Introduction
When the market turns cold, most people try to force trades. We have been there, we used to punch random trades but not anymore. Here is the secret to making 50%+ APR on your portfolio during the bear market.
They long every dip, buy spot aggressively, or chase narratives that stopped working months ago. But as we wrote in our earlier articles, the bear market is officially here — volatility compresses, price chops sideways, and even the cleanest setups fail because liquidity dries up.
This is the phase where trying too hard becomes your biggest enemy.
So instead of fighting the market, we decided to let the market pay us.
In the last cycle, we used a simple, low-stress strategy that earned us around 50% annualized without needing to place a single long or short. No chart obsession, no emotional swings, no “will this bounce or break” stress.
Here’s exactly how we did it.
Why Traditional Trading Became Too Risky
Let’s be upfront:
Longing the dips is currently one of the riskiest things you can do.
In bear markets:
- Market makers hunt liquidity aggressively
- Breakouts fail more often
- Volume collapses
- Every bounce looks like a reversal — until it isn’t
- Spot buys bleed slowly as prices grind lower
Even good traders take losses because the structure changes.
This is why we shifted our mindset:
Instead of trying to time the market, we focused on growing the stack.
And that meant building a system where income flows regardless of price direction.
The Strategy That Earned Us 50%
Our framework was simple:
1. Stake stablecoins for passive yield (safe base layer)
We deposited our stablecoins (USDC/USDT) into Aave.
Why?
- You avoid price volatility
- You earn a predictable APR
- Funds stay liquid
- You can use them as collateral
This alone gives you anywhere from 6–12% depending on the era and liquidity incentives.
2. Stake a portion of our Ethereum to earn base staking yield
We also deposited ETH (or LSTs like stETH) into Aave.
This gave us:
- ~3–4% ETH staking APR (via LSTs if used)
- Extra supply APR from Aave
- The ability to borrow against it
ETH is the most trusted collateral in the ecosystem, so the borrow costs are structurally lower than riskier assets.
3. Borrow assets — but only responsibly
This is where the magic happens.
From our collateral, we took a loan — usually either:
- more stablecoins
- or more ETH (depending on market conditions)
The key point:
We never borrowed to trade.
We borrowed to increase yield.
4. Re-deposit borrowed assets to earn additional yield (looping)
The borrowed assets were deposited back into Aave. But keeping the liquidation price in mind. We only borrowed 15% so the risk is quite low. We are safe until ETH crashes 81.25% mathematically. Which is far lower than it could get in this bear market.
This boosts:
- total supplied value
- total yield earned
- efficiency of your capital
This process, done moderately (not degen looping), can take a base APR of 8–12% and push it into the 20–50% effective range, depending on:
- incentive programs
- borrowing rates
- staking yield
- LST/LRT points
- liquidity mining rewards
We didn’t chase max leverage.
We stayed in the safe zone — healthy LTV, enough buffer for volatility, and constant monitoring.
5. Add external earnings (optional)
Depending on the season, this can include:
- Aave reward tokens
- LRT points
- Liquid staking incentives
- Airdrop eligibility
- Cross-protocol integrations
These add layers to the yield stack without adding market exposure.
Why This Works Perfectly in a Bear Market
Bear markets reward patience and punishment avoidance.
Using this strategy:
- You earn yield without needing price appreciation
- You avoid the chop
- You protect capital
- You grow your portfolio steadily
- You stay liquid if a black swan hits
- You don’t get trapped in bad positions
In a time when most traders bleed, farming yield quietly compounds your stack.
As the old saying goes:
When the market stops paying traders, it starts paying lenders.
Risk Management — The Most Important Part
Let’s keep it real — nothing in crypto is risk-free.
Here’s how we kept it safe:
- Stayed below 35% LTV
- Monitored Aave liquidation thresholds daily
- Kept buffers for volatility spikes
- Avoided looping more than 2–3 cycles
- Used only top-tier assets (ETH + stables)
- Exited positions immediately during high volatility weeks
Responsible leverage is what makes this sustainable.
The Result
With conservative looping, staking rewards, Aave incentives, and external point campaigns, our effective yield sat around:
~40–50% annualized
And the best part?
No constant screen-watching.
No panic.
No overtrading.
Just quiet compounding.
Conclusion — In a Bear Market, Let Yield Work for You
Bear markets are not for hero trades.
They’re for accumulation, protection, and efficiency.
While everyone else is trying to guess the bottom, we’re letting the system grow our capital step by step. When the bull returns, we enter it with a larger base and stronger liquidity.
You don’t survive a bear market by trading harder — you survive by earning smarter.
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