Is Crypto in a Bear Market?
A bear market is when a market goes through extended price falloffs. In traditional markets and crypto, it basically refers to a period when assets lose over 20% of their value from their recent highs amid extensive distrust and negative market sentiment. Bear markets can be cyclical or longer-term. Cyclical bear markets last for several weeks to a few months, while longer-term bear markets last for some years to decades. Is Crypto in a Bear Market? It is evident crypto is in a bear market. We can’t hide the fact that crypto markets are experiencing a rough year. How long this period will last is not known. However, we are very bullish on the long-term future of crypto. As mentioned, a bear market refers to a market that has lost over 20% in a given year. Bitcoin has shrunk by more than 40% in 2022, Ether over 55%, and most altcoins are down by more than 60%. The crypto sell-off was ignited by a broader slump in stock markets, particularly technology stocks. The blood path was fueled by the collapse of Terra Luna and the UST stablecoin. Assuming you have lost a large junk of your investment this year, you can potentially use DApps to make money in a bear market. How to Make Money in a Bear Market? While bear markets might be stressful for investors, they present good entry points to buy assets at discounted prices. Based on your risk tolerance level, you can profit from a bear market by betting on the overall market trend, making presumptions on micro-trends, or holding and generating passive income. 1. Shorting Shorting or short selling is the opposite of purchasing an asset and anticipating its value to increase. Here, you start a short position at a higher price and close it at a lower price, hence buying low and selling high via high frequency trading. 2. Generating Passive Income If your risk tolerance is low and you are not familiar with advanced trading techniques, you can survive in a crypto bear market by holding assets that generate passive income, such as staking and exchange coins. Staking coins guarantee 5-10% annual returns, while exchange coins offer multiple benefits on exchanges like minimal fees and profit-sharing. 3. Swing Trading Swing trading exploits short-term price movements in an asset’s chart instead of considering the bigger macro trend. In a given upward or downward movement, there will always be small hills and valleys in the price charts. You can make money from these short-term movements by buying the dips and selling the peaks.
Asked 3 months ago
Can You Resell NFTS?
An NFT or Non-Fungible Token is a blockchain token representing real-world assets like art, real estate, music, pictures, collectibles, in-game items, and videos. Representing such assets in NFTs streamlines the processes of buying and selling them and eliminates counterfeits. The term non-fungible means NFTs have unique features that distinguish them from each other. Cryptocurrencies are fungible, implying you can exchange them at equivalency, like Euros or shares of a company. For example, when you give a bank cashier some Euros, he gives you dollars equivalent to your Euros. NFT tokens are the opposite – each token is unique and can’t be replicated. In other words, you can’t trade or exchange NFTs at equivalency. Can You Resell NFTs? Yes, you can buy or resell an NFT from another holder or creator. As a matter of fact, that is their appealing point. Blockchain technology records and timestamps the ownership history of NFTs. Therefore, you can view all the previous owners dating to the NFT creator. Though most of the NFTs involved in the biggest cryptocurrency art sales haven’t been sold or even advertised for auction, there’ve been successful flips. For example, Reflection NFT was sold in March 2021 for $98,500 and resold for $872,500 on the Rarible marketplace two weeks later. The secondary market for buying and reselling NFTs has undoubtedly grown at a rapid speed. Crypto Art states that the market has drastically increased in the number of users and sales in the last four years. How to Buy and Sell NFTs You can buy and sell NFTs on NFT marketplaces. Some of the best NFT marketplaces include Rarible, OpenSea, SuperRare, BinanceNFT, Nifty Gateway, Foundation, Axie Marketplace, BakerySwap, NFT ShowRoom, and VIV3. Now, before buying any NFT, you should answer these four questions first: What secondary marketplace do you plan to buy your NFTs from?Which wallet does the marketplace support? Which crypto do you need to fund your wallet with to complete the transaction?Are the NFTs you intend to purchase available at a specific time, for instance, through a pack or art drop? By the way, some NFTs are only available on specific marketplaces. For instance, if you intend to buy NBA Top Shot packs, you must sign up with the NBA Top Shot platform, download a Dapper wallet, and fund it with USDC. Here is a step-by-step guide on how to buy and sell NFTs on OpenSea: 1. Download a web3 wallet and fund it. 2. Navigate to the OpenSea platform and browse the available NFT collections. 3. After finding the NFT you want, click “Buy Now” or “Make an Offer.” 4. Make the actual purchase. 5. To sell your NFT, click the “Sell” button on the top right. A new page will pop up for entering your sale conditions.
Asked 3 months ago
What Is the Meaning of an NFT Drop?
NFT is a blockchain token representing real-world assets like art, collectibles, music, pictures, in-game items, real estate, and videos. You can buy and sell them on secondary markets using digital currencies, and they are generally programmed with the same software as cryptocurrencies. The meaning of an NFT is Non-Fungible Token. Non-fungible here implies that it's unique and cannot be replaced with anything else. For instance, Dogecoin is fungible since you can exchange one for another Dogecoin and get precisely the same thing. However, a one-of-a-kind trading card is non-fungible as you can't replace it with something else and get the same thing. What Is an NFT Drop? An NFT drop refers to the public release of an NFT project. In this case, a drop describes the precise date and time of release and the minting price of the token. Most NFT drops have buy limits to control the number of NFTs buyers can mint in a transaction. Buying at drop time is like buying crypto at a bear market/discounted prices. NFT drops are becoming more common as sports personalities, brands, and businesses discover the benefits of blockchain technology. How Do You Find NFT Drops? Twitter is the best platform where you can find NFT drops early. Many artists and influencers market their offerings on Twitter since it's the most sought-after networking and advertising social media channel. Typically, the bigger the fan base of the project creators, the higher the project's credibility and perceived value. You can still find NFT drops on other social media channels like Instagram, Facebook, YouTube, Reddit, and Clubhouse. Besides, you can also find NFT drops early through instant messaging (Discord), word of mouth (from friends and personalities), Metaverse (all the virtual worlds, like Decentraland), secondary marketplaces (OpenSea, SuperRare, etc.), and crypto podcasts. How to Prepare for an NFT Drop? 1. Creating a powerful story Any project launch requires founders to tell a compelling story to build credibility and hype. 2. Choosing a blockchain and secondary marketplace wisely Every NFT marketplace provides various benefits and has unique users. Therefore, before releasing your NFT drops, consider the available options, identify where your potential customers are, and prioritize the project interests over your own. 3. Create a smart contract for your NFT A smart contract is a self-governing code for executing sale agreements that runs on a blockchain network. 4. Build a strong community army A strong community will help hype your NFT drop and excite potential investors. 5. Make sure your website is prepared to receive high traffic Strengthen your website to avoid crashes during release. 6. Create long-lasting value and innovate constantly If you want people to continue to promote your offerings, you must create lasting value and innovate constantly. As you give your investors value, others will see your NFT as a good investment and develop a deep interest in participating in your project, increasing the value of your NFTs.
Asked 3 months ago
Why Borrow Crypto?
Why should someone who owns some cryptocurrencies want to take a loan on their crypto assets? Why can’t they sell some of their holdings instead of using them as collateral? Well, here are five reasons for borrowing crypto: Save money: When you opt to take a loan against your crypto assets instead of selling them, you avoid tax liabilities and service fees inquired during selling and withdrawing.Hold Onto Dear Life (HODL) – Borrowing enables you to meet your immediate financial needs without selling assets you intend to hold for a long time. Earning while holding – As you hold your crypto assets in a DeFi protocol, you can use your loan to diversify your investment portfolio and mitigate investment risks.Turning the loan upside down: Lending protocols like CoinLoan allow you to earn interest on your digital assets through the CoinLoan Interest Account. Avoiding borrower’s risk: Crypto loans minimize unnecessary delays and eradicate the need for credit checks and related paperwork. You simply deposit your crypto assets as collateral. Can You Borrow Crypto Against Your Own Crypto? You can borrow crypto against your own crypto. In fact, this is the basic principle of cryptocurrency lending and borrowing. Crypto loans have a straightforward process compared to traditional loans. You qualify for a loan based on your crypto collateral. The Loan-to-Value (LTV) ratio is the amount of your loan in relation to the value of your collateral. For example, if you want to deposit crypto-worthy $50,000 in a DeFi protocol as collateral to qualify for a loan of $25,000, the LTV ratio is 50%. As you can see, cryptocurrency loans have low LTV ratios because of the crypto markets’ volatile nature. However, each DeFi protocol has different criteria for borrowing and lending. For instance, what you need to borrow crypto with Compound, will vary compared to Binance, Kucoin, or other popular exchanges. What Are the Risks of Borrowing Crypto? Here are the main risks of borrowing crypto: Custody and security risks – Since DeFi lending platforms are not regulated like traditional banks, you must fully trust them when depositing your assets in their protocols. In this regard, you risk losing your assets through rug pulls and hacks. Risk of platform insolvency: The deposits (including collateral) are not insured in crypto lending and borrowing. Therefore, you might lose your locked assets if the platform becomes insolvent. Volatility of crypto assets: If the value of the asset you borrowed gains and exceeds your collateral, you risk being liquidated. But this does not mean you shouldn't borrow crypto. Since the pros outweigh the cons, you can borrow crypto - especially if you are a long-term holder.
Asked 3 months ago
What Do You Need to Borrow Crypto With Compound?
Borrowing in Compound involves depositing some crypto to act as collateral. In other words, you will be taking a loan against your crypto deposit. Traditionally, when you borrow money from any financial institution, it conducts a personal financial background check to establish your credit worthiness. But since DeFi is anonymous and can’t conduct such checks, Compound provides over-collateralized loans to avoid debt and bankruptcy. How Do Interest Rates Work When You Borrow Cryptocurrency with Compound? Compound Finance connects lenders and borrowers through smart contracts built on the Ethereum network and rewards paid in crypto. A Compound lender is anyone willing to lend their crypto assets by depositing them on a Compound wallet to generate rewards. A Compound borrower is anyone who locks crypto in the Compound protocol. They are permitted to borrow digital currencies offered by Compound at a percentage of the locked value. Compound calculates the interest rates based on the supply and demand of each cryptocurrency. Besides earning interest on your cryptocurrency, Compound enables you to borrow more assets through the cTokens you receive every time you lock assets in its protocol. Furthermore, you can trade these assets in other decentralized applications (DApps). Currently, Compound supports BAT, DAI, ETH, REP, USDC, WBTC, and ZRX borrowing. Whenever you lock crypto in the Compound protocol, new cTokens are minted. If you want to borrow assets using ETH as collateral, you will be issued with cETH equivalent to your locked ETH. Remember, you can get liquidated if the cryptocurrency you borrow gains value and exceeds your deposited collateral. On the other hand, Compound rewards lenders with COMP tokens based on the amount of cTokens available in their wallets. Is Borrowing Crypto on Compound Safe? Compound borrowing and lending involve depositing some funds to act as collateral. For this reason, Compound users often ask this question: Is borrowing crypto on Compound safe, and why borrow crypto via Compound? Since its launch in 2018, Compound hasn’t experienced any security breaches. It has proven its authenticity by allowing public access to its smart contract to third-party auditors and consultants who put significant efforts into establishing a safe and reliable protocol. For instance, OpenZeppelin and Trail of Bits have done several security audits of Compound and obtained official certification from Certora. Therefore, we can technically conclude that borrowing crypto on Compound is safe.
Asked 3 months ago
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