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Why Choose Zero Crypto Consulting?
Getting started as a home crypto miner can feel overwhelming, especially when you’re navigating your way through a bear market. But the team at Zero Crypto Consulting has you covered. As professionals specializing in personalized crypto mining training, they can help guide you through the intense process.
Whether you’re just starting out and need help understanding the basics of cryptocurrency and mining, or if you’re an advanced miner looking to elevate your crypto mining farm to the next level, Zero Crypto Consulting can help. They even offer free 30-minute strategy calls. Simply use the checkout code ‘The Hobbyist Miner’ to schedule your call.
Our First Bear Market: What We’ve Learned
Both myself and Chump Change, another crypto enthusiast, started our journey into crypto mining about the same time. We have navigated the bull market and now we are experiencing our first bear market. It’s a challenging time for newbies like us, but we’ve learned some valuable lessons.
1. Nail Down Your Operating Expenses During the Bull Market
Firstly, one cannot stress the importance of nailing down your operating expenses during a bull market. More specifically, you should know what your electric rate is. Stringent attention to these details ensures that when a bear market inevitably arrives, you’re not severely impacted.
During the bull market, when profitability was high, many miners didn’t focus on their electric rate. Now, during a bear market, with profits dwindling, those same miners are struggling to cover their costs.
To keep operational costs low, and avoid surprises, it is wise to lock in an electric rate that you’re comfortable with.
2. Don’t Depend on Crypto to Cover Your Expenses
The other lesson we learned is to refrain from depending on crypto to cover all our expenses. It’s tempting to cash out your assets to cover bills, especially when profits are high. However, when a bear market rolls in and profitability drops, you may find yourself in a financial bind.
Bear Market Strategies
It can be helpful to mine and hold speculative coins such as Flux and Ergo, then, when the bull market comes around, you can cash-out or trade these coins. Essentially, prepare for dry spells by diversifying your coin portfolio during the wet seasons.
3. Don’t Over Leverage Yourself with Debt on Hardware during the Bull Market
People often go into debt to accumulate more mining hardware during a bull market, anticipating greater rewards. However, when a bear market hits, those rewards dwindle or even disappear; leaving miners burdened with debt and unprofitable hardware.
Instead, a good strategy is to purchase hardware, like GPUs and ASIC miners, using profits from mining. Even though profitability is lower in a bear market, by using mining profits to purchase hardware, you avoid debt and financial risk.
4. Diversify Your Mining Portfolio
Another lesson we learned is that diversifying your mining portfolio is crucial. During the bear market, we saw an upsurge in new and speculative coins. There’s always the temptation to dive headfirst into mining these new coins, hoping for high rewards. However, investing in these coins without proper due diligence can prove risky.
Instead of chasing after new, risky coins, it’s wiser to have a diversified mining portfolio. This gives you a safety net of reliable and profitable coins to fall back on when times are tough.
5. Be Cautious with New Coins
Bear markets often spur an increase in the development of new coins. While some of these may have potential, others could be scams. As a result, it’s crucial to do your research and exercise caution.
In this first bear market, we saw how easy it is for crypto developers to create new coins. While the ease of doing this creates more opportunities for innovation, it also opens the door to scams.
Wrapping It Up
Learning from our bear market experiences, we can better prepare for future market fluctuations and make more informed decisions. Having a well-rounded portfolio, managing our expenses during a bull market, not over-leveraging with debt, and being cautious with new coins are all strategies we’ve learned.
Make your own decisions but take these insights into consideration as you navigate your journey in crypto mining. As always, “invest what you can afford to lose”, that’s the golden rule of crypto.