Bear markets are tough,
but that doesn't mean you can't make money.
You just need to tweak your strategy,
and $25 to $50 in passive income daily can be yours.
First off, stop trying to short crypto.
It's just too hard to get it right.
Trying to short crypto while the markets are down
or buying at all time highs
are exactly what the market wants you to do,
and it isn't likely to make you money.
Whenever Bitcoin takes a tumble, lots of questions
crop up about whether it's actually a bubble
or whether crypto in general is some
kind of sleeper cell elaborate scam.
And you know why?
Because people click on it
and it makes media companies and YouTubers money.
There's an endless supply of arguments on both sides.
And the truth is, no one really knows
what's going to happen next.
This is because we're just all oblivious apes
swaying in the market wins.
So we need strategies that can earn us money
even when the markets are leaving us to sit on the bench.
So at the beginning of this video,
I said you probably shouldn't short crypto,
and that's still technically true.
But there's one strategy that automatically balances long
and short positions, making it very, very hard
to lose money on your investment
while kicking you out some passive income at the same
time that's using spot-futures arbitrage bots.
And trust me, it's not as scary as it sounds.
I've actually been testing out a few of these bots myself
to see what is possible to earn in a bear market.
I did this because a tech savvy friend of mine
sent me a screenshot of his bot,
and now over 400 days, the average APR is 27%.
So that was enough for me to learn literally
everything I could about these bots.
So allow me to summarize.
Using bots on Pionex, which I have linked in the description,
you can basically split a buy between long and short positions.
Let's say you invested $1,000,
the bot would take the crypto of your choice,
put $500 into a long position
and $500 into a short position.
So say if Bitcoin goes up in price,
your long position goes up and your short position goes down.
The result is your $1,000 never goes much
above or below that starting investment amount.
This strategy basically insulates you from market movements
while the bot works to earn you money.
But of course, that in itself
doesn't make you any money.
That's like betting $100
for and against the exact same basketball team.
Not a great way to make money,
but here's where it gets interesting.
A spot-futures arbitrage bot earns
profit from something called a funding fee or funding rate.
These are fees paid to investors
as an incentive to move their capital
into either long or short positions.
This is to ensure that the futures and
spot prices for an asset stay in line.
It's really no different than a company lowering its
prices because they ordered too much inventory.
Funding fees often change based on market sentiment.
I've seen rates as high as 1.2% daily during
bull runs, which is absolutely insane.
But bull runs don't last forever
and neither do those insane rates.
However, because this strategy is market neutral,
you can still make money in bear markets,
just not quite as much money.
Average returns seem to be somewhere between
15% and 50% annually.
In my test, during a severe downturn,
I was making about 5% APR in the worst of times,
which of course isn't an insane return.
But this is on nearly zero risk
and you'll be one of the few people who are
actually making money during the dip.
Then once markets turn bullish again,
you'll see that APR shoot way up beyond 50%.
So let's assume an average yearly return of 27%
based on that screenshot that was sent to me.
At that rate, it would take an investment of $34,000
to make $25 a day in passive income.
And of course that can be scaled up or down.
An investment of $1,400 at 27% APR
would get you $1 per day passive income.
The app that I used for this was Pionex.
If you use the link in the description,
you'll save big on trading fees.
Now the next strategy to profit in a bear market
has to do with a smarter way to buy the dip.
Now trigger warning, this uses a bit of
technical analysis, which if you aren't familiar,
you can think of technical analysis kind of like Astrology for guys.
And while I'd never bet the farm on TA,
they are tools here that can give us some insights.
One of my favorite is the Relative Strength Index, or RSI.
This can give you more information on when
may be the best time to buy the dip.
RSi is pretty easy to find.
Here you can see the candlestick chart for Luna.
Select the indicators on the top right.
Search for RSI and it shows the purple line
on the bottom beneath the candlestick chart.
That is RSI.
Under normal market conditions,
when RSI dips below 30,
this means an asset is oversold
and may be due for an increase in price.
The opposite is true for when the RSI is over 70,
the price is more likely to decrease,
an exception being when Mercury is in retrograde.
I'm just kidding. I'm totally kidding.
RSI doesn't use any black magic.
It just measures the magnitude of
price changes over time.
Anyway, you can use this to help
find a good time to buy.
One strategy is to use the RSI divergence strategy.
Here we need to compare price trends and RSI trends
and find where these two go in opposite direction.
Typically RSI follows price movements,
but on rare occasions it doesn't
and a trend reversal is more likely to happen.
We can see an example of this on TradingView,
line A traces a downwards trend in Bitcoin's price,
while the RSI in the same period moved upwards
and in the days that followed we saw a reversal
and the prices moved back up.
Now line B is a little bit trickier to spot,
but the same holds true.
At the point that price and RSI diverge,
Bitcoin hit its relative high
and took a dive in price in the days after.
Now what I want to point out here
is that there are tools that can help you take
a more measured approach to buying the dip.
And if you don't want to deal with looking at charts,
there's nothing wrong with simply dollar cost averaging over time,
or just leaving some cash on the side.
Now, allow me to show you what to do with
that cash that you have sitting on the sidelines
to earn you even more money.
Of course, none of this is financial advice.
The thing is, Bitcoin has a gravitational pull
and when Bitcoin is going down, you bet
it's taken just about everyone else with it.
That is, unless you are a stablecoin.
Stablecoins are kind of like digital cash
that allow you to act like a bank earning money
on your money like a bank does.
This means regardless of market conditions,
you can get safe returns of 8% to 20% APY.
Now sure this isn't 83,000% APY,
but here you can be sure
that the coins that you lend are still worth a dollar
while they're earning you interest.
Now the first step here is deciding which stable coin
you like best and how tech savvy you are.
The most popular stable coins to lend our USDT, Dai, USDC,
and UST is an up and comer in the space.
Once you know the stablecoin you want to go with,
you can then choose a service.
Now I have a video that completely breaks this down.
I'll leave in the description, so I'm not going to go
crazy in depth here, but I'll tell you the strategy that I take.
I lend a chunk out on Kucoin.
Here you can see I actually have made more than $24,000
in interest lending on this platform in less than a year.
And one note here is while Kucoin has
the USDT lending rates on average,
the rates can sway pretty dramatically
depending on the market.
My average over the last nine or so months
has been about 16% APY,
which is awesome in my opinion.
and I recently started lending out UST as well
as well on the Anchor protocol.
This currently pays out just about 20% APY,
which is amazing.
Now as great as the rates are here,
this takes a higher level of crypto know how,
and there's a little bit of extra risk as well.
So Anchor is decentralized,
you need to have an understanding of how to use dApps
and set up an additional wallet.
And UST, the stablecoin here, is algorithmic
and backed by crypto and smart contracts.
Not one to one with US dollars like
the stablecoin Dai for example.
I'm working on a long term experiment
that goes much more in depth on how
the Anchor protocol works and whether those
rates are sustainable.
So just make sure you're subscribed so you don't miss it
when I drop that video.
So what do you need to make $25 a day?
Using my personal experience and getting around 16% APY
an investor would need to put up $57,000,
$5 a day in passive income would require
an investment of about $11,500.
Really not bad considering this is one of the lowest
risk strategies for making passive income.
Lending has been my crush when it comes to
crypto income and that means if lending is my
crush then staking would probably be my side chick.
So let's do an honorable mention for staking
which isn't the best possible method
for passive income in a bear market but it has its place.
So when I think of staking in a
bear market, I think it's wonderful if you're
staking a crypto that you plan to hold long term.
If you plan to hold long term there's really no downside to staking.
You can earn an extra 4% to 12% on your crypto
but of course you are still subject
to the crypto you're holding potentially going down
in price and the problem is when prices go down,
so do your staking rewards in relative dollars.
So here's what I mean.
Let's say you're staking a crypto making $10 a day
the crypto has staking rewards of 10%
so that means you have $36,500 invested.
If that crypto tanks 40%,
not only does your $36,000 not decrease
but so does your $10 a day in staking rewards
because staking rewards are paid out based on current value.
This is why I think if you plan on holding that
crypto long term anyways you might as well stake it.
But if you're looking to just make passive income
one of the other options on this list is probably better.
Now let's cover a more experimental method.
Just a few days ago, Cointelegraph
came up with a report on their proprietary
algorithmic indicator called the Vortex Score.
It's available to pro subscribers,
and while this isn't an investing instrument
like a bot, you can use the scores associated with some
cryptos to make some well timed investment decisions.
And the proof is one strategy called Buy 90/Sell 70
was up 15% in January during a very large downturn.
So let's back this up just a little bit.
The Vortex Score is calculated by an algorithm that
factors in as much historical data as possible,
and then draws correlations to movements in price
that comes soon after.
It looks at things like Twitter activity,
trading volume, recent price movements, and social sentiment.
And the resulting score tells us how
confident the algorithm is that the asset
is either bullish, neutral or bearish.
And then it goes even further by factoring in
how consistent the crypto's behavior is
in relation to its history.
A score of 50 is neutral, which means that the
Vortex score doesn't really see any correlation.
But a more rare score of 90 indicates
that the observed set up of trading conditions
appeared before a dramatic spike in price.
Now, there are many test strategies using Vortex,
but the only one that was in the green
for 2022 is Buy 90/Sell 70.
So using this approach,
you'd basically buy your asset if
and only if it attains a score of 90 or higher,
and then sell as soon as it dips below a 70.
But of course, we can't bank on this 100%.
Even Cointelegraph themselves issue a disclaimer whenever they
report on how successful these strategies are.
One, they don't account for liquidity
or market depth on the exchange that you might be using.
And two, they don't account for the trading fees
that you'd find yourself paying, which could
wipe out the majority of your gains.
So I found this an interesting algorithm to keep my eyes on,
but again, I won't be betting my life savings on it.
Now, there's a reason for the saying
Everyone's a genius in a bull market
because it's simply the easiest time to make money.
It's literally harder to be wrong in a bull market,
but it's not always a Sunshine and roses.
So it's important to be a well rounded investor
and understand opportunities that can be
taken in even the worst markets.
And as you can see, it's totally possible
to make great passive income, whether crypto is up 20%
or down 40%.
Now, from here, I would recommend this video
on screen that talks about another exciting way
that you can make passive income with crypto.
And I want to thank you so much for watching,
and I hope you have a profitable day!