In a bear market, we see the price of assets decreasing and becoming a downward trend. This is a natural part of the crypto climate, just like it also happens in the global economic market. Where there are highs, there are also lows.
There are a number of reasons as to why market prices might go down. On a global level, supply and demand have a huge influence over asset prices such as oil and energy demands, the availability of materials and precious metals. Macroeconomic stress also plays a role in the health of the economy, and we can often see the decline reflected in times of war, high unemployment and inflation spikes.
Crypto trends tend to be more volatile and, along with supply and demand, can also be influenced by things such as a major hack, sudden loss or bankruptcy in a prominent company, or even an influential twitter post.
When we see a downward trend in crypto we say that the economy is unfavourable, yet here will be some insights into how you can still make the best use of Summer.fi, regardless of the market.
What happens in a bear market?
In a bear market crypto value prices decline from recent trends and continue downward, investors simultaneously lose confidence. During a bear market there will be more supply than demand from investors, as investors sell assets and market pessimism is more prevalent (where users have less desire for taking risks). As a result there is a decrease in on-chain activity with less trading and liquidity than is seen during bull runs. While investors may sell or just hold assets while the markets seem “unfavourable”, users may also settle for stablecoins, as like DAI, they do not directly reflect market volatility like other cryptos.
How can I earn on my assets during a bear market?
The Summer Earn product was built for you to be able to earn on your assets, no matter the market. Using this self-custody solution allows you to put your deposits in a position to earn a yield where you will always be in control. Learn more about Summer Earn.
You can also explore the AAVE stETH/ETH Earn strategy that expanded Summer Earn in October 2022. You can use AAVE stETH/ETH to get extra exposure to stETH by multiplying your exposure to PoS yields with ETH. This data chart shows the stETH trend which has consistently shown steady, albeit gradual activity since it was introduced, despite the ongoing bear market. Read more about stETH.
Automation features are also one of the strongest resources for users on Summer.fi as they help you manage your vault position, and execute your predetermined strategies automatically. By setting trigger parameters, automations allow users to protect and optimize their position.
- Protect: from liquidation and exposure to lower prices with Stop Loss and Auto Sell.
- Optimize: the maximum exposure to price rise and to take profit with Auto Buy, Constant Multiple and Take Profit.
You can find more information about automations in our Knowledge Base.
Bonus: there are three advantages to using stETH and ETH through Summer.fi
1. stETH / ETH doesn't care about USD price
2. If you already have ETH you can use this strategy irrespective of the USD price
3. WSTETH-B has a stability fee of zero. Plus you also get a yield on the underlying ETH with WSTETH-B
The long-term picture
Regardless of the market, you can still earn on your assets with Summer.fi. We are always building for the long term, the high and the low. We care about the long-term mission, and focus on building products where you can earn no matter the market.
Keep your eye out for new products and features as we have many new things coming this year in 2023!
If you have any questions regarding Summer.fi in general, you contact us at firstname.lastname@example.org or on our social media.