Without Bear Markets There Is No Wealth Creation

Human Psychology?

There are still so many who are not able to understand the utility of a bear market. Many believe that a bear market simply needs to be endured. They fail to realize that this is actually the ticket to wealth, not the bull market. The bull market is the show and the bear market is the ticket. If you bought your ticket well before time then you get to have the best seats up front. If you arrive in a bull market without a ticket you have to buy one on the spot and stand miles away from the stage. You are so far away that the only way to see what’s going on is to watch on a provided screen.

You’ve Got It All Wrong

A bear market is not something to be endured but embraced. Without bear markets, I would have nothing. I have these times to thank for my providence. Once you are able to embrace the opportunity while simultaneously enduring the painful aspects, you are on the right road. Patience is however key during these times. You need to have a number of strategies and not simply allocate all your capital in one swoop on the first meaningful correction you see. In the same breath, you don’t want to FOMO all in on the first pump that deceives the majority into thinking it’s all over.

The Irony

Ironically, the most powerful point in a bear market is also the most painful. There is always a lot of talk in regards to the “bottom” of every bear market. Even though it can oftentimes be rather tricky to determine, there is merit in attempting it. Referring to the last bear market I will make a case of how important patience is in this game. During 2018 there were a number of pumps, which were later followed by significant dumps. In essence, massive pumps to the upside, followed by even larger dumps to the downside. This ultimately just causes the price to constantly drop over the longer term. This was followed by a relatively long sideways move. It was during this time that many began calling a bottom. As the price continued sideways in the $3K zone the case seemed to be proved valid.


Just as everyone was buying into the “bottom” narrative, Bitcoin flash crashed straight down to the $3K zone. Those who deployed all their capital at 6K would have realized an 11X if they held to the $69K peak. Those who exercised patience and bought the $3K zone would have realized at least 22X at the cycle top. You have to remember that this massive variance of 1100% was achieved at the very tail end of the bear market “bottom journey”. Once again, attempting to identify a bottom is a typical risk/reward scenario. Those who choose to do so, based on personal conviction, know the risks involved.

Food For Thought

Either way, bear markets offer an opportunity to create wealth. Without a bear market, there is no life-changing wealth. Remove a bear market from the last cycle top to this cycle top and see what you find. If BTC never retraced to $3K and simply plodded along the $20K level before blasting up to $69K the difference would be enormous. With a bear market, the perfect scenario offers a return of approximately 2300%. Remove the bear market and you see a return of 350%. This is significant, especially when you consider that altcoins dwarf these figures.

Final Thoughts

Bear Markets are about accumulation, multiplying existing holdings, and scooping bottoms. If you manage to experience some level of success in these three areas then the upcoming bull market should be a fulfilling period for you.

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