5 Metrics to Monitor Before Investing in Crypto During a Bear Market

Cryptocurrency Recession

The cryptocurrency industry didn’t get off to a great start this year. Unfortunately, despite the best hopes of many investors, things have only gotten worse. Industry analysts are predicting a long crypto winter, but we all know bears thrive in the cold.

If you’re planning to invest during this market downturn, here’s what to know before buying cryptocurrency in 2022.

Practical Applications

The most bullish investors on the market don’t really care about the practical applications of cryptocurrency. In a bear market, however, the practical applications of cryptocurrency are what will keep some assets afloat while others sink. Take Ethereum, for example. The Ethereum blockchain supports smart contracts, which should keep its value relatively high even when cryptocurrency bulls see it as a volatile investment.

A Competitive Advantage

Having a competitive advantage is important for every asset in the cryptocurrency market, especially in a bear market. For example, the crypto blockchains that can execute transactions faster and more efficiently will always have an advantage over others in the industry; XRP is a good example.

Cash Reserves

How Cash-rich is the project? Does it have the resources to hide away during the oncoming crypto winter and survive until the weather clears? Assets with strong cash reserves will probably prove to be better long-term investments.

A Road Map

In a market as competitive as this, it’s important to always think ten steps ahead. The best investments usually have a game plan and stick to it regardless of the external market conditions. Take Lucky Block, for example. They only launched earlier this year, but the blockchain lottery platform already has ambitions of future merchandise, NFTs, and even an app. A road map is always a good sign that an asset has longevity as a potential investment.

After Winter Ends

Nobody is looking forward to a crypto winter. Still, if and when it does come, these investment tips about what to know before buying cryptocurrency in 2022 should help you choose your next investment wisely. If you play your cards right, your crypto portfolio will weather the storm and come out looking better than ever.

Sources

https://www.forbes.com/uk/advisor/investing/cryptocurrency/what-is-crypto-winter/

https://www.coindesk.com/layer2/2022/06/15/crypto-winter-is-here-the-weak-will-die-and-the-strong-will-eat-their-bones/

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