How this crypto exchange helps users navigate the bear market

With the growing popularity of Bitcoin and other volatile cryptocurrencies, high-risk investors have flocked to the asset class, hoping to profit from the market’s large and sudden swings. Traders have been riding this rollercoaster for years, with the total market capitalization of all cryptocurrencies rising from around $200 billion in 2020 to $3 trillion last year. This year, however, things look very different.

The Web3 market lost around two-thirds of its value in 2022, but despite this catastrophic drop from all-time highs, cryptocurrency traders are soaking up the heavily discounted prices. According to the blockchain analysis firm Glassnode, investor sentiment around cryptocurrencies has never been more bearish, and mentions that various factors made 2022, especially the month of June, the worst period ever recorded for the world’s largest cryptocurrency.

Volatility is not exclusive to cryptocurrency markets, but digital assets are far more accessible than other risky investments. Volatile markets are the easiest places for beginners to lose money, and understanding how to trade safely, what makes a risky investment worthwhile, and how to define a project’s value is critical.

What the bears taught us

Cryptocurrency markets are considered a largely unregulated area where anything goes, and no one is held accountable. Of course, this isn’t exactly the case, with governments and financial regulators constantly looking for ways to improve how digital assets are traded. However, this bear market has highlighted some of the lesser-known risks of cryptocurrency trading, especially those that tend to be overlooked by beginners.

2017’s ICO craze had already educated society about the dangers of investing in projects without solid fundamentals. But even though initial coin offerings have evolved into the more sophisticated initial exchange offerings, fraud still runs rampant in this area. According to a report released by the Federal Trade Commission, since 2021, over 46,000 people claim to have lost more than $1 billion worth of crypto due to fraud.

From pump and dump projects to shady marketing tactics, the lack of universally sound regulation allows scammers to thrive here. However, that’s not the only way you can lose your money. Cryptocurrencies can be particularly volatile, but investing in anything carries some risk.

A report from Immunefi revealed losses worth over $670 million in Q2 2022, up 52% ​​from 2021’s $440 million in Q2 losses. Many projects aren’t exactly scams, but you can’t trust your money. Cryptocurrency lending bank Celsius was recently found to be marking customer deposits as unsecured loans, preventing unsuspecting users from withdrawing money after Celsius lost customer funds in risky trades.

Last year, Crystal Blockchain reported that over $4 billion worth of crypto was lost to exchange hacks, with many smaller exchanges failing to implement the security measures expected of platforms with this much value. Blockchain technology was created to take back control from financial institutions, preventing third parties from coming between people and their money. Trusting unregulated projects like Celsius that bring centralized banking concepts to crypto has its risks, but so does trusting code.

The recent crash of the Terra UST algorithmic stablecoin was a stark reminder that while people may be incentivized to act maliciously, smart contracts have no allegiance or sense of morality and can easily be exploited by malicious actors to the tune of billions. UST’s implosion caused ripple effects across the blockchain arena, even bringing the industry’s poster-child venture capital fund, Three Arrows Capital, to its knees.

However, the world of cryptocurrencies is not all gloom and doom. Not all exchanges are incompetent, not all crypto banks are fraudulent, and not all code deployed to the blockchain is easy to exploit. Crypto was built from an anarchist agenda, but not all projects vote against regulation. Phemex, for example, a fully regulated cryptocurrency asset management and derivatives platform with over 5 million clients worldwide, believes regulation may be the only way forward.

Grabbing the crypto bull by the horns

Bear markets can be difficult to deal with, especially if you don’t want to cash out. With falling prices, many crypto investors flock to less risky opportunities to make money, and supply responds to demand. Arguably, cryptocurrency markets are still very much based on sentiment. The variety of cryptocurrency applications is growing rapidly, but there is still no easy way to tie different cryptocurrencies to a specific price, making the asset class extremely sensitive to changes in market sentiment. Additionally, cryptocurrency traders have relatively easier access to high levels of leverage. While this allows savvy traders with less capital to make huge returns, when prices fall, it can lead to a cascade of market-wide losses.

In times of volatility, it is important for investors to carefully assess the market situation and consider safer investment products. Singapore’s cryptocurrency exchange Phemex has evolved and transformed into a full-fledged financial management platform. Noticing that demand was expanding from a niche of perpetual contract traders to a wider audience seeking safe and convenient crypto investment options, the company responded quickly. Phemex’s Savings product enables investors to earn interest on their crypto with its Flexible and Fixed Saving Asset Management products. Unlike its competitors, Phemex has taken into account that crypto investors need to stay nimble. Phemex recently unveiled a special offer on its savings product, which enables users to earn up to 18.8% returns on short-term ETH deposits and up to 4.5% on stablecoins.

Founded by a team of ex-Morgan Stanley executives, Phemex offers its users world-class security, growing from a small derivatives trading platform to one of the most popular and acclaimed cryptocurrency exchanges in the world. Unlike Celsius, Phemex guarantees that customers will always have access to their money even if the markets crash due to unforeseen circumstances, and they have kept that promise even through this recent market crash.

The recent LaunchPool initiative allows users to earn higher staking income with different types of cryptocurrencies. Users can also unstake at any time and enjoy hourly payouts.

Phemex’s LaunchPad product also offers the industry’s hottest upcoming projects, enabling investors to get in early on great projects with exclusive bet benefits without having to worry about being scammed. While ICOs are often conducted by anonymous teams with no guarantee of commitment, Phemex knows every project listed via LaunchPad to ensure the safety of customers’ funds. In addition, Phemex is now approved for operations in Turkey, Lithuania and 48 states in the United States. The exchange also recently became a member of the Travel Rule Universal Solution Technology (TRUST) and is in the process of being fully compliant with the US Travel Rule.

There are no one-size-fits-all solutions to dealing with bear markets, and with so much negativity from scams, scams, and hacks, cryptocurrency investors are looking for the most reliable, low-risk methods to grow their wealth. With prominent projects like Phemex pushing for good regulation, perhaps the next bear market will bode well for new and veteran investors alike.

Note: Investing in cryptocurrency and cryptoassets is subject to financial risk and readers should do their own due diligence. Entrepreneur Media does not support such investments.