some online resources even make ratings of exchanges where you can buy cryptocurrency. Good crypto exchange software is key for buying crypto. Make sure to use a reliable one.

2. Exchangers

The exchanger works according to the following principle: the required amount of cryptocurrency is entered into one field, the system calculates the payment amount, and the transaction is made. It is beneficial to buy cryptocurrency this way for those who want to make a quick transaction at an acceptable rate. Because there are a large number of exchangers on the web, you can choose a suitable rate and exchange option yourself. But this method has a disadvantage — the system takes a percentage of the transaction.

3. P2P Trading

P2P (peer-to-peer/person-to-person) trading is buying and selling cryptocurrencies without intermediaries. The system allows you to quickly and safely sell or buy cryptocurrencies in large volumes from proven large merchants. On P2P, you can find the most favorable offers to buy and sell cryptocurrencies.

Even though this way of acquiring cryptocurrency is the most profitable, unfortunately, it is not the safest one. The user searches for the desired ad to sell cryptocurrency on the exchange and leaves a request; upon receipt, the ad’s author sends the transfer details. After payment, the author transfers the cryptocurrency to you. With this method, there is no commission, and it has the most favorable rate, but you can get caught in the clutches of fraudsters.

$5000 Portfolio for a Bear Market: What Strategy to Choose And What to Buy?

As traders’ confidence in conservative investment instruments declines, investors are increasingly interested in digital assets, which have great growth potential. Today, many different projects have great prospects for development in the future. So, having a good trading strategy and reliable crypto exchange software are important components when it comes to trading; these will help you achieve your goals.

Before we look at an example of what you can include in your $5,000 investment portfolio, you need to understand what strategy you need to use when the market is in a bearish mood. 

It should be noted that the most effective strategy in the crypto market when it is in a bearish trend is patience. Market volatility is caused by many factors, among which, in most cases, news plays a decisive role. There were many cases when Bitcoin and other crypto assets could lose (or gain) tens of percent in price just because of a single news item that appeared at the moment. During a bearish trend, it is essential to stay calm and not panic. Panic often leads to many investors selling their assets for fear of further price declines. It is important to understand that any market is a system that has cyclical fluctuations, which means that rapid growth will certainly be followed by a decrease and vice versa.

In order to achieve the best investment result in the short term, given the bearish market sentiment, a portfolio of $5,000 should include the following assets:

1. Bitcoin (BTC)

Bitcoin has become more of a legend on the crypto market than an actual digital asset in use. It has an issue of 21 million coins. Thanks to this, the value of BTC has grown by thousands of percent since 2017, reaching an all-time high of $68,789.63 in November 2021. It can safely be used as a long-term investment tool.

2. Ethereum (ETH)

Ethereum is a great investment tool that should definitely be in the portfolio of every professional investor. This crypto is now interesting not only as an object for investment but also as a base or platform for many promising areas of the digital economy. A huge number of dApps applications are being developed on the basis of ETH.

3. Ripple (XRP)

Ripple is a global system for cross-currency payments created in 2012 by Ripple Labs. The main advantage of the network is that it allows mutual transfers anywhere in the world in just a few seconds. 

In late 2017, it was announced that U.S. financial giant American Express and Spanish-British group Santander were switching to the Ripple protocol for transatlantic transfers. More than 75 payment systems and 90 banks worldwide, including UniCredit and Standart Chartered, are also using the protocol. All of this has made Ripple a very attractive investment choice.

It is also worth noting that some time ago, this project had some problems with the SEC, which brought down its quotes, but according to recent news, the conflict is near resolution, which contributes to the growth of the asset’s price.

Conclusion

In order to summarize all the above, it should be said that investing in crypto assets today is a popular tool for multiplying your capital. Using the right strategy and reliable crypto exchange software, you can find the perfect moment to make a profitable deal. By investing in Bitcoin, Ethereum, Ripple, and other altcoins, you can be sure that the demand generated by their value as a unique technology will drive further growth and prices, which is definitely an excellent chance to jump on the “profit train” before the market goes up in bullish momentum.