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It’s a crypto bear market and they want to steal your picnic basket!
Should you buy the dip? The price of Bitcoin has fallen over 70% from its 2021 all-time-high, and the entire crypto market has lost over $2 trillion dollars. Crypto maximalists aren’t scared. They continue to buy the dip. But what if the bottom isn’t in yet?
We get it, you’re scared a hungry bear will eat your lunch. So you’re waiting to see if Bitcoin backslides even more. Here’s the thing: it’s so hard to time the market, not even the pros can do it. But if the past is prologue, right now could be an incredible opportunity you might not want to miss. Should you buy the dip or wait? Here’s how to handle Bitcoin in bear-country on a platform like CoinSmart.
A downturn becomes an upswing
Bears attack, but they can’t kill crypto, certainly not Bitcoin. Despite the carnage, it’s still up 14,589.44% from its earliest known price. If the best predictor of future behaviour is past behaviour, Bitcoin will recover again. And so will the traditional markets. Don’t miss the comeback. You can buy Bitcoin quickly and easily on CoinSmart, one of the best trading platforms in Canada.
When Bitcoin launched in 2009, it began trading at just a fraction of a penny. At the time of writing, it sits at just about $26,000 CAD. Over the last 13 years, the price of Bitcoin has dropped an average of 70% on 7 different occasions. It bounced back every single time and went on to reach new highs. Don’t let the recent downturn scare you off. History is the best bear repellent.
Before you buy the dip, be aware of the investing environment
Every single market is down, that’s just the lay of the land right now. To put things into perspective, the S&P 500 is down over 20%, and the NASDAQ is down over 30%. Even bonds are taking a beating and moving in the same downward direction as stocks for the first time since the 1970s.
Every market is deep in bear country, not just Bitcoin. Why? Inflation, interest rate hikes, a war, and sustained supply-chain issues are fueling FUD (fear, uncertainty, doubt). There’s a lot of static out there. The CoinSmart platform offers tools, resources, and the GetSmart Hub to help you cut through the noise and get smart about crypto.
Regulated crypto platforms help you behind the scenes
Bitcoin is not doing anything out of the ordinary, it’s responding to the current economic environment. But when the going gets tough, paper hands fold. For the first time ever, Bitcoin is subject to the same major economic events pummeling the traditional markets.
Investors are selling off higher-risk investments in favour of safer ones. Right now, the crypto market is acting a lot like tech stocks. Bitcoin remains speculative, and therefore risky because it’s still gestating. It makes sense that we’re seeing a big sell-off during such uncertain times.
But major institutional investors and better regulation are moving the needle in the right direction. CoinSmart is one of those companies. They’re a fully regulated cryptocurrency exchange platform and a publicly traded crypto company. CoinSmart embraced regulation in the fight to normalize crypto and create a safer trading environment for investors.
Use Bitcoin as a defence mechanism if you buy the dip
Time in the market is better than timing the market. We don’t know if the bottom is in, but we do know Bitcoin is on sale right now. If you’re not sure what to do, like buy the dip or wait, why not do both? You can still invest right now without losing your shirt if things get worse. It all comes down to risk tolerance; only invest what you’re willing to lose. That could be $100, $1000, or 1-5% of your portfolio.
Decide on a number you’re comfortable with then stick to your guns. If you buy the dip and Bitcoin keeps dipping, your financial security won’t go down with it. In fact, if Bitcoin dips further you might want to buy more. Why?
Bitcoin is the OG crypto coin. It has the highest market capitalization and dominates almost half of the entire cryptocurrency market. In a bear market, avoid alternative coins. They’re more likely to go belly up. Bitcoin is at the top of the food chain. It’s not going anywhere anytime soon, and you can get it on CoinSmart.
Feed your portfolio, not the bears
Historically, bear markets are the best time to invest. Why? Because a stock market crash is almost always followed by a longer, stronger bull market. Not only has the traditional market made a full recovery from several major crashes, but those who bought while prices were down enjoyed better returns than those who didn’t.
Bitcoin is no different. An investing strategy called Dollar Cost Averaging (DCA) is a great way to invest for long-term growth during market volatility. When you dollar-cost average, you invest money in smaller chunks at regular intervals over a longer period of time.
If the price of Bitcoin continues to fall, you won’t suffer as much loss as you would have if you invested a lump sum. Stick to your DCA strategy and you’ll continue to buy Bitcoin at a better and better price on the way down. CoinSmart is one of the best platforms for DCA investors because of the low trading fees.
Buy low and sell high when the market returns to normal
Fear, uncertainty and doubt (FUD) attract bears like bacon over a campfire. Don’t run! Play Dead! Hold on for dear life! The best investing strategy is a long-term play, especially during a bear market. We don’t know if Bitcoin has already hit the bottom, or how much further it has to go. Either way, we’re in for a bumpy ride. For the savvy investor, that’s actually a good thing.
When investors think the economy is in trouble, they sell their stocks and other risky investments in search of something safer. That drives Bitcoin and the stock market lower. Smart money buys when markets are on sale, but it can take a while for prices to rebound.
That gives you more time to accumulate Bitcoin while it's undervalued, but the road to recovery can be quite a rollercoaster. The volatility is nauseating but worth it if you stay the course. If you’re afraid you might panic-sell if prices head south, choose a non-custodial platform like CoinSmart. You can transfer crypto into your own private wallet, making it that much harder to cave and sell if bears attack.
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About The Author: Heidi Unrau
Heidi Unrau is the senior Finance Journalist at Hardbacon. She studied Economics at the University of Winnipeg, where she fell in love with all-things-finance. At 25, she got her first bank job as an entry-level teller. She moved up the ranks to Credit Analyst, Loans Officer, and now a Personal Finance Writer. In her spare time, you'll find her hiding in the car listening to Freakonomics podcasts, or binge-watching financial crime documentaries with a pint of Häagen-Dazs. When she's not chasing after her two little boys, she's in the hot tub or arguing with her husband over which cash back card to use for date night. She’s addicted to coffee, crypto, and obsessively checking her credit score on Borrowell.
Fun Fact: Heidi has lived in five different provinces across Canada, loves her free Tangerine bank account, and will never cut back on Starbucks. Like ever.
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