5 ideas to limit REKT during a bear market

The DCA

This is probably the best known technique and one of the most appreciated by long-term investors. DCA or Dollar Cost Averaging is a simple and relatively effective way to invest small amounts of money on a continuous basis to smooth out your investment. Whether the market goes up or down, the goal is to regularly buy a fixed amount in order to increase your starting capital while limiting the risks associated with buying a cryptocurrency at once.

Staking or Masternodes

Participate in the decentralization of a blockchain and its development by being rewarded for it. To put it simply, staking cryptos means locking a given amount of tokens to participate in the proper functioning of a PoS (Proof-of-Stake) blockchain. By doing so, staking crypto allows to collect interests. It is possible to perform staking directly from a wallet for some cryptos, but also from trading platforms such as Binance and Kraken to name a few, or to mutualize the staking of crypto-currencies via pools.

Confusion between staking and masternode can happen quickly, and for good reason: both allow you to generate passive income via crypto-currencies and require you to lock in tokens to earn interest on them. But as we've just seen, running a masternode differs from staking since it requires a significant investment in hardware but also solid technical knowledge. Another difference: staking allows you to participate in the network by validating transactions, which is not the case with masternodes. The latter are a complete copy of the blockchain. The management of a masternode being more complex than the staking of crypto, the rewards are generally higher. However, beware of projects with too high an ROI (return on investment). The lure of gain can quickly turn into disaster!

Security Tokens

As their name suggests, security tokens represent a reserve of value of a movable or real estate asset. Before putting your earnings in security tokens, it is important to understand what a security token is. Issued from a blockchain, what can also be called an investment token is a way to acquire financial assets. However, security tokens cannot really be called securities. In the United States, the SEC (Securities and Exchange Commission) has decided to use the Howey test to differentiate a security token from a utility token. The tokenization of financial instruments is supervised in France by the AMF (Autorité des Marchés Financiers).
In terms of fundraising, if ICOs are experiencing a decline in popularity, STOs (Security Token Offerings) are attracting more and more attention. Offering the means to invest in a company, an STO has advantages over an ICO such as being regulated. However, the acquisition of tokenized financial securities does not guarantee profits and should be done with caution. It is an investment intended to be made over the long term.

There are 3 types of security tokens:

● Shares: where you acquire ownership rights that may even pay dividends or a share of profits. This can be represented by an option or a position in a publicly traded company via shares.
● Debt: Debt represents an obligation to repay a loan. This can be issued by a government or corporation where effectively the buyer lends money to the issuer in exchange for rights to receive interest payments and, at maturity, its principal. Government bonds, mortgage-backed bonds, and corporate bonds are all examples of debt securities.
● Hybrid: A type of security that combines characteristics of debt securities with characteristics of equity securities.

Stablecoins

Be careful with stablecoins though. As you will have understood the advantage of stablecoins is their stability against another asset to which they are backed. Putting aside the tragic incident with the Terra Luna UST, the majority of stablecoins in circulation perform their function normally.

There are different classes of stablecoins:

● The fiat-collateralized Stablecoin (USDC / USDT / GUSD...)
● Crypto-collateralized Stablecoin (DAI)
● Non-collateralized Stablecoin (AMPL)
● Algorithmic stablecoins (UST / RAI / FRAX)

In addition, some stablecoins can be backed by gold such as PAX Gold or Tether Gold to name a few. They will then follow the evolution of the gold price thanks to oracles. Nothing indicates that its price will remain constant. On the other hand, gold can be a way to diversify your portfolio.

It is possible to do lending with stablecoins through a decentralized platform like Aave to keep a minimal return.

NFTs

NFTs are a sensitive subject. And this is also the reason why this alternative solution is only very little recommended or to the most crowded exchanges...
It is difficult to invest part of your capital in such young assets that fluctuate due to many parameters. However, if you look closely at some of the most coveted collections, they remain solid investment pillars such as Crypto Punks, BAYC (Bored Ape Yach Club) and their derivatives, Azuki, Doodles, World of Women etc...
Investing in an NFT hoping to avoid a crash remains a risky operation, as we have seen the interest in the NFT market has waned in recent months, this is also why it is essential to study the collections in which to invest before launching.
Who could have predicted the resounding success of the Punks 5 years ago? If you are a soccer fan, for example, you can collect soccer cards on Sorare. If it is possible to make profits by reselling collectible cards or tokenized artworks, NTFs are still marginalized to secure one's crypto gains, as their value is not necessarily guaranteed over time.