Using Splinterlands to Hedge Against the Next Bear Market

Since it seems like we've been in a crypto winter that has lasted forever and that it's never going to end, I've been thinking how I might handle things differently during the next crypto bull market heading into the next bear market and I'v...

4 months ago, comments: 4, votes: 65, reward: $1.46

Since it seems like we've been in a crypto winter that has lasted forever and that it's never going to end, I've been thinking how I might handle things differently during the next crypto bull market heading into the next bear market and I've come to the conclusion I'm going to use Splinterlands to protect some of my investments and here is how.


Me Waiting for the Crypto Market to Recover

Take Slow Profit Into Splinterlands

My goal each week is to purchase at least 1 Splinterlands deck, whether it's an Alpha, Beta, Orb, or Untamed. Currently I'm focused on Beta and Untamed as I feel like the prices of these two packs are at their bottom being priced at $2.89 (since all the packs have been sold) and $1.50 respectively.

I think once the price of Steem goes above 1$ I will set a goal of something like $10 per week on Splinterland purchases as long as the price increases and stays above $1. This will allow me to continue to have liquid Steem to make purchases with through the entire Bear market and it will also help prevent me from trying to time the top and making all my purchases at once and then not having any more liquid Steem if the price of Steem continues to climb.

This will also allow me to take some profits any time the price of Steem begins to look week and will probably set the same goal of $10 per week in sales to then try and use that money to purchase at a lower price and also lock in some profits in case that happens to be the local or long term top and I wasn't expecting it.

What Will I Be Purchasing?

My first priority will be "sealed products" or booster packs if you will. I will be buying packs that either just recently sold out, such as the Beta packs at the time of writing this article, and ones that are still currently for sale, such as the current Untamed packs. As long as the "Beta" packs are still reasonably priced I will split my purchase 50/50 between the Beta Pack and the Untamed Pack.

The Beta packs are higher priced, but they are more likely to increase in value in the short term. This will allow me to take some short term profits if need be. The Untamed packs at $1.50, are more than likely at the lowest price they will ever be seen at, but will stay there or around that price until we sell 1,200,000 more packs, which may take a while. These packs would be more of a long term hold.

I will also be focusing on some of the "older" Summoners and Legendary cards. Cards that I still feel are cheap, but have time to prove themselves as popular cards that can easily be rented. If the price of Steem continues to go up, I will be able to sell these cards for more than what I paid for them, and if the price of Steem goes down, my ROI from a Steem standpoint should go up from the rental income (more on that in a second).

Why I'm Hedging with Cards and Packs?

Because even though the cards and packs are mostly bought and sold with crypto, the pricing is in a dollar amount. So lets say I decide to buy 10 Untamed Packs on the Splinterlands Shop and Steem is at $5 per Steem it would only cost me 4 Steem to buy those packs. Now lets say as the price of Steem continues to decline and the Untamed packs begin to sell out I decide to sell 8 of those Untamed Packs for $3 a piece, but the price of Steem is now down to $1. I am not only ahead from a dollar standpoint as I made $4 from my $20 investment (sold 8 packs for $24), but I also spent 4 Steem on those 10 Packs and was paid 24 Steem when I sold them and still have 2 packs remaining in which I can hold until the value of those packs is even higher, let's say the $5 or $6 range.


Me Badly Describing this Math

Now let us look at it from a rental standpoint. Let's see I paid $10 for a max Lord Arianthus and once again the value of Steem was $5 so the card cost me 2 Steem. We fast forward a 3 years and I've been renting this card for $0.01 a day and have kept it rented the entire time, but the value of Steem has dropped to $0.20. From a dollar stanpoint I've just recently paid the card off, but from a Steem stanpoint I would have had the card paid off in just 40 days of of the Steem value holding $0.20, and the rest has just been profit.

That doesn't even include the money I could make back once I go and sell the card whose value should have gone up in price at this point. I use $10 for Lord Arianthus, because that's around what I paid for my current max card, and just a single card is now worth $8.70, so if you're able to pick the right Legendary, you might not even need to rent the card to get a significant payback for your investment.

TLDR

Buying
$5 Steem -> Buy 10 Untamed Packs (Shop Price of $2) -> Cost of 4 Steem
Wait a few years
$1 Steem -> Sell 7 Untamed Packs (Once Sold out Steem-Engine price currently $3) -> Profit of $1, Profit of 17 Steem, and Still holding 3 Packs

Rental
$5 Steem -> Buy 1 Max Legendary for $10 -> Cost of 2 Steem
Rent for three years for $0.01 a day
$0.20 Steem -> Made money back from USD (3 years * 365 days * $0.01/day) -> Made Steem back in 2 months of $0.20 Steem (1 Steem per 20 days = payback after 40 days for $0.20 Steem)

I hope that makes since and I just want to remind everyone I'm a terrible amateur investor who has hodled all the way down the bear market and didn't take any profits so please don't take my advice or the advice of any scammy salesman on the internet who try and sell you shady lavaclaw things and go talk to a licensed certified person who can help you grow your wealth.