I. Strategy dynamic balance: How to let returns traverse bull and bear cycles.
In the periodic volatility of the crypto market 'short bull long bear', Bitlayer's users have achieved sustained stability in returns through dynamic strategy adjustments. This adaptive strategy system based on the AI engine can automatically optimize fund allocation ratios according to the market environment, capturing growth dividends in bull markets and preserving profit bases in bear markets. Data shows that users adopting dynamic strategies achieved an annualized return of 25.7%, which is 8.3 percentage points higher than static allocations, while the maximum drawdown was reduced by 62%.
The core logic of dynamic balance lies in 'real-time calibration of risk-reward ratios': Through Bitlayer's yield optimization engine Pro, real-time monitoring of 12 key indicators, including Bitcoin volatility, cross-chain capital flow, RWA asset correlation, etc. When indicators deviate from thresholds, strategy adjustments are automatically triggered. This 'perception-decision-execution' closed-loop mechanism allows ordinary users to possess institutional-level market response capabilities, completely saying goodbye to the operational dilemma of 'chasing highs and killing lows'.
II. Bull market strategy portfolio: Offensive configurations to maximize growth dividends.
Market characteristics and strategy logic.
When Bitcoin's monthly increase exceeds 20% and volatility remains in the 30%-50% range, the market enters a typical bull market cycle. At this time, Bitlayer's AI engine will automatically increase the weight of high-yield strategies, with the core logic being 'amplifying risk exposure to capture trend dividends', while locking in short-term volatility gains through cross-chain arbitrage.
The optimal solution for a 10 BTC fund in a bull market.
Allocation ratio:
40% Cross-chain arbitrage bots (expected annualized return of 26.4%).
30% Liquidity mining Pro (expected annualized return of 17%).
20% Supernode staking (expected annualized return of 14%).
10% Ecological incentive task (additional earnings).
Key operational points:
Activate the arbitrage bot's 'aggressive mode' to expand the price difference capture range to 0.5%-3%.
Select high-volatility trading pairs (such as BTC-ETH) for market making on Bitlayer DEX to enjoy higher fee-sharing.
Select a 1-month staking period for flexible lock-up, allowing for timely strategy adjustments.
Empirical evidence: During the bull market period of January-February 2025, this portfolio achieved an average monthly return of 0.28 BTC, with an actual annualized return of 33.6%.
Bull market layout for institutional funds of 1000 BTC.
Allocation ratio:
50% Cross-chain quantitative strategy (customized arbitrage model, expected annualized return of 28%).
30% Liquidity mining cluster (multi-chain diversified allocation, expected annualized return of 18%).
15% Institutional credit (high-rated borrowers, expected annualized return of 12%).
5% Ecological strategic investment (early project layout).
Core techniques:
Collaborate with the Bitlayer team to develop exclusive arbitrage routes, prioritizing access to high-value trading pair information.
Use the bulk transfer function to reduce Gas costs, saving 40% on a single transaction.
Participate in node elections to obtain an additional 5% return sharing.
Empirical evidence: An institution achieved a quarterly return of 72 BTC through this strategy during the bull market of 2025, with an annualized return of 28.8%.
III. Bear market strategy portfolio: Defensive configurations to protect income bases.
Market characteristics and strategy logic.
When Bitcoin's monthly decline exceeds 15% and volatility breaks through 50%, the market enters a bear market cycle. At this time, Bitlayer's strategy core shifts to 'risk hedging + income stability', by increasing the allocation of low-correlation assets to reduce portfolio volatility risk, while using arbitrage opportunities in extreme market conditions to achieve excess returns.
Survival rules for a 10 BTC fund in a bear market.
Allocation ratio:
50% Supernode staking (14% annualized, stable returns).
30% RWA Real-World Assets (5.5% annualized, low volatility)
15% Cross-chain arbitrage (conservative mode, 12% annualized).
5% Ecological task (fixed reward).
Key operational points:
Switch the arbitrage bot to 'conservative mode', capturing only price differences above 1%.
RWA allocation prioritizes government bond products, with a correlation to the crypto market of < 0.1.
Activate the 'automatic reinvestment' function to convert returns into stable assets.
Empirical evidence: During the market crash in March 2025, this portfolio had a monthly drawdown of only 2.3%, far lower than the market average decline of 28%, achieving a positive return of 0.09 BTC.
Bear market defense for institutional funds of 1000 BTC.
Allocation ratio:
60% Supernode staking (14% annualized, Gas sharing increases returns).
25% RWA Digital Bonds (5.5% annualized, daily settlement).
10% Cross-chain arbitrage (low-frequency high-certainty model).
5% Risk reserve (cash equivalents)
Core techniques:
Negotiate with Bitlayer to customize a long-term staking agreement to obtain 1.2 times return enhancement.
Utilize the staking function of RWA assets to obtain an additional 3% lending return.
Deploy on-chain option hedging tools to hedge against extreme downside risk.
Empirical evidence: A sovereign fund achieved a quarterly return of 16.5 BTC through this strategy during the bear market of 2025, with an annualized return of 6.6%, outperforming 95% of crypto assets.
IV. Volatile market strategy portfolio: Yield capture techniques in range fluctuations.
Market characteristics and strategy logic.
When Bitcoin's price fluctuates within ±10% for more than 30 days and volatility remains in the 20%-40% range, the market enters a volatile cycle. At this time, the optimal strategy is to combine 'high-frequency arbitrage + swing trading', using Bitlayer's cross-chain price difference capture and liquidity mining fee sharing to obtain dual returns.
Core strategy portfolio for volatile markets.
10 BTC allocation plan:
45% Cross-chain arbitrage bots (high-frequency mode, expected annualized return of 22%).
35% Liquidity mining (stable trading pairs, expected annualized return of 15%).
20% Node staking (basic income, 11% annualized).
Key operations:
Activate the arbitrage bot's 'high-frequency mode', setting the minimum price difference threshold to 0.5%.
Select stable trading pairs such as BTC-USDT for market making on Bitlayer DEX to reduce impermanent loss.
Adopt a '15-day lock-up + rolling reinvestment' model, balancing returns and flexibility.
Empirical evidence: During the volatility period of November-December 2024, this portfolio achieved an average monthly return of 0.18 BTC, with an annualized return of 21.6%.
Special techniques for volatile markets.
Cross-chain price difference grid: Set up a price difference monitoring grid for 5 chains, automatically triggering arbitrage when the price difference between any two chains exceeds 0.8%.
Fee ladder capture: Increase liquidity input during peak trading hours (daily 14:00-20:00 UTC); at this time, fee income is three times that of the low period.
Node rewards stacking: Staking during the node election cycle can earn an additional 2% reward, with 4 such opportunity windows each year.
V. Five core engines for strategy optimization.
1. AI Dynamic Rebalancing Engine.
A reinforcement learning-based fund allocation system that analyzes market data once every hour and automatically adjusts the weights of each strategy. Back-testing data shows that this engine can increase portfolio returns by 42%, especially performing prominently at market turning points, able to adjust strategy direction 12 hours in advance.
2. Cross-chain route optimizer.
Real-time assessment of Gas fees, congestion levels, and yield levels across 10 chains, to select the optimal execution chain for arbitrage and mining strategies. Data shows that enabling this optimizer can reduce cross-chain costs by 35% and improve strategy execution efficiency by 20%.
3. Risk hedging module.
Built-in options and insurance tools that can automatically purchase hedging products based on market risks. When volatility exceeds 50%, automatically allocate 5% of funds to purchase put options, reducing drawdowns in extreme market conditions by 65%.
4. Yield reinvestment calculator.
Calculate the optimal reinvestment timing based on the yield cycles and compound interest effects of different strategies. Tests show that scientific reinvestment can increase total returns over 5 years by 37%, far exceeding the 15% increase from manual reinvestment.
5. Tax optimization engine.
Automatically calculate the tax costs of different strategies, prioritizing configurations with higher post-tax returns. In high-tax regions, this engine can increase actual returns by 12%-18%.
VI. Advanced operations: Key techniques from strategy execution to maximizing returns.
Fund size adaptation principle.
Small funds (1-10 BTC): Focus on liquidity and flexibility, prioritizing no-lock-up or short-lock-up strategies to avoid excessive capital occupation.
Medium funds (10-100 BTC): Build a 'basic income + flexible income' portfolio, using 60% of the funds for stable income and 40% to chase high-yield opportunities.
Large funds (100+ BTC): Focus on risk diversification and customized services, obtaining exclusive strategies and return enhancements through Bitlayer's institutional channel.
Time cycle management techniques.
Short-term funds (<3 months): All allocated to liquidity mining and arbitrage bots, using a daily settlement model.
Medium-term funds (3-12 months): 60% node staking + 40% flexible strategies, balancing returns and liquidity.
Long-term funds (>12 months): 80% long-term node staking + 20% RWA allocation, maximizing compound interest.
Extreme market response plan.
Sharp decline market (single-day decline > 15%):
Immediately suspend arbitrage and mining strategies to avoid price deviation losses.
Convert 50% of liquid assets into RWA or node staking.
Wait for volatility to drop below 40% before gradually resuming strategies.
Surge market (single-day increase > 20%):
Raise the price difference threshold for the arbitrage bot to above 1%.
Increase the proportion of high-volatility trading pairs in liquidity mining.
Set up an automatic redemption mechanism for returns to lock in some profits.
VII. Case studies: Comparing strategy effects in different market environments.
Case 1: The bull-bear transition of a 10 BTC user.
A user's strategy execution record from October 2024 to April 2025:
Bull market (October 2024-February 2025): Adopt an offensive portfolio, accumulating returns of 1.2 BTC.
Bear market (2025.3): Automatically switch to defensive strategies, with a monthly return of 0.09 BTC (profiting against the trend).
Volatile market (April 2025): Balanced strategies achieved a return of 0.18 BTC.
Total returns of 1.47 BTC over 6 months, with an annualized return of 29.4%, far exceeding the 12% increase from static holding of Bitcoin.
Case 2: Annual performance of an institution with 1000 BTC.
An institution's 2024 strategy report shows:
Bull market phase (January-May): Offensive strategies achieved a return of 142 BTC.
Volatile phase (June-September): Balanced strategies achieved a return of 87 BTC.
Bear market phase (October-December): Defensive strategies achieved a return of 41 BTC.
Annual total return of 270 BTC, with an annualized return of 27%, maximum drawdown of only 8.3%, and a Sharpe ratio of 3.8.
Conclusion: Dynamic strategies are the core capability to navigate cycles.
Bitlayer's practice proves that the key to obtaining sustainable high returns in the crypto market is not in predicting market trends, but in building a dynamic strategy system that can adapt to any market conditions. Through real-time portfolio adjustments by the AI engine, flexible switching of cross-chain strategies, and scientific allocation for risk hedging, ordinary users can also achieve the return goals of 'earning more in bull markets, losing less in bear markets, and gaining steadily in volatile markets'.
Users of different fund sizes can find suitable strategy solutions on Bitlayer: Small funds capture opportunities through high-frequency arbitrage and flexible mining, medium funds rely on balanced portfolios for stable returns, and large funds achieve wealth growth through customized services and long-term compound interest. In this highly volatile market, mastering the ability to adjust dynamic strategies is more important than choosing a single high-yield product.
With the continuous evolution of Bitlayer's strategy engine, more innovative tools will be introduced in the future, including on-chain options, yield swaps, and other advanced strategies, allowing for 25%+ annualized returns to be maintained over longer cycles. For users, what is needed now is to understand the core logic of dynamic strategies and leverage platform tools to achieve cyclical growth in returns.
