A common knowledge about cryptocurrencies is that they are highly unstable and volatile. The prices keep rising and falling – and investors need to invest smartly else they will risk losing out on their investments. During a bull run in the markets, one can invest in practically any good currency and they are likely to make a profit, however, cryptocurrency investors need to be particularly careful about selecting the currencies to invest in during bear markets.
Cryptocurrencies to Invest in During Bearish Markets
Cryptocurrency markets tend to flip between bearish and bullish momentums rather frequently. Sometimes, investors panic when it comes to investing during bearish markets as they do not want to lose out on their investments, which is a genuine concern. However, those who choose to invest smartly can make a profit even during bearish markets.
Let us take a closer look at which best cryptocurrencies you can invest in during bearish markets:
- Cryptocurrencies which are in the News
Cryptocurrency investors need to follow the news regularly. They must ensure that they are not missing out on any crypto-related news as any bit of media coverage can prove beneficial. Especially when it comes to coverage of cryptocurrencies in mainstream media – any currency that gets a positive coverage in the mainstream media is bound to boom, regardless of the market conditions. Even in bearish markets, such currencies can benefit a lot.
The best example of such kind of a boom was Litecoin, which boomed earlier this year when Litecoin Cash and LitePay was announced. Interestingly, this happened in late-February, a time when cryptocurrency markets were going through a ‘bloodbath’ phase but Litecoin was the only currency that tore through the bearish trend. Hence, it is critical to always follow the cryptocurrency news – in the niche media as well as mainstream media.
- Privacy-Focused Cryptocurrencies
Privacy-focused cryptocurrencies are another type of currencies which are always in a high demand. There is always a need for privacy and anonymity, regardless of what kind of a trend the market is going through. While these currencies may feel the pain of the market crash, there is a good chance that privacy-focused currencies would be the least affected during such bearish trends.
Some options that you can look at are those of Dash and Monero. Other emerging currencies such as Verge showed promise earlier in the year – but that didn’t last for long as the market crash swept it off and it made big losses. However, time-tested names such as Dash and Monero continue to be around
- Adult Entertainment and Gambling Cryptocurrencies
Another evergreen industry that is not really affected by the bearish trend is the adult industry – particularly the online adult entertainment industry. No matter what kind of a time it is in the markets, there are always people who are looking for a – for the lack of a better word – good time. Cryptocurrencies which are either owned by adult entertainment platforms or are used on them are both likely to perform well even in a bearish market.
Gambling-focused cryptocurrencies are also expected to perform well in these times, as gambling is an addiction and those who like to gamble will continue to gamble regardless of the trend of the cryptocurrency markets. Hence, tokens which are used for online gamblings and casinos will continue to boom even during a bearish trend in the cryptocurrency markets.
- Cryptocurrencies with High Adoption Rates
Another kind of cryptocurrencies that take a leap towards the higher end of the graph even when the market trend is bearish are those cryptocurrencies which have a high adoption rate. Those currencies which are used for regular, frequent transactions are the least likely to be affected by a bearish trend, as the demand for them is unlikely to fall. However, there are hardly (if any) currencies in the markets at the moment which may fall under this category.
Talking about adoption, sometimes when the platform that powers the currency ties up with another major firm, the currency of the platform can get a boost in the price. This has been observed earlier this year when Ripple’s price surged slightly when partnerships with major names such as MoneyGram and Western Union were announced. Moreover, Ethereum too is one platform which benefits from such updates. As mentioned in the first point, Litecoin too saw such a growth in early 2018.
Stablecoins are another popular form of cryptocurrencies that continue to be unaffected by bearish markets. In fact, they are a creation which is booming in market capitalization due to markets being bearish. While stablecoins are not a great investment option because their price pretty much remains the same – they are, however, a good investment option because this ensures that they do not go through a price crash.
Stablecoins, for those who may not be aware, are currency or commodity pegged cryptocurrencies. Those currencies/commodities are actually held by the firm which is circulating the stablecoins and ensures that these currencies have a backing. Hence, the price remains stable. Tether and TrueUSD are among the most popular stablecoins. Gemini Dollar and Paxos Standard are also two of the biggest emerging names when it comes to stablecoins.
- Niche, Industry-Specific Cryptocurrencies
Other niche and industry-specific cryptocurrencies also have a scope of booming during these times. Upcoming sectors such as travel-based cryptocurrencies and healthcare-focused currencies are also likely to boom as these two industries are also those which are unaffected by bearish or bullish trends of the markets. However, these are still developments that need more work upon before something concrete can be said about them.
Bearish and Bullish trends are a part and parcel of the cryptocurrency investment sector. These trends come and go; even though they may stick around for a longer period at times, they are bound to reverse sooner or later, because such is the nature of the concepts of demand and supply that govern the economy.