DataDrivenInvestor: When Will the Bear Market End? Macro 101 for Crypto Investors
The last bull market in cryptocurrencies hit amid a perfect storm. The pandemic shut down many communal activities. Many were given stimulus checks. But markets remained open. That create a surge in traders across all financial assets, just as a crypto rally was getting underway.
The end result? A massive flood of first-time investors. They poured into everything, but many small cryptos soared as influencers were able to direct some capital into these small projects.
However, the party didn’t last long. Rising inflation led to the start of a rate hike cycle. And the crypto market hit its mid-cycle peak. But, once all the money that was going to flood into crypto had gone in, there was nowhere to go but down.
Looking at the flip side, investors today should be looking at when the current bear market for crypto will end. It’s hard to tell. There’s still massive regulatory uncertainty. And it isn’t being helped by a hostile SEC and other regulatory agencies.
But, for those who look at sound risk management, such as diversification and small position sizes, it may be possible to win out in this space yet again. It will also mean taking a long-term view. And positioning ahead of the next bitcoin halving in 2024.
That can help investors be in the right place at the right time. And not blow up their crypto portfolios along the way.