Safer Ways to Invest in Current Crypto Bear Market

While Bitcoin ETF has been seen as a safer way to invest in Bitcoin, there is another safer way to invest in the current bear market, according to Bloomberg.

Cryptocurrencies, especially Bitcoin, have been under scrutiny because of market turmoil, price volatility, unclear regulation, etc., but with the Proof of Stake (PoS) process, some investors began to collect interest on their holdings.

Depending on the cryptos investors held and the amount of cryptos they have, the return from PoS based cryptos ranges from 5% to 150%.

According to Coinbureau, when investors invest in cryptos with PoS algorithm, they not only own the appreciation in the value of the crypto, but also the returns on possible staking (The stake refers to the cryptocurrency an investor owns).

First of all, depending on the crypto, crypto mining could be done in either Proof of Work (PoW) or Proof of Stake (PoS) algorithm. The process to create a new block in the DLT network is recorded and miners are rewarded.

In crypto winter, investors in cryptos such as Tezos, EOS, and Livepeer are more likely to survive the bear market using the PoS algorithm.

Staked, the company that uses the staking rewards offered by PoS currencies to help crypto investors collect interest rate on their holdings, raised funds of $4.5 mm on Jan 31, with investors including Pantera Capital Management, Coinbase Inc., and Digital Currency Group.

However, there is no risk-free investment. The downside of the PoS process is that investors may not be able to react to the market fluctuations as quickly, once the crypto is staked, the process will have to take hours even days to complete.

Image source: Pixabay

Author: Nicole Wei

Disclosure: I have no positions in any cryptocurrencies or related securities mentioned, and no plans to initiate any positions within the next 72 hours.

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