My Bear Market Approach to Making Millions of Dollars in Crypto

Some people tend to think that it's super easy to make money in crypto. A lot of people approach the bull market and look for ways to just buy in and sell out quickly for a profit. These are typically the people who get crushed when the bear market inevitable comes around.

Right now, Bitcoin is trading at $24,129. Up from the recent lows of ~$16k this past year.

BTC got beaten and battered along with the rest of the crypto industry in the wake of a slowing economy + FTX and many other crypto firms blowing up.

The news hit a lot of people by surprise. Some of us have been around for multiple cycles and are now somewhat accustomed to crypto tanking out of nowhere. Others.... Not so much!

Bear Markets and How to See Them Coming

The biggest question that people ask is how do you see a bear market coming? How do you know when stocks or crypto are going to crash? How do you make profits when everything is going to shit?

The answer: you can't.

If you could see a bear market coming, you'd be the richest man or woman alive. You'd simply say "hey a bear market is coming. I'm gonna short everything" and then you'd print billions of dollars.

That's how Mr. Market works. You don't know when a bear or bull market is going to happen. I don't know. Nobody knows.

Instead, a multi-faceted approach to building a portfolio must be taken. We need to remove emotions from investing and look at long timeframes.

My Bear Market Approach to Making Millions of Dollars in Crypto

I don't believe that the bear market is over just yet. Does that mean BTC will tank back to $16k tomorrow? Not necessarily.

My statement simply means that I don't know if we're going to start trending up or if we've had some short-term relief and will then see things trend back down.

It's always impossible to tell. What we can tell is how we can approach different market environments.

One of the biggest lessons I've learned in crypto and investing in it is to have a strategy built-out before something actually happens.

We're in a bear market right now... You should have a strategy prepared for the bull market NOW. Don't wait till the bull market hits to come up with a strategy. Come up with it NOW. You are not trustworthy to make good bull market decisions when a bull market is here.

Similarly, you are not trustworthy to make good decisions when a bear market is here. Your emotions are tangled. Your intake of information is alongside everyone else.

Making good decisions is about preparation as much as it is about good judgement.

In this bear market, I have the same strategy I deployed last bear market. It made me millions of dollars.... and now, it's going to repeat history.

The Steps to Success

I am writing this to you as much as I am writing this to myself. Keeping your plan in written format and looking at it regularly will help you adhere to it.

We are not trustworthy, remember? We need to preset conditions and make financial decisions when we are rational. We are not rational in the moment, but we can be hyper rational when we step back and look from afar.

Step 1). Dollar Cost Average into BTC and Other Projects

Simple, right? You don't buy-in all at once. You continue to buy over long time periods. When BTC dipped below $30k, I heard a lot of people say that they were buying as much as they could because they didn't think it could go lower.

I didn't take that approach. I made my strategy before the bear market hit. I started dollar cost averaging into BTC as soon as it went below $30k.

This means that I was slowly buying Bitcoin. I didn't take all my dry powder and whip it into the market like an idiot. I methodically turned on the faucet and I've been buying BTC on a consistent (weekly) basis ever since.

If you want to also build out a portfolio with more fringe exposure - I like to do this with a % of my crypto portfolio - then you can also apply the same strategy to other assets. I've been doing it with a small % to assets like RUNE, HIVE, ETH, LEO, CUB, etc.

Step 2). Have a Way to Survive

Okay so now your dollar-cost averaging. You need to make sure that life doesn't get in the way of your DCA.

hey that rhymes!

You need to be able to pay your bills to survive. If you are forced into selling your crypto before the bull market hits, then all of this is for nothing. To make sure you can do this, take a hard look at your budget and take a hard look at how you earn money.

The Crypto industry has evolved so much over the years. During my first bear market cycle, there wasn't a whole lot to do when the bear hit. We had to just kind of sit tight and HODL.

Today, you can earn crypto on platforms like Hive & LeoFinance. You can deploy assets in DeFi and earn yield. You can deploy assets like BTC into Collateralized Vaults and take on loans to pay your immediate expenses.

All of this utility has made it EASIER THAN EVER to not get sidetracked during your DCA plans.

That's the goal:

1. DCA
2. Don't F*ck It Up

I've written a few other posts and even put up a few videos talking about my collateralized BTC strategy.

Instead of selling crypto to survive, I DCA pretty much all of my income into BTC. Then I deploy that BTC to a collateralized loan vault on MakerDAO and take DAI debt against it.

I then use that DAI debt to pay my expenses. This may be feasible for you if you have a good income to expense ratio.

Income to Expense Ratio

So here's a simple formula: 2x Income -> 1x Expenses.

Loan vaults can vary in terms of how much they let you borrow. My vaults tend to allow me to borrow up to 50% the value of my collateral.

So if my expenses per month are $10,000, then my income needs to be $20,000 in order to 100% DCA into BTC and then take a big enough loan each month to pay my bills.

So let's just use these round numbers as an example:

• I make $20,000 this month. I buy $20k worth of BTC
• I deploy $20k worth of BTC into a MakerDAO vault and I borrow 10k DAI
• I take the 10k DAI and convert it to $10k USD Fiat
• Then I pay the bills

Now I'm, left with $20,000 worth of BTC and 10k in debt that I need to pay back at some point. My interest rate is roughly 3.5% APR.

So BTC needs to appreciate more than 3.5% per year in order to cover just the interest on the loan. That's relatively given for BTC in long timeframes.

Let's also just assume (to keep things easy) that BTC is $20k right now.

So I have 1 BTC and $10k worth of debt.

If/when BTC gets over $50k, I now have $50k worth of BTC and still $10k worth of debt. I sell $10k worth of my BTC collateral to pay off the debt and now I can withdraw the $40k and do whatever I want with it.

If I didn't do this - and let's assume all the above numbers are the same - I would've paid my bills with $10k and then taken the other $10k and bought Bitcoin.

I then would have $10k worth of BTC (0.50 BTC) and $0 worth of debt.

When BTC eventually reaches $50k, I would have $25k (0.50 BTC) and $0 worth of debt.

• Example 1 has me putting in $20k, using 100% to buy BTC and taking a $10k loan to pay expenses
• Example 2 has me putting in $20k, using 50% for expenses and 50% for BTC

In Example 1, I walk away with $40k in my pocket

In Example 2, I walk away with $25k in my pocket

Crazy how that works, right? It's a concept you need to wrap your head around and really think about. You are essentially making a bet that BTC is going to be higher in the future. Instead of buying less BTC so you can pay your expenses today, you are buying more BTC and taking a loan to pay your expenses today. You are planning to pay the loan when BTC is higher in the future since you believe it will appreciate over long timeframes.

The rich do this with land in the real world. They own property or stocks, etc. and borrow against them. They live off that money and know that their assets will appreciate more than the interest rate + amount they are borrowing each year.

Questions? Leave them down below. I keep writing articles about this topic because of all the feedback you guys have given me that you're interested in more details on how this all works, why I do it, etc.

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