Bear Market Buys: The Crypto Niche That’s Outperforming the Market


Bitcoin and Ethereum have long been considered bear market safe haven coins. However, market analysis shows there may be better options. 

By Billy Endres

Bitcoin and Ethereum have forever been viewed as “safe haven” coins that are less volatile than other cryptos due to their high market cap and overall dominance. 

During periods of increased market uncertainty and bear cycles, investors often look to cash out high-risk, high-reward altcoins and flood to the security and strength of BTC and ETH. In the past, this has led to an increase in their market dominance and stability.  

However, after six months of down-trending price action and drawn-out trading ranges, both Bitcoin and Ethereum are down about 50% — showing they aren’t immune to sell-offs and capitulation. 

Dominance percentages are also much lower than expected, with Bitcoin near all-time lows of 39%.

A drop of this nature in market dominance can be primarily attributed to one crypto niche outperforming Bitcoin, Ethereum and the broader market.

To answer the questions about what these coins are and why they’re important, first ask yourself another question: What doesn’t stop during a bear market, has a proven business model and is impervious to a market downturn?

Answer: Cryptocurrency exchanges. Upon consideration, the answer is glaringly obvious.

Exchange tokens — the utility coins of these platforms — are leading the way in growing market dominance and positive price action.

Crypto exchange tokens vs. BTC and ETH

Out of eight crypto exchange coins and tokens overlayed against BTC and ETH, seven of the eight exchange tokens outperformed both major cryptos over the past six months.

A comparison of centralized and decentralized exchanges (DEXs) against BTC and ETH yielded similar results. Popular Ethereum-based DEX, Uniswap, was one of the only high market cap cryptos that witnessed growth at some stage throughout this period.

Six-month price change:

  1. Uniswap (UNI) -9.19%
  2. Binance Coin (BNB) -27.29%
  3. GateToken (GT) -30.01%
  4. Pancake Swap (CAKE) -38.91%
  5. FTX Token (FTT) -40.01%
  6. Aave (AAVE) -40.97%
  7. KuCoin Token (KCS) -44.83%
  8. Bitcoin (BTC) -48.70%
  9. Ethereum (ETH) -50.84%
  10. Cronos (CRO) -69.41%

The single exchange-based trading pair that didn’t outperform Bitcoin and Ethereum was CRO, the native coin. However, this is likely due to its market positioning before the bear cycle. 

CRO had grown over 500% in under two months leading up to the broader market crash. With a market cap of about $22 billion, it was likely seen as highly overvalued and due for a correction back to fair value.



While many investors become skeptical throughout bear cycles and let fear take them out of the market, others capitalize on this, hitting short positions with size and profiting regardless of market sentiment.

The point is that trading doesn’t stop — daily trading volume across spot, futures and DEXs remains well over $100 billion.

Altcoin holders may be worried that a project will run out of funding or fail to complete its roadmap, selling out of fear of a further drop. 

Layer-1 blockchain holders or those banking on infrastructure or gaming tokens may witness a similar fear-driven sale.

Will Web3 eventuate, or will the megacorporations have their way and further monopolize the web with centralized, advertising-based business models? 

This fear is not an issue for cryptocurrency exchanges and the coins that act as the backbone of their operations. Regardless of market sentiment, traders will continue to buy, sell and hedge their positions.

It’s a proven business model, and cryptocurrency trading doesn’t stop.

Although many may not recognize it as a strategy, holding exchange tokens during a bear market has proven to be a decent way to mitigate risk. It may be inadvertent, perhaps subconscious, but trust nonetheless.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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