Nolan Bauerle, director of research at CoinDesk, believes that 90% of current cryptocurrencies will not survive a drop in markets. Those that do survive will dominate the game and increase profits for early investors. Like all cryptocurrencies, Ethereum remains speculative. Investing in crypto is a risky endeavor, so it's important to only invest money that you can comfortably afford to lose.
It's impossible to predict which cryptos will survive a bear market.
Bitcoinhas managed to stay afloat in all bear markets and has recovered quickly when things turned bullish, making it a de facto safe haven with no space if we count stablecoins. Unfortunately, volatility is unavoidable in the cryptocurrency market, but you can structure your portfolio with the goal of selecting cryptos that can survive the bear market. High transaction values indicate that cryptocurrency is in constant circulation, which corresponds to high liquidity and efficient price discovery.
If you stretch your budget or borrow money to buy a cryptocurrency and the market falls, you may find yourself unable to cover daily costs. There are hundreds of platforms around the world that offer access to thousands of cryptocurrencies, but it's difficult to determine which ones will survive a bear market. Increased regulation could have a significant impact on cryptocurrency prices in the short term. The cryptocurrency market is cyclical and prone to severe, unexpected volatility.
Gold-backed cryptocurrencies often have a trusted central entity behind them, creating a single point of failure. If you're willing to take more risks for potential rewards over time, it could be the right cryptocurrency for you. Crypto asset returns have been well above those of stock markets for the past decade, with Bitcoin greatly outperforming both gold and the S&P 500 over the past 10 years. Ethereum is already a major player in the crypto space and could grow even stronger in the coming months and years.
Cryptocurrency prices can be affected by even minor changes in the industry. When selecting cryptocurrencies that will survive a bear market, it is best to consider their asset classes and financial metrics such as market capitalization, liquidity, circulating supply, and traded volume. Blockchain metrics such as hash rate, number of active addresses, and transaction values and fees can also be accessed from various websites.Most people treat cryptocurrencies as speculative assets without realizing that these currencies are tied to real projects with blockchain solutions aimed at solving real-world problems.