How to Make Money in the Bear Market

If you are an old-school, financially conservative type you already know the difference between stocks and bonds as asset classes. Stocks are essentially small ownership of companies. They are volatile but present you a higher Annual Percentage Yield (APY) generally 8–12% when invested in a good index fund. Bonds are essentially loans. They are thus lower risk because large companies and governments are sure to give you your money back. They are also good because you know exactly how much money you will make each year. Their APY’s are agreed upon before you buy the bond but it’s usually never as high as the stock market unless the stock market crashes. What if I told you, you could make 10% of your investment by simply loaning your money? Here you would be gaining the stability of the bond market while getting a yield that is consistent with the stock market? Sounds too good to be true?

To most people yes, but let’s say you are a crypto investor and these APY’s don’t even make you bat an eye. If you’ve been in crypto for a while, you must have made some pretty sweet gains over the past 12 months. But chances are that you were flying higher a month or two ago when Bitcoin was almost double the price it is at now. Some are bravely calling this the bear market. I don’t know if that is the case. For all we know, this could just be a temporary pause and we might continue to go up. However, I want to point out that if not today then tomorrow, a bear market is inevitable. If you’ve been here in 2017 you will recall when Bitcoin went up from $700 to $20,000. At that time, it felt like the ship had sailed. This is what most people in crypto were feeling: “the world was finally realising the potential of Bitcoin! It’s never going to stop now! It will keep going up! Sell all your possessions! Mortgage your house! Go all in on Bitcoin!”. Heck, even 2–3 months ago, a gazillion of my friends were messaging me because they felt the same way again. But if you followed Bitcoin post December 2017, you remember the 2 year bear market known as “Crypto winter” by the veterans, where Bitcoin reached lows of $3,000 and then again in the COVID flash crash. My intention is not to scare you but to share that all things that go up must come down. Bitcoin may or may not be in a bear market now but those times will also surely come. This is not something I wish for, but just a truth that we must all accept that we are participants in a very volatile market. But what if I could give you a solution that would be almost completely risk free and ensure that you secure a passive income stream of 10% annual interest? I know what some of you are dying to yell at me through your screens, “What about Yield Farming?!”. Let me give you some reasons why Yield Farming is not the right option for you if you are searching for stability, low effort and close to zero risk. But first a tldr; for my impatient readers (don’t worry I’m one of you too), the product I will be talking about is ShuttleOne where you can gain 10% APY on your stable coins or fiat. Now let me go back to explaining why Yield Farming may not be for most people:

Disappearing Teams

It is incredibly easy to launch a token on the Ethereum mainnet or the Binance Smart Chain thanks to the Ethereum Virtual Machine. It was built for this use case. This is great, but it also means that you also get a lot of shady teams launching shady projects. You could literally launch a project within minutes and then provide liquidity on a Decentralized Exchange (DEX) like Uniswap or PancakeSwap and your project would now be live for the masses to buy. This is great but here’s how people abuse it:

An anonymous team creates a token and launches it on a DEX. They then attract a lot of retail liquidity providers by promising an astronomical APY. As more people lock in their funds, their token gains liquidity. This gives the anonymous team an opportunity to sell their own position leaving the retail liquidity providers holding a project’s token whose team has disappeared. More often than not, these projects then die out and their tokens go to zero.

Contract hacks

Cryptocurrencies are unstable. We all know that. And I hope we all know that we should be investing most of our wealth into big and highly reputable projects like Bitcoin, Ethereum and Polkadot. But to gain a high yield on their Yield Farming initiatives, users are pushed to smaller and newer projects by newer teams that promise a much higher yield than users will get simply by providing liquidity to the Ethereum/USDT pair on Uniswap. This would be all good if you weren’t also exposing yourself to hacks. After reading my previous point if you believe that you are safe in Yield Farming simply because the team is not anonymous and will not disappear you are wrong. Writing smart contracts is a new skill that not many people know. Because of this the cryptocurrency world suffers from hacks. Just this year we have seen hacks in crypto projects like Alpha Homora, Yearn Finance, PAID Network, Spartan DeFi and I’m sure many more that I do not know of.

Impermanent Loss

When users provide liquidity on a DEX like Uniswap or PancakeSwap, they are not ensured that the prices of their assets on the DEX will match the prices on a large Centralized Exchange (CEX) like Coinbase. Due to this, they may temporarily lose some value on their assets, which becomes permanent if users move their assets out of a liquidity pool without checking the prices. A problem with Yield Farming is that users are encouraged to find higher and higher yields due to all the DeFi craze and FOMO that is going on on YouTube. So increasing number of users are going in and out of several pools without thoroughly checking prices.

Time & Stress

Do you recognize the guy in the picture above? He’s a billionaire Mark Cuban. How about the guy in the picture below? — Multi-millionaire Kevin O’Leary.

What’s a similarity between these two? They are both Yield Farmers. They have teams helping them find the best yields. Kevin O’Leary has also invested $20 million in a DeFi project that will help him ensure his Yield Farming profits. Sounds exciting? Yes, for them. If you want to compete with the whales who have a lot more monetary as well as human capital than you, get ready to put in some long hours. Not to mention, the DeFi degens in Telegram groups (I know a few), who are doing this 24/7. Yield Farming can give you some really good profits but you will have to more than pay for it by renting out your mental head space and sleep.

Fees

This one is not true for all chains but certainly true for at least the Ethereum mainnet. Just a few months ago, smart contract interactions on the Ethereum blockchain were costing at least $50. They are down now to $10 but who’s to say this won’t go back up if the hype goes back up too. Additionally, $10 transactions over tens of transactions per day over several days also really do add up. And unless you are investing a large amount and reaping hefty rewards from it, this will hurt your Metamask wallet.

The cryptocurrency markets are volatile and risky. Much more than I, or any other sane participant would like. Do you really also want to make your passive income source equally volatile and risky?

If not, the easiest alternative is Shuttle One. Here’s how they do it:

When you put your money in the form of stablecoins into Shuttle One’s lending platform, instead of using these stablecoins for liquidity or Yield Farming, Shuttle One uses this as capital for businesses to borrow money to fund their logistics operations at a fixed annual interest rate of higher than 10%. Shuttle One slices some profits from this loan and returns the rest to the user. But what about the business defaulting on their loan you might ask?

This is where the magic of Shuttle One’s leading blockchain solution comes to play. Through blockchain operations, Shuttle One is able to tokenize the assets a borrowing company buys as NFT’s. Instead of the assets being delivered straight to the borrower, they are delivered to Shuttle One and are either released or liquidated depending on if the borrowing company pays or fails to pay respectively. Shuttle One is currently operating throughout South-East Asia and has thus developed trust and relationships with big players in the logistics space. They also have fiat on and off ramps in 80 countries and are growing in revenue at a fast rate.

Using Shuttle One, you can get 10% on your stablecoins, not on some new asset by a new team that may disappear or have their cryptocurrency crashed. You also get the best of both worlds by getting a steady 10% per year to match stock market index returns while having a stability comparable to bonds. Find out more and participate here!

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://angad17.medium.com/the-easiest-stable-passive-income-source-e39d6c8c78d5?source=rss——-8—————–cryptocurrency