August 3rd
DeFi 101

5 Ways to Win in a Sideways Crypto Market

5 Ways to win in a sideways Crypto Market

5 mins read

With the recent price plunge in the crypto market, there’s a lot of FUD especially with new traders. But the fact is, this is no time to skedaddle — there are still ways to win in the market even when it all looks gloomy. The water is always half full, be optimistic!

Here are 5 ways to keep your head up in a “sideways” crypto market:

<text-h2> 1) HODL <text-h2>

A common slang used in the crypto space used to encourage traders not to sell but simply hold onto their tokens (hold on for dear life).

The word originated from a post in a Bitcointalk forum in 2013, where an intoxicated member misspelled the word “hold”. He made a post with the title “I AM HODLING” to signify his decision to hold onto his crypto assets even in the face of price volatility. The word has since then gained massive popularity in the crypto space.

The crypto market is known for its price volatility, one moment, a token price is down 70%, the next, it is up 400%. Bitcoin was once worth less than 10 cents in its early years of introduction, but as of April, was nearly $60K. Even though prices appear to plunge now, the trend over the years shows that there’s a higher possibility of a bounce back.

In cases like this, traders can HODL, as prices may just spring back up. You don’t wanna bite a finger of regret when that time comes.

<text-h2> 2) DYOR <text-h2>

This is a no brainer. This should be at the top of your list of to-dos. Acronym for “do your own research”. It’s just as it states, always do your own due diligence about any project, token, news, DeFi investment or staking activities before diving in. Don’t just believe, but verify yourself!

It keeps you well informed about the current situations in the market. You also get to know which coins are actual timebombs and which are genuine and worth investing in. We’re gonna stress this again, always DYOR!

<text-h2> 3) Liquidity Mining <text-h2>

Here’s another way to keep your head in the game. It has become one of the most popular investment techniques in the DeFi ecosystem. In simpler terms, liquidity mining means providing liquidity to a smart contract via locking or staking cryptocurrencies and earning or “mining” rewards in return.

It involves liquidity providers earning a percentage of fees paid by traders who swap tokens, usually on a decentralized exchange (DEX). In liquidity mining, users provide their assets (for example ETH and DAI pairs) as liquidity to a DEX or protocol. This way, when other users of the same DEX or protocol desire to exchange, say DAI tokens for ETH, there will be enough liquidity available for the trade. You’re then rewarded a % of each swap that takes place, wherein the fees are paid by traders.

Read more on liquidity mining

<text-h2> 4) Crypto Derivatives (CDs) <text-h2>

Opting for CDs appears to be one of the best options in the market today. Already for the first time this year, crypto derivatives (CDs) trading surpassed spot trades at $3.2 trillion. That already tells you something.

In the face of market volatility and price drops, it’s only wise to go for options that would help reduce risks and control trading advanced positions. CDs do just that.

In one aspect, they are financial contracts or agreements between two or more parties based on the future price of an underlying crypto asset. They give you opportunities to take advantage of future price movements of crypto assets and generate more returns.

Read more on CDs

<text-h2> 5) PoS Staking <text-h2>

Another great way to earn with lesser risk. Staking occurs when validators lock their crypto assets as a form of collateral on a blockchain platform or in wallets to earn rewards by validating transactions on-chain. This provides a better means of ensuring network security while requiring very little computational resources (yes Elon Musk, it’s environmentally friendly).

Staking is done in blockchain networks that support PoS (Proof of stake) protocol. What you do is, buy an amount of tokens or crypto in the network e.g. Ethereum, and lock the tokens in the network following the rules set by the network.

Usually, the higher the number of coins or tokens staked in the pool, the higher the number of transactions assigned to be validated and the higher the compensation.

These are some of the ways you can stay winning in the crypto market. Please note that these do not count as financial advice in any way. You are still responsible for doing your own research and ultimately making the best decision you find suitable.


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