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How Can I Successfully Invest in Crypto During a Bear Market?

Posted on July 28, 2022
Written By  Liti Capital

It is no secret that the cryptocurrency industry— and the global economy as a whole— has been facing recent hardships. 

Fears that a “crypto winter” has arrived are in full swing. Billionaire twins and founders of Gemini crypto exchange Cameron and Tyler Winklevoss shared last month that the industry is currently in a “contraction phase” which has been “further compounded by the current macroeconomic and geopolitical turmoil.”

The global crypto market cap dropped 5.28% in late May 2022, losing an estimated half a trillion dollars of market capitalization. To make conditions worse, TerraUSD (UST) then broke its peg to the U.S. dollar and turned to its sister cryptocurrency, Luna, to maintain its value. Both collapsed and led to a $60 billion loss in market capitalization alone. As of July 2022, Bitcoin has lost nearly 70% of its value since reaching its all-time high of $69,000 in November 2021. It’s no wonder why a wave of worry has swept the crypto community. 

Ric Edelman, a trailblazer among RIAs, told Forbes this week that he is not concerned by the current crypto climate, even though the market is down more than three times the 20% that constitutes a bear market.

He provided examples of tech mega stocks that have also suffered significant losses in 2022, including social media giant Meta and leading streaming service Netflix— both down 54% and 67% year-to-date, respectively.

This is important to highlight. With inflation at a multi-decade high worldwide, having doubled between March 2021 and 2022 per the International Labour Organization, it is not hard to imagine why concerned investors are unloading their riskier crypto assets on a mass scale. 

According to World Bank president David Malpass, “for many countries, a recession will be hard to avoid.” He explained further that “the war in Ukraine, lockdowns in China, supply-chain disruptions, and the risk of stagflation are hammering growth.”

So the question becomes, are there still returns left to be made within the crypto space? How can we strategically cushion ourselves from the consequences of the current economic climate? 

At Liti Capital, we strongly encourage our community to take this opportunity to enhance their financial literacy and thoughtfully approach investment decisions to weather any financial storm.

As a private equity company specializing in litigation finance that operates on the blockchain, we present investors seeking unique portfolio diversification with a rare opportunity to combat unwanted losses during periods of economic instability.

Litigation finance has an overall low correlation to external financial markets and is considered countercyclical to them, meaning that the industry often performs better in economic downturns.

Take COVID-19, for instance. While financial fallout has been felt worldwide in its wake, the demand for third-party litigation financing shot up in response to it. According to The Financial Times, COVID-19 could potentially provoke an unprecedented rise in claims that are anticipated to linger far beyond 2021.

Per Bloomberg Law, law firm profits jumped 14% within the first 9 months of 2021, compared to a mere 6.3% in 2019. Suits centered around supply chain disruptions as well as breaches of contract in the realms of delivery and manufacturing lags are expected to continue. 

In addition, the value of claims is adjusted to the inflation rate within the litigation finance sector– making the industry largely immune to inflationary challenges. 

With the market 22 billion USD by 2027 in the United States alone— up from 10 billion USD in 2018— there is no better time to engage in private equity’s highest performing alternative asset class. 

Exclusive for the majority of its quarter-century history to elite investors, anyone can participate in the litigation finance industry via Liti Capital’s first-of-its-kind equity token, $LITI. 

As $LITI is backed by and representative of a share of stock in Liti Capital, it offers institutional and retail investors alike a chance to invest in crypto safely and tactically regardless of the ongoing crash. 

At Liti Capital, our ability to source ‘investable’ legal case is, arguably, unrivalled by other Litigation Funding players.

This ability is critical for our success, hence why we place significant attention on our portfolio construction and diversification. We currently have a pipeline of cases with a total winnable value in excess of $15 billion, spanning several sectors covering diverse legal matters.

To learn more about the Swiss-regulated equity token, please visit www.LitiCapital.com.

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Liti Capital SA (“Liti Capital”) is a litigation finance company registered in Switzerland under number CHE-379.790.214. All information contained on this website is intended for general information, and should not be construed as investment advice. The information on this website is not intended to provide a sufficient basis on which to make an investment decision. It does not constitute a recommendation or take into account the particular investment objectives, financial conditions, or needs of individual investors. The information is not an offer to sell or a solicitation of an indication of interest to purchase any security of Liti Capital, or to make any investment. An investment decision should be made solely on the basis of offering documentation that Liti Capital may provide to you separately, which you should review in detail with your professional advisers. “US Persons” (as defined for purposes of US securities laws) will not be allowed to purchase any securities that may be issued by Liti Capital unless they satisfy the requirements of US securities laws, including qualifying as an accredited investor. There can be no guarantee that any security issued by Liti Capital will be profitable and investors may lose all of the capital they invest in any such securities. While Liti Capital attempts to ensure that the information contained on this website is accurate and complete, no representation or warranty, express or implied, is made as to the accuracy, completeness or reasonableness of the information contained on this website. Liti Capital assumes no responsibility for such errors and omissions, and reserves the right to make changes to content and other information on the website at any time without notice.
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