With cryptocurrencies welcoming around 130 million newcomers since late 2021, a surge of investors stands at the brink of their first potential crypto bull run, speculated by some to materialize as early as 2024.
Unlike the current bearish market, a bull market is an experience akin to no other, according to Ben Simpson, the visionary behind the education platform Collective Shift, who describes it as “complete and utter chaos,” resembling a formidable tornado of activity.
Cointelegraph engaged with hedge fund managers, digital asset company research heads, and other seasoned crypto traders to glean insights into their strategies for navigating the impending bull market. They shared valuable lessons that newcomers could benefit from during this dynamic phase.
Strategic Entry and Exit Points
Simpson pointed out a common pitfall for novice crypto traders: retaining their crypto assets for too long, often driven by the allure of potential gains. He emphasized the importance of establishing a well-defined investment objective and understanding the composition of their portfolios, complete with predetermined sell prices for each asset.
Setting solid market exit points is crucial in mitigating potential losses. As Simpson aptly says, “Once the music stops in a bull market, it stops quickly.”
Dollar-Cost Averaging to Tame Volatility
James Butterfill, Head of Research at CoinShares, advocated for dollar-cost averaging, which involves consistent small purchases or sales of assets over time. This approach can help cushion the impact of volatility on one’s portfolio, whether in a bullish or bearish market.
Wisdom in Asset Selection
The co-founder and CIO of hedge fund manager ZX Squared Capital, CK Zheng, advised investors to focus on established and recognized cryptocurrencies such as Bitcoin (BTC) and Ether (ETH). Meanwhile, Deryck Graham, founder of crypto hedge fund Portal AM, recommended balancing investments between speculative and mature cryptocurrencies. He cautioned against the allure of “meme coins” with little practical utility.
Embrace New Themes for New Bull Markets
Markus Thielen, Head of Research at Matrixport and author of Crypto Titans, noted that Bitcoin has historically surged to new highs during booming markets. However, he emphasized the role of new themes in driving fresh bull markets. However, investing in new cryptocurrencies rather than those from previous bull cycles could be strategically advantageous.
Avoid Overexposure and Prioritize Mental Well-Being
Amidst all the strategies and excitement, Simpson, Zheng, and Graham echoed a vital sentiment:
- Avoid overexposure to the market.
- Abstain from leveraging loans to invest.
- Ensure investments are within affordable limits.
Simpson emphasized safeguarding mental health, suggesting that traders take regular breaks from market-watching and engage in activities that remind them of their humanity.
As the crypto community braces itself for the anticipated bull run, these insights from seasoned traders provide valuable guidance for newcomers and veterans alike. However, it’s essential to remember that all investment decisions carry inherent risks, and thorough individual research is paramount in making informed choices.