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Are we in a crypto bear market?

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However, at a time like this, and as much as we try to stay level-headed, emotions can play a significant role in determining investing outcomes. Let’s look at how to navigate a bear market and invest strategically for the longer term—and where to buy crypto, if you plan to add to your holdings.

What is a bear market?

“A bear market is defined as any market or asset that sees a 20%-plus decline over a short period of time,” says Brian Mosoff, chief executive officer of crypto investment firm Ether Capital Corp. in Toronto.

Given the precipitous crypto market decline over the past few months, “crypto certainly fits this definition,” he adds.

This downturn isn’t specific to crypto, though. The stock market is also in the middle of a broad-based sell-off, led by tech stocks, many of which have lost 40% to 50% of their value this year.

It should be noted, too, that many cryptocurrencies have gone through several cycles of wild price swings. Bitcoin (BTC), for instance, has lost over 70% from its November 2021 all-time high of about $67,000 (all figures in U.S. dollars). Similarly, ether (ETH), the top altcoin, was down by over 65% from its peak of $4,847, as of Sept. 8, 2022.

We’re in a crypto bear market right now

“I would say that crypto is in a bear market right now, although it does seem that the prices have begun to recover,” says Mosoff, pointing out that bitcoin has snapped back above $23,000. 

Despite this rally, the crypto market is nowhere close to its peak back in 2021. The global crypto market has lost more than 60% of its value from its high of $3 trillion; as of Sept. 8, 2022, it’s worth about $1.03 trillion.

We’ve seen crypto bear markets before, including those in 2011, 2013 and 2018. How long the current one will last is anyone’s guess—for new and experienced investors alike, it’s difficult to predict when the market will bottom out, and to get the timing right to “buy the dip.”

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