The unstable macroeconomic situation and the collapse of Terra provoked a deep crisis in the cryptocurrency industry. The negative dynamics were reinforced by the problems of large companies that were on the verge of bankruptcy.
CoinEx is an exchange that survived the crypto winter of 2018-2019 and became part of the ViaBTC Group ecosystem. Together with the platform, we talk about three ways to make money in a bear market.
Short positions in the futures market!
Short is a position to sell a financial instrument, which allows you to make a profit even when the market falls.
How does it work? The user borrows an asset from the exchange and sells it at the market price. When an asset becomes cheaper, a trader buys it and repays the debt at a lower rate.
He earns on the difference in prices – selling on the open market and buying to pay off a debt.
When opening a short position, always pay attention to potential losses: they are endless, and profit is limited to the zero price of the asset.
Losses can be minimized using a stop loss order that will automatically close a position when the price moves in a losing direction.
In addition, you should consider:
- funding rate — the difference between prices on the spot and futures markets. Depending on it, users pay or receive rewards for open positions: with a positive rate, longs pay shorts, and with a negative rate, vice versa. The mechanics is aimed at achieving market price parity: this is how traders close and open positions more often;
- short squeeze probability — rapid price growth with an excess of short positions in the market. Their elimination creates additional demand and leads to a further increase in prices. Short squeeze is a common occurrence in markets with low liquidity.
Historically, all markets, including cryptocurrency, predominantly growing. However, the absence of stop losses and trading with high leverage can lead to liquidation of the position after the bears leave the market.
If you do not want to risk money in the futures market, then you can invest with a small stable return to accumulate cryptocurrency and prepare for a new bull cycle.
The most common tools for generating passive income:
- flexible and fixed deposits. The platform uses the funds to issue loans and credits the owners with a share of the profits as a reward. Profitability depends on the site and demand for lending services;
- liquidity pools on decentralized exchanges like OneSwap. Members are rewarded for providing liquidity in the pool currency. Returns can be very high, but the volatility and low liquidity of many tokens can reduce real returns in the long run.
Deposit services are widely represented in the cryptocurrency market. They are provided by landing platforms, crypto-financial companies and centralized exchanges.
In the first case, they receive a fixed income: at the time of publication, the 7-day APR of the Tether landing page is 2.36%. In the second, they share 50% of the trading commissions of AMM users among themselves.
As a rule, they are launched by projects that want to create a community around their products and services.
The main requirement for participation is the presence of an audience in social networks. Ambassadors spread information about the company and receive rewards: part of the referral commission, salary or payouts for content – training videos, explainers and memes.
“Ambassador programs are one of the surest ways to make money in a bear market. You get paid for sharing your experience of trading cryptocurrencies, and your earnings depend not only on the number of attracted users. Many platforms pay users to create useful content or help organize custom events,” comments the CoinEx team.
Members of the CoinEx Ambassador Program receive up to 50% trading commissions from referrals of referred users for an unlimited time. The amount of remuneration depends on the trading volumes of referrals.
In addition, the platform has a futures program until October 25: ambassadors receive up to 60% referral commissions, as well as funds for trial trading in futures and CoinEx merch.
Users with 3,000 followers on social networks such as Twitter, TikTok, YouTube, Instagram or Telegram, as well as community administrators with more than 500 followers, can join it.
To participate in the futures program you need:
After the application is approved, CoinEx will send a letter with detailed instructions for the ambassadors.
The crypto industry offers various ways to earn income, from active trading in the spot and futures markets to passive income in lending services and DeFi protocols. The relevance of many of them will increase with the onset of a bear market.
Futures trading will suit more experienced traders, and beginners will be able to invest in financial products and receive passive income.
Influencers can monetize their influence on social networks by participating in ambassador programs and earning rewards for content.