Prepare the bear

tarazkp (84)in LeoFinance • 4 years ago

An interesting conversation came up, where I mentioned that out of the 4-plus years I have been in crypto, the majority of it has been spent in a bear market. The difference between bull and bear can be quite extreme, but during a bull, a lot of people act as if it is going to last forever, forgetting that the bear will return and do very little in preparation. If the goal is for sustainability and development of income streams, it is important to prepare for the downturns as well.

The discussion came up in regards to the increasing prices and the recent 30% pullback, as one of my friends was saying he never thought he would be firstly so emotionally affected by the ups and downs and secondly, becoming increasing resilient to them. I mentioned that while technically I could live off crypto under the current conditions, since three-quarters of my time in crypto has been spent in a bear market, I am very hesitant to "celebrate" too soon.

When the market crashes there is a voice in the back of my head saying, "crypto winter is coming, again" and I should have sold. The bull markets are easy, but there is a fear that I missed the opportunity to create an adequate foundation to survive the bear. However, I am in the process of changing my outlook and position to account for the bear market, by hopefully setting up tools to keep ticking enough, even if at a far lesser rate than currently.

A few people have mentioned how young people who got into crypto recently with the likes of Doge and made a killing are driving some industries, like house prices in some areas. However, even if this is the case (I don't think there are enough to have a marked difference) and they are doing very well, what will their position look like at the depth of the next bear market, are they prepared for the rainy days, or are they having a lot of very sunny days during the bull? I suspect that many are out enjoying the sunshine, paying little heed to the coming winter.

This happened a fair bit through 2018 when prices began to tumble, as some people had decided at the height of the bull market that now they are ready to go all in on crypto - but living off crypto at the peak is quite different to living off crypto when it is 95%+ down. A lot of the people who had confidently asserted that they had "made it" fell silent, because there was no backup plan for the overextension of the new lifestyle and a lot of those who went this way, ended up draining all of what they had accumulated.

Of course, "In it for a good time, not a long time" can be argued, but I think most would prefer having some stability or some floor on the standard of living, rather than constantly being at the whim and fancy of volatile markets. However, to be able to build some kind of platform, requires thinking ahead as to what is going to adequately provide revenue streams. There may still be a reduction in lifestyle, but it doesn't have to go from boom to bust.

One of my plans for this is DeFi pools where I am able to park some of my tokens and keep earning a passive income from them, while still supporting the growth of various crypto aspects. However, I have no idea what these pool returns will look like at the bottom of a bear market. This sounds like "tomorrow's problem" but in order for a small return to be adequate later, a larger amount of capital has to be accumulated.

Over the years I have talked about sunshine people, those who are only around when conditions are good. However, the people who are able to work in the rain and adverse conditions tend to be the ones who will benefit the most later. But, when the sun is shining, there are those who head to the beach to take advantage of the weather and those who make hay instead. Obviously, there is room for a hybrid approach, but I think that if the bears are often twice as long as the bulls, it is good to think about improving experience in the other two-thirds of life.

For me personally, I am planning to keep working various jobs for life, even though I hope to not have to work for the money. However, what I am planning to do is set up a process where my value held can work for me, so that if times do get very difficult in the world, I am never completely reliant on any single source of income. While I might end up stocking shelves at the supermarket, I will still be able to pay my bills and live a relatively comfortable life. This means being a little uncomfortable now though.

What I wonder for many though is, if people are largely impatient and value the maximization of experience in the now over preparation for the future, what is going to happen when the bear markets return? I suspect there will be a lot of disgruntled people as there always have been, though they will be surrounded by a lot of "stuff" that they could have afforded earlier, albeit, now worthless stuff.

I believe that those who did prepare for the future, will likely have a far more even experience as while the dips come in and possibly are quite extended, they will not have to reduce their lifestyle much at all, as they have chosen a middle ground, rather than a polarized position of peak and trough.

It is is up to each of us to design our lives and each to live the life we have. Some people make decisions for a, live now and what will come will be, approach, while others attempt to have some control over their "destiny". As said, I want to try and get into position for a more stable experience that might not see a massive amount of peak, but will not fall deep into the troughs.

I know from my own experience, crypto winters aren't fun and staying consistent in the rain is difficult. For the uninitiated, it is a great experience that they will not want to repeat. For the sunshine only people, they don't know what it is like as they disappear into hibernation until the sun comes out again - missing many opportunities along the way.

There is so much opportunity in crypto still to come and it is going to take decades to come close to being realized, but if in the bull markets people live life large to the point they never build a base for themselves, a lot of the individual potential they have will be lost. At some point of course, value has to be realized and used to improve quality of life, but considering at what point and to what extent that will be takes consideration. A lot of that consideration comes from experience gained from hardship, which is why those who have seen the worst of life, are often more reserved in the best it has to offer - because they don't want to go all the way back to the start each cycle of the market.

Let the good times roll in perpetuity.

Taraz
[ Gen1: Hive ]