You’ve probably heard somebody say “friends don’t let friends buy altcoins during bear markets.” 

Seems risky. Are those the same friends who told you to buy altcoins in March, April, October, and November 2021?

Some analysts say altcoins have yet to collapse against bitcoin and our most recent pump is an echo bubble or bear-market rally, destined to fail. Bitcoin’s zooming, altcoins are failing, and they’re all about to roll over into oblivion. Altcoins, of course, will fall further once bitcoin reaches its inevitable capitulation.

They're using the standard Bitcoin dominance chart, and if you do too, it sure does look like that collapse should happen at any moment.

When you use my chart, you clearly see that altcoins already collapsed against Bitcoin in June 2022 and have paced bitcoin since then.

While that doesn't mean we can't have another collapse, bear markets are probably the only time you’re going to get a good deal on altcoins. 

If history is our guide, your average altcoin will go up 300% or more before everybody agrees that the bull market has started (but not straight up). 

In other words, if you wait for the bull market, you’ll turn a potential 20x investment opportunity into a 5x gamble, at best—if you get your timing perfect, which you won’t.

For example, in 2018, your average altcoin rose 4,000% from buying in a bear market. That same altcoin rose only 800% from buying in the bull market.

Even if you bought through the COVID crash, just before BRRR money printing, you ended up worse than buying during the depths of the bear market. 

How low can you go?

It’s not just that chart.

Pull up a chart of any altcoin and you’ll see it almost never beats bitcoin from peak to peak. 

Even the strongest altcoin, Ethereum, peaked against BTC in June 2017—halfway through the 2017 bull run.

It has never gone back to that ATH. If you bought Ethereum at $400 in June 2017, you’re still down against bitcoin.

From the start of a bull market to its peak, you can find some winners if you’re lucky. ETH did ok. Others will, too. But your chances get slimmer as the market goes up.

From bottom to top? That’s a different story.

You did better in the “bear” markets, even as your portfolio sometimes trended lower against bitcoin for some periods of time. 

Altcoins, yes, but which ones?

Generally, I stay away from altcoins in the top 100.

Some are amazing—like the 11 altcoins that got a 5 out of 5 survivability score on my top 100 list.

But the biggest returns come from the small ones.

Every two weeks since June 2022, I mention a small altcoin that I like in my weekly updates for Crypto is Easy subscribers. For example, the one in my update from January 18, 2023.

You can also find some prime names in my altcoin reports.

You can get great tips lurking in the Quora Inner Circle Telegram group, too. 

Bear market perks

Let’s not forget two big perks for buying altcoins in bear markets: staking rewards and lower fees.

When you stake, delegate, bond, lock up your tokens or deposit them into liquidity pools, you get free crypto.

It’s your reward for committing time, money, risk, and effort to the protocols. You may even want to set up a node or participate in governance proposals.

That can make a big difference to your results. 

Let’s assume you’re looking for a 100x moonshot. That’s a tough thing to find and only possible (but not likely) during times like these. We’ll use that as our base. 

Staking lets you turn that 100x into a 105x or 110x. When you recycle those 5%, 10%, or even 20% rewards back into the protocol—a sort of in-kind compound interest—you can snowball your investment without putting any more money into the market.

Even if your favorite altcoin goes up *only* 1,000%, a 10% staking reward can get you an extra 100% return on your investment. It turns into a 10x into an 11x—a free roll, as the gamblers and stock traders say.

The longer you wait, the more of those benefits you lose. Opportunity costs might come back to hurt you. You're missing out on free crypto while it's dirt cheap. 

You also pay lower fees to use your crypto during the bear markets. 

Because the protocols price those fees in tokens, you get more bang for your buck when the prices are down. 

Small savings, but a little goes a long way. 

Bull markets give you higher fees, fewer staking rewards, better returns, and a small chance to get that moonshot you’re dreaming about. 

Are you sure your friends are giving you the best advice?

Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio.