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How to Accumulate Bitcoin in a Bear Market
How can we continue to stack sats in a bear market? After hitting historic peaks late in 2021, the price of Bitcoin now hovers beneath a third of its all time high. The current bear market has come as a surprise to some beginner investors who are new to cryptocurrency. However, for those who have been engaged for some time, significant corrections and crashes are nothing new.
Since the emergence of Bitcoin, it has seen drawdowns of more than 80% three times already. The current bear market likely won’t be the last. Bear markets can have positive aspects that provide an opportunity for investors with solid long-term strategies to stack sats for the future.
But what if you don’t have a huge amount of cash to dump into Bitcoin? Today we’re looking at some easily accessible ways to accumulate BTC.
What’s a Satoshi?
The term “sats” is short for “satoshis”, which is the smallest unit that Bitcoin is denominated in. Thinking in terms of fiat currency, the relationship of one sat to one Bitcoin is akin to one cent to one dollar, although at a much smaller fraction. The unit of measurement was named after Bitcoin’s creator, Satoshi Nakamoto.
One sat is one hundred millionth of one Bitcoin (or 0.00000001 BTC). Sats are useful units of measurement because the price of Bitcoin is so high that many Bitcoin transactions include only small fractions of one Bitcoin. This is particularly the case for microtransactions and giveaways.
Running a Lightning Node
Lately, there has been plenty of buzz about Bitcoin’s Lightning Network. Lightning is a second layer to Bitcoin’s network that lets transactions happen off the blockchain while still utilizing the blockchain’s underlying security. Moving Bitcoin transactions off-chain improves transaction throughput, making it so that users don’t have to wait for block confirmations.
The Lightning Network is facilitated using Bitcoin and Lightning Network nodes; hardware-software units that connect to both the Bitcoin blockchain and the Lightning Network. Bitcoin and lightning nodes can be run separately, but it is advantageous to have both if you wish to engage with the Lightning Network.
Lightning Node Routing Fees
Anyone can run a Lightning Network node, either on their computer or on a dedicated device like a Raspberry Pi, which can be more secure than devices that browse the internet. By routing payments using a node, users can earn sats as a fee in exchange for forwarding transactions. There are other benefits associated with running a node, too. For Bitcoin enthusiasts, operating a node is a way to contribute to the community and help build towards the future of the Lightning Network.
Running a Profitable Lightning Node
Those who run Lightning nodes are able to quickly and cheaply send Bitcoin payments of any size, allowing these users the ability to save on fees. Operating a Lightning Network node is also a hands-on, tangible way to learn more about the Lightning Network. This is a great way to get involved with exciting technological developments in Bitcoin.
The amount of Satoshis you can earn operating a Lightning Network node will depend on your node’s capacity and the fee rate that you set. A pathfinding algorithm will determine whether a given payment is forwarded through your node. Fees should be low enough to be attractive to the algorithm while high enough to cover the operating costs for your node. The rewards aren’t typically extremely high but it’s a good way to earn small amounts of Bitcoin.
Other Easy Ways to Stack Sats
There are a number of different ways to earn satoshi’s during a bear market.
Here are a few of the most reliable methods to stack sats:
Earning Satoshis with Bitcoin Debit Cards
A great passive way to keep the Satoshis flowing when the crypto market is experiencing a downturn is by using a Bitcoin debit card. Bitcoin debits are issued by major credit card providers and often offer cash-back rewards in the form of Satoshis.
Even when vendors don’t accept cryptocurrency as payment, Bitcoin debit cards allow users to effectively pay with Bitcoin. The accompanying applications allow Bitcoin to instantly be converted into the fiat currency required by the card. The fiat can then be spent anywhere that accepts card payments. Exchanges that offer Bitcoin debit cards include Coinbase, Crypto.com, and Binance. Shakepay is a popular Canadian exchange with a Bitcoin reward card. Shakepay’s app also gives users escalating amounts of Satoshis for free each day simply for remembering to shake their phone.
Playing Games to Earn Satoshis
The Lightning Network has facilitated the development of blockchain-based games that have play-to-earn aspects. Considering the fact that Lightning Network transactions are very rapid and nearly free, they’re a great match for in-game transactions.
One game development company that uses Lightning Network to make transactions in-game is THNDR Games. Popular play-to-earn games created by THNDR include Turbo 84, Bitcoin Bounce, and THNDR Bay. Satoshi’s Games has also created games where players earn Satoshis in-game, including the popular game LightNite.
Earning Satoshis as Interest on Your Bitcoin
One popular way to generate passive income using Bitcoin you already own is through staking on exchanges such as Crypto.com. Staking your Bitcoin on exchanges can generate a fixed rate of return, making it an easy way to earn Satoshis when the market is down.
The main downside associated with staking your coins on exchanges relates to the old adage “not your keys, not your Bitcoin.” Security breaches at major exchanges have occurred in the past, and you should be sure to only stake on reputable exchanges with trusted insurance policies. Another downside of staking on exchanges is that your Bitcoin will be inaccessible for a fixed duration, decreasing your liquidity.
Conclusion: Stack Sats in Any Market
Bear markets represent a time when many investors are hesitant to invest their money. They likely have less cash available, and often resort to more conservative investment strategies. For those looking to accumulate Bitcoin, engaging with the lightning network is an efficient means to stack sats.
In summary, operating a lightning node, earning satsback by using visa debit cards, and playing games that pay rewards in sats are three great ways that any investor can employ to stack sats in a bear market, and beyond.
