Surviving the Crypto Winter: Your Ultimate Bear Market Guide
The market always bounces back, that’s it. No manual exists about how the economy will behave but always remember that it will correct itself and come back stronger.
At the moment, there is a lot of uncertainty in the crypto space and many investors are concerned about what that means for their crypto investments. Looking at factors such as Bitcoin (BTC) being in its official correction territory, the unrest in Ukraine, surging inflation, and issues with the globe’s supply chain, most people worry a full-blown crash is imminent.
As the AIWORK team, we would like to reiterate that nobody knows for certain how the market will behave five minutes or a week from now. However, there are a few steps we have been taking when a downturn arises and they make it easier for us and our investors to weather any crypto market storm.
Weathering the Storm
Rebuilding Investor Confidence
This piece of advice goes to companies that are finding it hard to keep investors morale on the up and up. You first have to realize that your investors come first and despite the challenges of managing the day-to-day business operations, the current downturn calls for an aggressive but thoughtful approach of bringing back shareholder confidence from managers. As you work to rebuild their confidence, ensure that behind the scenes you have distinguished between temporary and fundamental problems affecting your company’s token price.
We recommend these steps to get investors back on board.
Improve Communication
For the crypto projects just joining the game, please understand that during economic downturns, silence will always exacerbate investors’ fears about worst-case scenarios. New investors, especially the ones that came in during recent peaks, will have a few unanswered questions and maybe different views about the future direction of the company. Do not ignore their opinions, many have legitimate concerns that management needs to address.
Refocus Company Strategy
Look into prioritizing segments and business lines that are performing best despite the downward market trend to help bring profits and revenues quickly. Also, be on the lookout for new revenue sources that can accrue with little investment.
Signal Confidence to Stabilize Price
Management needs to ensure that their financial transactions send signals to the market about their confidence and optimism about their token. This means that the team wallet should reveal only signals of confidence by not selling their holdings and if they do so, they should pre-announce the reason behind the intended token sale.
Retain Talent
Focus your efforts on retention and enhancing worker confidence in the company. Don’t put your company in a position where top employees start leaving; this will lower shareholder confidence. Good managers regularly communicate with their employees, come up with flexible policies such as working from home, or issuing token options to employees.
Acquire Talent
Compared to euphoric markets, downturns bring with them a better chance to hire top talents that might leave the competition who might be cutting their technology investments and implementing across-the-board cuts.
Delay Secondary Coin/Dex Offerings
The volatility that the crypto space experiences makes investors cautious so any fresh round of coin or DEX offering in public markets during tough economic times is perceived negatively. You are better off using internal funds or borrowing money than issuing further tokens to public markets.
Downturns are Temporary
The crypto market has faced numerous corrections and crashes over the years and it has always managed to recover from even the most severe crashes. Yes, it might take a few months for the market to rebound fully but you have to hold on strong because it will bounce back eventually.
Maintaining a long-term outlook when investing is the key to riding out the storm because deep down you know that even the strongest coins may take a hit when the market dips but in the end they will recover. To give your investment the best chance to survive volatility, avoid any knee-jerk reactions and stay focused on the long term.
They Present a Smart Buying Opportunity
This period of volatility might break a few hearts and keep investors on their toes but it is a great chance to load up on quality coins and tokens that you missed out on for a fraction of the price. You should embrace market downturns as they present the best opportunities to invest heavily. When the market inevitably rebounds, you will see substantial gains from the investments you make at the low points.
AIWORK’s Plan of Action Going Forward
Waiting it out and buying low are not enough to reap the rewards – you have to choose the right project to invest in. Not all coins are strong enough to recover from downturns, which is why we always advise newcomers to look into projects that have a valid business idea. Our underlying fundamentals make us a strong business with a strong token to invest in coupled with a competent leadership team, a competitive edge in the video content industry, and healthy financials. Choose the right project to invest in and set yourself up for success regardless of the direction the market takes.
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