No market passes unimpacted by fluctuations in investor sentiment or business cycles. Although you’d bet on a market that goes up in a straight line in the long run, there are times when it experiences the bear phase.
The same principles apply to the cryptocurrency market, and investing in Bitcoin, Ethereum, or other digital coins that look promising during the winter can be an opportunity to capitalize on bargain cryptocurrency prices.
While digital currencies faced struggles, and the largest ones were not exempt from them either, it stands to good reason to ask what is the price of Ethereum when looking to gain passive income through cryptocurrency.
Not only does it make a preferred long-term investment tool, but it also serves other wide-ranging purposes, including helping developers build decentralized applications and enabling smart contract executions, meaning that the myriad use cases won’t let this token die.
While it’s true that the value of digital assets dropped by over 70% of their all-time highs over time, 2023 started on a positive note, with prices slowly appreciating. Whether it’s a diversified portfolio, great returns, or convenience that you’re interested in, here’s a handy primer on making passive income with cryptocurrency in the bear market.
Staking
Many cryptocurrencies, including those using proof-of-stake consensuses like Cardano, Solana, and Ethereum, aim to enable individuals to make passive income through “staking” coins.
This process means committing an owner’s coins to a specific blockchain to validate transactions and make the network more secure. In general, you must hold a certain amount of coins and run a staking note to participate in staking. By communicating with the network, your staking node aids in validating transactions and developing new blocks, and you receive a share of the block rewards as appreciation for your work.
But what if you don’t have the 32 ETH required to participate in staking? Thankfully, you can stake through pools that allow you to combine your computational resources with those of other speakers to boost your chances of being rewarded.
Gaming
Cryptocurrency gaming is on the rise, thanks in part to Bitcoin’s popularity. There are many crypto gaming platforms with unique games you can play for virtual currency or real money. Many people may wonder if this is worth a shot, but the truth is that you can only learn what you can get out of them by trying them.
You must create a crypto gaming account and fund it with cryptocurrency from your wallet or by purchasing tokens directly from the used platform. Once your account is funded, you can kick it off! Several popular crypto games to choose from include the following:
- Nitro league. This blockchain-based racing game creates a metaverse where you can hold social events and contests.
- Axie Infinity. In this game, monsters called Axis have each unique abilities and are used in battles against rivals.
- Summoners Arena. This is an RPG that blends blockchain with traditional gaming to allow you to engage in immersive gameplay while generating income.
- Mirror World. This game allows you to connect to various games, take part in multiple gaming scenarios, and generate profits by swapping and trading in the platform’s Marketplace.
When venturing into the crypto gaming world, make sure to play it safe by reading the terms and conditions and not investing amounts of money that can leave you broke if you lose them.
Mining
Mining involves using sophisticated machines with high computational power, which can be expensive. It was once possible to mine Bitcoin with your own computer’s CPU, but it’s no longer the case today. With the rise of increasingly complex mining hardware, chips designed to mine Bitcoin no longer exist, so you’ll need to buy specifically-designed hardware.
It can be a complicated and tedious project, consuming lots of electricity and not delivering the expected return on investment. Luckily, you can opt to join a mining pool and work together with other miners. You’ll combine your resources, share your hashing power, and divide the incentives based on the number of shares contributed.
Trading
Investors trading cryptocurrencies in the bear market take advantage of the discount prices to buy assets whose value grows when the market bounces back. Earning passive income by trading can help you recover some of the losses experienced during the crypto winter. However, this undertaking can be risky, and you need to conduct thorough research and develop a trading strategy tailored to the present market’s needs.
Tips for Surviving the cryptocurrency winter
The cryptocurrency market is famous for its volatility and prices fluctuating with the speed of light, which is one factor that allows quick profits. From time to time, it turns bearish, and those who are unfamiliar with the market can be scared away. Seasoned investors have likely experienced other crypto winters and know that the crucial thing to do when approaching this period is to avoid making hasty decisions and panic selling.
The current bear market can be the optimum time to invest in low-priced cryptocurrencies to diversify your investment portfolio. A mix of digital assets can help you minimize the risk of losing all the funds pumped into a single asset, and you can go further and look toward other investment tools, like stocks and bonds.
Whichever way you weather the crypto bear market, keep a long-term perspective and not get too caught up in short-term price fluctuations.
Final take
Passive income is in many ways the gift that keeps on giving. Not only can you achieve financial stability through it, but it helps you fast-track your long-term financial objectives and build a significant emergency fund or wealth without spending any energy actively.
Indeed, it’s not a plug-and-play solution to grow rich and unforeseen events, risks involved, or missteps can take a toll on your funds. But bear markets come and go, and if you’re a seasoned trader, you’ve likely survived harsh winters before.
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