in the last 30 days
and it feels like there's no end in sight.
Sentiment is decreasing, and I can
feel the negativity creeping up again.
Now, this is going to be a
fairly atypical video because it's urgent.
Typically, a video of mine takes takes
one to four weeks to produce.
But given that the market is crashing right now
and I've received hundreds of messages about this,
I wanted to put out something quickly. Because of this,
let's quickly look at why the markets are
down, whether you should actually be worried for
the long term, and some actions that you
can take today to increase your profits.
I want to start by saying although crypto is down,
we need to look at other asset classes first.
Zooming out will help us set the stage for
what's going on in the world and zooming out,
we can see everything is down right now.
The Nasdaq is down significantly.
Anything high growth, anything tech is not doing well.
Even what's generally considered the safe bet in investing, the
S&P 500 is down 10% in the last month.
That's a massive amount.
This is largely the result of uncertainty.
Investors are waiting for earnings calls to come
out this week and some policy decisions from
the Federal Reserve that may tighten up monetary
policy just a little bit.
Basically, investors are concerned that the Federal Open
Market Committee, the group that decides interest rates,
are going to bump up rates quickly in
order to fight against inflation.
If rates do jump up significantly, this has the simple
downside that will be more expensive to borrow money.
This matters in stocks, especially high growth
stocks, because they borrow money in order
to grow at a rapid pace.
So it makes sense that growth will
slow if borrowing costs of money increase.
Now, it's unlikely that the FOMC will decide to
all of a sudden hike rates dramatically, as they
know this would cause absolute chaos in the market.
Instead, it's much more likely that they set a
target date in which rates will slowly begin increasing.
Well, in times of fear, investors, especially big institutional
investors, will move money to safer asset classes in
anticipation of further drops in the market.
This means as that rebalancing occurs, more money
is pulled out of crypto and out of
speculative assets and even non speculative stocks and
moved into more safe assets.
One way to track if money is being moved to safer
assets is by looking at the ten year treasury yield.
The yield of this government backed bond
will typically decrease in times of uncertainty.
And if we look at the charts, the ten
year note has actually decreased 8.5% since last week.
Again, this is big money making moves
in anticipation of monetary policy changes.
Then what we see is the fear from one market creep
into other markets, which is what we're seeing in crypto.
People tend to assume that if it's time to
be scared in one asset class, well, we better
be fearful in this other asset class as well.
And the funny thing is that this kind
of ends up being a self-fulfilling prophecy.
People pull money out, markets dip, fear increases, more
money gets pulled out, markets dip even further.
It's this vicious downward spiral.
Then we have the added impact of Russia.
The Central Bank of Russia recently came out
with a report titled "Cryptocurrencies: Trends, Risks, Measures".
In this report, cryptocurrencies are
compared to Ponzi schemes.
And there's a call for this outright ban
throughout Russia by the bank of Russia.
And this caused a little bit of an uproar
throughout the world of crypto and hurt markets
as investors who were already on the edge of their
seats worried about crypto, they received this confirmation that, you
know, this may be a good time to go ahead
and exit the market for a little while.
However, it turned out that the opinions
of the report were not a consensus.
The ban is not universally accepted in Russia.
Others have said that a ban of this magnitude would
be virtually impossible, which I have to agree with you.
I mean, someone could just use a VPN in
Russia and still use crypto if they wanted to,
if it did get banned.
To me, this is something to keep an eye on,
but it doesn't feel like something that should
keep you out of the markets entirely.
Of course, none of this is financial advice.
In crypto, another way to judge fear in the market,
besides the obvious of just looking at price charts and
seeing bloody red price decreases, you can gain some insights
by looking at the market caps of stable coins.
This is because in times of uncertainty, people
will move some of their crypto positions to
assets pegged to the dollar- stablecoins.
In fact, this is a moneymaking strategy that I'm
going to talk about in just a minute.
But if we look at the market caps of UST,
USDT, MIM, USDC, we can see that they have all
had dramatic increases in market cap in the last month.
So this leads us to the question, is this the end?
Is this the long, dark, cold, bear
market that we've been worried about?
In order to better understand, I think we
should look at adoption instead of prices, pretend
that CoinMarketCap doesn't exist, and ask
the question, is blockchain technology actually being used
more today than six months ago?
More today than a year ago?
Is it trending upwards?
This is important because in the long run,
the value of crypto projects will be determined
by the value that they provide.
Is this technology actually being used?
Where are the trends headed?
So let's start off with NFTs.
Trading volume for NFTs hit $10.6 billion in the
third quarter of 2021, up 704% from the previous quarter.
Facebook and Instagram are finishing a feature
that will allow users to display NFTs
on their social media profiles.
Coinbase will soon accept credit
card payments for NFTs.
This means you don't even have to deal
with crypto in order to buy an NFT.
Some say this is a double edged store.
They don't really like it, but others think
this is awesome news for the average investor,
the average person to get into NFTs.
Now, play-to-earn games.
In Axie Infinity alone, there was $5.5 billion locked
in virtual assets in November in a single game.
Crypto games are gaining traction, they're getting
more fun, they're getting more users, and
they're even gaining popularity on Twitch.
And this is despite the fact that crypto gaming
has only an $18 billion industry market cap.
That's 1/6th the size of DeFi and more than
100 times smaller than the regular video game industry.
Now, what about DeFi?
According to DeFiLlama, the current total
value locked in DeFi exceeds $290 billion.
Now, DeFi 2.0 was a fantastic innovation.
However, it just simply was not user
friendly enough for the average investor.
Now, with DeFi 3.0 things like DeFi as a service,
or just more usability in the space means projects can
appeal to your regular investor who doesn't have the time
to learn the ins and outs of yield farming, or
just anything having to do with DeFi.
Increasing the usability means an increased scope of people
who can use these products, thus increasing the market
cap for DeFi and crypto as a whole.
Then more broadly, we're seeing more and
more institutional investors embracing cryptocurrencies, we're seeing
large corporations adding crypto to their balance
sheets, and countries beginning to accept Bitcoin
as legal tender.
This has largely all happened in the last
year, so it's safe to say that the
industry is moving in the direction of adoption
despite prices declining in recent months.
I think we would be having a completely different
conversation if we couldn't see those darn price charts.
Now, this isn't me saying that you should
dump your entire life savings into crypto, or
that it's some kind of risk free bet.
That's not what I'm saying at all.
I'm just saying actual use metrics seem to be increasing,
and that's what will matter in the long term.
Now, from here, let's talk about how you can
actually make huge profits during the bear market.
There are two strategies that I'd like to
discuss here that I personally use and have
seen a lot of success with.
The first is simply buying the dip.
Now, this is a bit obvious, but you need to be
a little bit more tactful than just hucking your money into
projects and crossing your fingers that the market turns.
Now, in times like the current market,
buying the dip can feel like you're
straight up throwing cash into a bonfire.
I've been buying, and it feels like that.
And this is bonfire that is slowly consuming your home.
But the reality is if you believe blockchain technology is
here to stay and it's here for the long term,
then there's no reason you should believe that prices won't
eventually go up in the long run.
Now, I have no idea where prices are going
to be in the next month, but I do
know that buying Bitcoin today at $35,000 is actually
less risky than buying it at $60,000 in November.
That is if you think crypto
has long term staying potential.
My strategy is to buy the dip and not focus
on the ultra speculative small cap cryptos for now.
Instead, I'll focus on the largest cryptos,
the largest layer-1s that I believe
have the most staying potential.
The simple reason for this is diversification.
Buying a layer-1 is like buying a farm
with 50 cows instead of buying a single cow.
A single cow can die,
or maybe it gets mastitis.
I used to work on a farm, if you can't tell.
But the point is, chances are if you own the
farm, you're not going to lose all 50 cows.
If a layer-1 has 50 projects built
on it, then you're going to be okay.
If one of those projects goes under, and when
money begins flowing back into the crypto space, you
will be the first one to see gains.
Money flowing into the space typically
seems to go in disorder.
Bitcoin first sees some gains, then Ethereum, then
other large layer-1 blockchains, and then smaller
cap projects with potential, and then you see
the speculative crazy type projects gaining steam.
It seems to go in that order most times.
In terms of how much I'm buying,
I've already purchased quite a bit, but
I always leave money on the sidelines
ready to seize any massive dip opportunity.
So let's say I had $1,000 to buy the dip.
I may use $300 today and then buy $100 every
five or so days until that money runs out.
Unless I see a big dip in the market even
further, in which I may double the by that day
to $200, dollar cost averaging will help flatten out the volatility.
If you've gone all in on the first dip
in November, you wouldn't be so happy right now.
Now the good part is you can still make money
with the money that you have on the sidelines.
This is good either to put that cash
reserve to work, or if you're thinking,
buying the dip, that's too risky for me right now.
I simply lend out my stablecoins, always.
With this, you can earn some nice passive income
and you don't have to worry about any 30%
corrections in price because it's pegged to the dollar.
Now, I do most of my lending on Kucoin,
and I'm most familiar with how they do things.
So this might vary a little bit depending on the
site that you use, but on Kucoin they add a
layer of safety by offering an insurance fund.
So let's say you make $100
in profit by lending out USDT.
$5 of that would go to Kucoin for running
the platform, $10 would go to an insurance fund.
This fund ensures that you get paid back if
for whatever reason, the borrower can't pay you back.
Now, I've looked through thousands of transactions
on my Kucoin app and haven't ever
seen the insurance fund actually used.
But it's a nice peace of mind to have in case
that buyer can, for whatever reason can't pay me back.
I've been using Kucoin for about eight
months now and I've personally made over
$24,000 in profit just through lending.
I'll have them linked in the description.
If you want to use that link,
you'll save some money on trading fees.
Now you can also go the DeFi lending
route and lend out something like UST for
a pretty darn good interest rate.
However, it's important to remember that this won't be
held on an exchange, so if you want to
quickly transfer it and buy the dip, there's going
to be a few extra steps in doing so.
All in all, we need to remember
that this is an entirely new market.
It's easy to forget that the price we pay for massive
gains is massive downside risk and we're going to see this
and this is going to happen again in the future.
This is why any purchase I make is
made with the intention to hold long term.
Because I can't guess where the market is
going to head next week or next month.
No one can.
But I can look at sentiment.
I can do my best to understand how
the technology will be adopted and I can
invest based on five and ten year potential.
Now if tracking all of this is too
overwhelming for you, that is totally fine.
You are not alone.
You don't need to over complicate things.
Your investment strategy could be as simple as buying $50
a week in Bitcoin and never looking at the news.
There's literally nothing wrong with that.
Or if you'd like even more up to date insights,
you can join something like my Patreon investment community.
There we have a team of researchers and
investors who do the work for you to
find opportunities and to monitor the market.
This includes updates on anything that I personally buy or sell
as soon as I do it, that will be available linked
in the description for as little as $10 a month.
It really is an awesome deal and
there's a reason that we have more
than 11,000 satisfied members.
Now from here,
if you're interested in lending, I would recommend checking
out this video on screen that goes more in
depth on how exactly it works and I would
like to thank you so much for watching and