The truth is that millionaires are created in bear markets, not...

83 views Dec 29, 2024 ~5 min read

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The truth is that millionaires are created in bear markets, not bull markets. 

The majority of crypto "influencers" will simply tell you to "buy the dip", but this advice isn't actionable.

🧵: Here's a practical guide to surviving a bear market (with strategies). 👇

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2/ Most people who made life changing gains in 2021 did so because THEY were the ones buying during the 2018-2020 downtrend.

I'll cover:
• My accumulation strategy
• How to leverage the power of DeFi to set up your portfolio for success
• Building a winning portfolio

3/ In a bear market, your focus should be on surviving and accumulating.

It isn't the time to be speculating on micro cap alts, but you can still set yourself up for success with the right portfolio.

Here are some bear market portfolio examples:

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4/ The projects outlined in those examples are interchangeable (some of my favourites aren't included). 

Your focus should be on having % weightings which mitigate downside risk.

Credit to @thedefiedge who inspired this thread. He puts out great DeFi content.

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5/ You define your own risk tolerance based on your:

• Financial goals
• Crypto exposure
• Personal conviction

Regardless of your holdings, the universal takeaway is that you should have a sizeable stablecoin position at all times. How?

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6/ Replenish stablecoins by:

• Taking profits on holdings during pumps
• Farming stablecoins
• Taking yield farming profits back into stables

Let's break down exactly how to execute these 3 strategies. 👇

7/ Firstly, taking profits during pumps.

I have a simple rule: If an investment doubles, take your principle out. That way you're riding "risk free".

Currently, I'm taking 50% of my profits into stables, and the other 50% into #Bitcoin.

x.com/milesdeutscher…

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8/ With those stables, you want to be generating passive income. I like $UST because you can earn 20% on @anchor_protocol.

Some other good options:
• aUST looping on @planet_finance (30-40%)
• Stable pools on @beethoven_x (35%)
• @Platypusdefi (up to 20% on USDC)

9/ I recently teamed up with @Don_key_finance to create a stablecoin farm (it's paying 30% right now).

We update weekly based on new opportunities. It's a one click copy + auto-compounds.

Note: This strategy is more degen (only use small %).

don-key.finance/dashboard/farm…

10/ My third accumulation strategy is via leveraging DeFi yield.

Take a % of your profits from yield farming into stables along the way.

Here's 3 profit taking strategies for different market phases

• Bullish = market low
• Bearish = market high
• Mixed = unsure

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11/ Aside from "profit taking", earning passive income is CRUCIAL. It ensures you have a continuous flow of income to buy dips. 

I break it down into 2 categories:

1. Passive income from crypto (DeFi yield farming)
2. Passive income from outside crypto

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12/ Passive income FROM crypto is vital. Yield farming during a bear market is optimal. 

Farmers love down markets because they are:

• Accumulating more tokens at lower levels, thus
• When prices recover, they profit two-fold as they're stacking tokens when prices are low.

13/ Use a tool like @0xCoindix to scout for the best yields.

Secondly, keep your eye on Twitter and YouTube for new DeFi opportunities. I post many of my strategies across YT and Twitter.

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14/ The mistake many investors make is not taking advantage of yield farming.

Why keep your tokens sitting dormant in a wallet when you can use them to generate yield?

If you're holding tokens that can't earn income, then make sure you have conviction in those assets.

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15/ Here's the honest truth most "influencers" won't tell you: Passive income OUTSIDE of crypto is even more crucial.

Optimise your net income via:
• Starting a side hustle or new business
• Progressing in your current career
• Stocks/real estate
• Cutting expenditure

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16/ That way, if the market dips you continue to have a consistent flow of income coming in.

This gives you buying power to take advantage of dips, and takes pressure off the market.

Increase income outside of crypto > Increased buying power > Enhanced gains during the bull.

17/ If you're passionate about crypto, there are many opportunities to build a career in Web3.

This industry is providing a once in a lifetime chance to build generation wealth, similar to the early days of the internet.

x.com/thedefiedge/st…

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18/ People often forget this when the market is bearish.

When the market's down, that's actually the time to be dedicating yourself, not the other way around.

Bear market = grind szn
Bull market = chill and take profits

Your effort should have a reverse correlation with price.

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19/ The best way to learn and stay consistent in a bear market is via collaboration. 

• Get involved in Discord/Telegram groups
• Create your own research group and schedule regular calls to discuss ideas/market.

It's much easier to learn with others than it is alone.

20/ So, now you have stables, income, and resources at your disposal. The question is when to buy?

Don't catch a falling knife.

The safest method is to adopt the dollar-cost-averaging approach.

DCAing is a consistent system of capital deployment, regardless of market price.

21/ DCAing is great, as it lowers your average buy price over time as the market dips. BUT, not all DCAing is created equal.

I only deploy significant $ on very red days. When the fear & greed is bottoming, and everyone on Crypto Twitter is angry/depressed: That's when I deploy!

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22/ There's nothing wrong with taking small nibbles after minor corrections, or when TA looks favourable.

As long as you're keeping at least 25% in stables and are generating passive income, you'll have enough dry powder to take advantage of extremely red days.

23/ Once you've bought, staying on top of your portfolio is equally challenging (especially when morale is low).

Here are 2 additional threads on this topic to help you out:

Building a portfolio: x.com/milesdeutscher…

Managing a portfolio:
x.com/milesdeutscher…

24/ @SoundsTricky came up with this bear market checklist which can help you stay on track.

These 10 principles should be staples of your DeFi journey.

Here's us explaining each principle in more depth in video form: youtube.com/watch?v=A8LPUA…

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25/ Bear markets are challenging, but if you follow these steps, you're significantly increasing your chances of success (not financial advice). 

99% of crypto investors fail. Be apart of the 1%. 

Remember: Millionaires are made in the bear, not the bull.

If you enjoyed this thread, please give the first tweet a like and retweet. 💙

x.com/milesdeutscher…

The truth is that millionaires are created in bear markets, not...

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