Thread by @TreehouseFi

Many assume that successful investing comes from picking winners during bull markets. However, it is during bear markets that life-changing wealth is created.

Here’s our playbook on how to navigate this Crypto Winter!
🧵👇

#WebTr3e 🌳 #DeFi #BearMarket

As we navigate #CryptoWinter together, here are some principles that can help you endure this bear market.

1️⃣ Downside Management & Capital Preservation
2️⃣ Asset Selection & Accumulation
3️⃣ Liquidity Optimization & Capital Efficiency

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1️⃣ Downside Management & Capital Preservation

Hedging, sizing, and dollar-cost averaging (DCA) can help you mentally prepare for stressful market movements and generate positive expected returns in the long-term.

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2️⃣ Asset Selection & Accumulation

Most people accumulate blue chips such as #BTC and #ETH during a down market in the #crypto space, but you can also benefit from a high-conviction list of assets backed by sound research. Always #DYOR.

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3️⃣ Liquidity Optimization & Capital Efficiency

Liquidity and capital tend to be tight during bear markets. You should take advantage of cost-efficient instruments such as options, while setting aside dry powder for opportunistic entries!

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How to weather this period of drawdown? Read on for some strategies for asset holders like you.

Depending on your level of experience and risk appetite, there are both linear and non-linear instruments available to choose from.

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Linear instruments:

1️⃣ Long Asset + Leveraged Short Perps
2️⃣ Dynamic Spot-Futures Switch
3️⃣ Long Asset + Leveraged Short Farming
4️⃣ Short Farming via Money Markets

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Non-linear instruments (you understand the basics, risks, and options trading):

1️⃣ Long Asset + Long Put / Put Ratio
2️⃣ Fully Paid Margin Short Put
3️⃣ Long Asset + Short Call / Call Ratio

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If you want to gain exposure to assets through synthetic measures (non-ownership of spot assets), here are some ways to do it.

Linear instruments:
1️⃣ Long Perps Futures
2️⃣ Leveraged Long Farming

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Non-linear instruments (requires basic options trading knowledge):
1️⃣ Bullish Risk Reversal
2️⃣ Synthetic Long Position

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On top of the aforementioned strategies, here are some ways to generate extra yield:

🌳 Liquid Staking
🌳 Strategy Vaults
🌳 Similar Assets LP
🌳 Lending

Learn more about staking here:
treehouse.finance/learn-defi/wha…

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🐻 vs.🐂

While the bear market interrupted the pandemic-era bullish cycle, downturns will end and ultimately reverse. Now is the golden opportunity for investors like you to accumulate assets in a risk-controlled fashion.

Happy bear hunting!

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Read more about bear market strategies in our latest Insights piece “Bear Hunting: Strategies for DeFi Winter” here! 👇

treehouse.finance/insights/bear-…