Crypto Bear Market Guide for Investing in 2022

A crypto bear market, or crypto winter, is a prolonged period of time during which relatively few investors are interested in investing in this space. By extension, many ventures close down due to a lack of funding combined with a low response rate from users.

For those looking to make money in the crypto space, bear markets present an opportunity to stack up great deals on holdings and increase risk management. However, a failure to learn how these markets work can be financially damaging. In this article, we’re going to dive into what makes up a bear market, how sophisticated investors navigate them, and how you can position yourself for success too!

The crypto world has been riding a roller coaster over the last few months, and the market is still recovering from the tragic effects. Most cryptocurrencies are experiencing massive price drops, but many projects have spun off the wheel and are barely surviving. Here are some other exciting developments that have occurred despite the chaos in the market.

In response to a regulatory crackdown, Celsius suspended withdrawals from US accounts, triggering the downward trend. After the UST and Luna crash in May 2022, the crypto market lost $300 billion in market capitalization altogether, resulting in a loss of just over a billion dollars. As a result of the Luna collapse, Celsius believes its eventual crash was a “domino effect.”

The Ukrainian war in February 2022 roused all the events to unfold. Global markets suffered a puncture and shed much blood (dollars). In the past year alone, more than $9 trillion has been wiped out from the US stock market. Crypto markets moved along with the stock markets, as is customary. The global markets are dominated by Ukraine and Russia. Vibrations reverberated throughout the world as the two shook.

War-inspired interest rates have been rising at the federal level. Interest rates are one factor that has a direct and almost immediate impact on the crypto market. During the first meeting of the Federal Reserve in 2022, BTC fell 6%. There have been a lot more increases in interest rates, all having negative effects on the high-risk crypto market.

Cryptocurrency ban plans from China and Russia also sparked negative sentiments. However, these crypto-costly events should be avoided. These dark times haven’t stopped some amazing developments from happening. Here are a few of them.

Bear markets inspire projects, adoptions, initiatives, partnerships, and prosperity for those that take advantage of them. As a result of these developments, this will be proven.

Vitali Buterin, Ethereum co-founder, has proposed non-transferrable NFTs linked to human identities in the midst of decline and market-unfriendly events. A Soulbound token engraves every human’s achievements and identity on the blockchain indelible.

CoinDesk.com reports that the service will provide socially verified reputations by navigating the trustless and pseudonymous nature of Web3.

A development that involves NFTs or other aspects of the blockchain world is inadvertently related to cryptocurrencies. As part of WMG’s partnership with OpenSea, select artists will be able to customize their landing pages on OpenSea. With tailored templates, they can create limited edition NFTs, tell their stories uniquely, and much more. Through their collaboration with OpenSea, WMG facilitates the creation of these communities by unlocking Web3 tools and resources and providing artists with greater access, engagement, and ownership opportunities.

In order to accommodate cryptocurrencies, RobinHood has opened up its stock investment platform and shifted away from its “walled garden” approach. Using the Polygon blockchain, the RobinHood wallet facilitates no-fee transactions, swap-trading, and imports previous wallets. There are currently 11 cryptocurrencies listed on it.

Through indirect acceptance, Walmart enters the crypto world. When you purchase Bitrefill and Coinsbee with crypto, you can use the gift cards from Walmart to purchase items.

The launch of Walmart Land on the Roblox platform also marks Walmart’s entry into the metaverse. “It has a physics-defying Ferris wheel, unlockable tokens, an interactive piano walkway, and a DJ booth for users.” It has many festivals with YUNGBLUD, Madison Beer, and Kane Brown performing. Several characters from Jurassic World, Magic Mixes, Paw Patrol, etc., are incorporated into the “immersive experience.”

In spite of the bear market sending investors back to the base, we have seen an enormous amount of funding in the last few quarters. Crypto start-up raised $30 million from a teenage founder. With Sony and Kirkbit leading the round, Epic Games raised $2 billion. Among the other notable funding rounds are Circle and Lithosphere, each raising $400 million, and Crusoe and Near, each raising $350 million. Solana Coral raised $20 million and LootMogul raised $200 million in smaller investments.

The Russian government has approved crypto for cross-border payments, contrary to its initial opposition. The country will enforce anti-money laundering laws and require proper KYC from exchanges and wallets that operate within its borders.  As a result of the influx of Russians into the country, Kazakhstan will also legalize crypto.

The French government just approved Crypto.com, a major crypto marketplace. The past few months have seen a lot of countries adopt crypto and discuss CBDCs to convert currencies to digital.

In order for crypto to become mainstream, partnerships are crucial. Introducing the unfamiliar requires the familiar. Teaming up with Web3 brands is essential for IRL brands and other traditional businesses. Christiano Ronaldo has partnered with Binance to create NFTs. Additionally, FIFA has partnered with Algorand to provide a “blockchain wallet solution”. FTX partnered with Reddit, Virtuozone partnered with Binance, and Ripple partnered with Travelex.

With its move from a proof-of-work consensus mechanism to a proof-of-stake consensus mechanism, Ethereum paved the way for environmental sustainability in crypto. This move will reduce its energy consumption by over 95% and may inspire other blockchains to follow suit. Many expected the merger to save the market, but it didn’t. Nature definitely deserves the credit for saving it from a great deal of decline.

A major move into crypto by a traditional brand is that of Starbucks. Starbucks has launched its loyalty program on the Polygon blockchain using the NFT. With Starbucks Odyssey, customers will be able to access rewards and other immersive experiences through stamps in the form of NFTs. Its web app allows users to purchase collectibles without needing cryptocurrencies.

Using linearly scalable blockchain technology, Shardeum allows lower transaction rates per second. As one of its most iconic features, it sustainably offers low gas fees. It supports Ethereum-based dApps and is fast and energy-efficient.

There are many headlines of crypto-related news every hour, making it difficult to keep up with everything. Despite the adverse market conditions, adoption is accelerating and the industry is opening up. Both blockchain and its extensions, as well as the Web3 movement they ushered in, are here to stay.