Why the Bear Market is the perfect time to get started in DeFi

It was December 15, 2017.

The Oklahoma City Thunder defeated the Philadelphia 76ers 119 to 117 in a game that took more than three hours and three rounds of overtime to decide.

It was also the day that Bitcoin stood at $17,801.94 — a record at the time. Many analysts expected Bitcoin to climb even higher, but by the end of 2017, the world’s most well-known decentralized cryptocurrency was hemorrhaging value. The so-called “Crypto Winter” extended into spring, summer, and fall, and by December 15, 2018 — exactly one year later — Bitcoin was trading at less than $3,200.

“Crypto was dead,” many declared. Jamie Dimon, CEO of JPMorgan Chase, had already declared Bitcoin to be a fraud “worse than tulip bulbs.”

But by June 2019, Bitcoin’s value had swelled to almost $12,000. By January 2021, $40,000. By November 2021, $64,000.

In retrospect, Dimon’s criticism seems entirely shortsighted: the speculative increase in the price of tulips never materialized again. However, with each downturn in crypto markets, investors have returned.

Crypto fortunes are made when prices are low — not high

As true believers in the promise of DeFi, it’s easy to expand our holdings when the market is running “hot,” but the truth is that most fortunes are made when buying low. Standing in our way is a basic tenet of psychology called pattern recognition, which describes the preference for predictability over chaos.

In other words, in a bull market, we expect gains to rise predictably (tempting us to buy more), while in our current bear market, we expect prices to continue dropping (tempting us to remain on the sidelines).

Give not into temptation. As inflation coupled with fears of a recession batter stock and crypto markets alike, opportunities are growing for savvy holders to jump in before the rebound takes shape. Doubling, tripling, or even quadrupling the value of your holdings is easier today than it was just a few months ago. (Bonus: Market downswings lower the barriers-to-entry for new participants which, in turn, advances Bridges’ goal of attracting groups that have historically lacked equal access to traditional finance products.)

The proof is in the math

Prior to the May collapse of TerraUSD and Luna, doubling the value of your holdings in Bridge$ would have required a $0.28 increase in the price of our token. Today, doubling your holdings requires less than a $0.04 increase. Or put another way — in May, to have purchased $100,000 USD worth of Bridge$ would have required $28,000. Today, it requires less than $4,000.

“It’s a good time to buy” is what folks started to say when talk of another “Crypto Winter” began to circulate. And it’s an especially good opportunity if you’re relatively new to crypto, or if you’ve been planning for some time to take the plunge.

This advice of this author? Expand your knowledge and know-how by checking out the recently launched Bridges Knowledgebase. Learn the basic rules of safety when it comes to navigating DeFi, and engage members of our community with any questions that will help you in getting up to speed. Here at Bridges, our mission is to make the future of finance work for everyone. That includes you, and we stand ready to share why we believe the future of finance is… Bridges.

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