What even is a ‘Bear Market’?
A bear market is essentially a term used to describe a prolonged period of time in which a market is experiencing declines most often from a recent market high.
So what does this mean when it comes to DeFi?
Cryptocurrency can be extremely volatile, we have seen all time highs and lows and as a newcomer it can be a bit difficult to navigate these massive ups and downs, and even at times the smaller swings that come with the market.
Crypto enthusiasts and avid traders agree that you need to make rational decisions during these times. Meaning, reduce the amount of influence your emotions may have on your trading habits. Utilizing foresight to make better timed trades can be extremely beneficial during these times. As well as the number one guiding principle, to always trade within your means. No matter what anyone tells you or hyped you are on a project, always trade in amounts you feel comfortable with.
All this to be said, how does Nova help newcomers and experts alike in bear markets?
By utilizing the following tools:
- Dollar-Cost Averaging - Maintaining the discipline of buying crypto each month so as gradually increasing exposure to crypto is difficult & time-consuming. Nova’s DCA tool (Dollar Cost Averaging) allows investors to slowly and automatically increase their investment exposure diversifying over time with reduced risk.
- Diversified Portfolios - Diversification, if done well, lowers risk while at the same time increasing gains. Nova lets you do this, when creating a portfolio you can purchase multiple assets & auto-deploy multiple yield strategies at the same time, this diversifies investment exposure to the Solana ecosystem.
- Strategy Diversification - It's very complex & time-consuming to manually execute more than one investment approach, for this reason, most investors are over exposed to one investment strategy. When creating a portfolio on Nova, you can program it to auto-execute multiple investment strategies. This means you aren't over exposed to one approach to investing.
- Automate & remove emotion - In volatile markets emotions are high and can knock people off their investment plans. Computers have no emotion, they always execute the rules they've been instructed. With this in mind, we built features that allow you to programme assets to auto-buy, sell or adapt to changing market conditions.
- Automated Yield - To find & deploy the best yield available for your assets is time-consuming, especially if you rebalance your portfolio regularly. For this reason, Nova's portfolios are designed to auto yield on its assets, no asset is left idle. That is, say you deployed our DCA (Dollar cost averaging) strategy, your dollars + crypto will both automatically yield
For confident investing (people looking to heavily invest during the bear market dip) the following might be of interest to you:
- Tokenized portfolios - With a tokenized portfolio you have maximum interoperability. That is, you can receive a collateralized loan against your portfolio, utilities yield opportunities or just about anything else the DeFi ecosystem has to offer for your portfolio tokens.
- Leverage - for those with more confidence in their investing skills, bear markets can be a great time to buy crypto at discounted prices. With Nova, you can mint what we call "n-assets" a token that represents the underlying value of your investment strategy - e.g, mint a dollar-cost averaged Solana token, dcaSOL for short. n-Assets can mint USD-H, an over collateralised stable coin built & designed by our partners at Hubble. The USD-H you mint can be re-invested into your portfolio & enable up to 7x more exposure.