Beginner's Guide: 8 Tips to Master the Next Bull Market

Is the bull market back? That’s the question everyone is asking after the excitement over the Bitcoin ETF news gave cryptocurrencies some signs of life again.

Only time will tell, but there’s no doubt that more and more people are warming up to the idea that we may be on the brink of the next cryptocurrency bull run.

So what if you’re a new entrant and you need some solid advice on how to prepare for investing in the next cycle? Based on my personal experience and the collective wisdom of the crypto community, I’ve outlined a roadmap of 8 essential tips to help you navigate the journey ahead.

1. Investment perspective

Cryptocurrency investing is one of those areas of life where you need to have an investment point of view. That point of view doesn’t have to be long, original, or unshakable. But without one, you run the risk of wandering aimlessly through the markets, wasting your money and time.

For example, I remember the first time I got into crypto was during the bull run of 2017. I was like a kid in a candy store. At the time, every new coin I saw was shinier and more interesting than the last, so I bought a bunch of junk because I didn’t have a serious investment thesis other than “haha, crypto is cool.”

That didn’t get me very far. But fast forward to 2021, and after more reflection, I did enter the subsequent bull run with a guiding vision of doubling down on Ethereum because, in my opinion, it is shaping up to be the next great open financial and cultural layer for the world. So I fared much better when it came to diving into a real investment thesis that was gaining considerable traction in round two!

2. The best one is the one that suits you

When browsing a site like Crypto Twitter, you see all these different profile pictures, and it’s easy to forget that the people behind these accounts are all different ages and come from all walks of life. Everybody has a different story; everybody has different means.

That is, in the next bull run, you may see people around you investing large amounts of ETH into the “next big token” or “next big NFT,” which may prompt FOMO in you. As you struggle to keep up, you may be tempted to invest more ETH than you can afford.

No! Respect that you are at a different stage of investing and your cryptocurrency investing will be a marathon, not a sprint. As long as you are methodical and not reckless, you will get to where you want to be. Do what you can and only invest at a scale that is right for you.

3. DCA is your friend

In cryptocurrencies, prices can fluctuate wildly in a matter of minutes, and it’s not uncommon to see double-digit percentage changes in a single day. This can be both exciting and nerve-wracking for newcomers. Rather than trying to time the volatility, DCA is a popular and sound strategy.

The method requires a commitment to regularly buy a fixed amount of a specific asset, such as ETH, BTC, SOL, etc., regardless of its price. Rather than trying to time the market and buy at the "perfect" moment, you buy in batches over time. This can be weekly, biweekly, monthly, or any other interval that fits your investment plan.

By buying in installments, you reduce the risk of buying at the top. Even if you start investing at a high, subsequent purchases during the decline will average out your initial purchase price. Regular investments also remove the emotional element of investing. You are not constantly trying to predict where the market is going next, which can lead to rash decisions based on fear or greed. Instead, create a schedule, stick to it, and watch your investments over time - without constant monitoring or second-guessing.

4. Don’t shy away from profits

When I first got into crypto in 2017, I converted my mere $300 into ETH and made $25,000 in profits through “upside only” altcoin trading. In December of that year, Bitcoin hit $20,000 for the first time, and there seemed to be no signs of slowing down, and the entire world of crypto seemed endless.

Then a month later, the bear market began. I held onto my altcoins for the first half of the bear market, thinking things might turn around. The tokens never came back, so my $25k was gone to zero, except for my ETH. That was life-changing money that I should have taken advantage of, for sure.

I didn’t make the same mistake in the 2021 bull run because I locked in some profits along the way. But I know a lot of people who thought that the Ethereum price at $5,000 was just a halfway station on the way to $10,000 and didn’t sell before they could lock in some big profits. In the next bull run, make sure you have an exit strategy to convert some of your virtual gains into real money ; you’ll thank yourself later.

5. NFT as a leveraged bet for ETH

By investing Ethereum into select NFTs, you can take advantage of the bullish momentum in the NFT market, potentially realizing higher returns in Ethereum when you later sell your NFTs. This is the classic buy low, sell high strategy.

This is easier said than done, right? Moreover, many NFTs should not be viewed as merely financial instruments that can be turned around. However, in many cases, especially in bullish market conditions, many projects generally rise, and a turnaround is possible.

The idea here, then, is to amplify the potential for gains. This is because NFTs are highly volatile in price and have the potential to appreciate significantly, so the gains from investing in NFTs (if you pick the right NFTs at the right time) can be amplified compared to just holding ETH. This strategy is worth keeping in mind for newbies, but I would again caution against viewing every NFT as a potential comeback. Some, but not all!

6. Know your tools

Sometimes, when visibility is compromised, pilots must "fly by instruments," meaning they can only rely on their command of the aircraft's resources to navigate. So when I say "know your tools" here, I mean it metaphorically, suggesting that you practice and get your hands on as many crypto applications as possible in order to become proficient in using the web3 toolbox.

Not only will this process advance your progress through your own personal “crypto skill tree,” giving you experience and mastery, but it will also begin to reflexively feed back into your other strategies, like your investment perspective, what tokens you buy with your ROI, what NFTs you buy, and so on.

In other words, learn about the projects in the crypto market. Understand what they offer, how to make the best use of them, what challenges they face, etc. You will gain wisdom this way, which can only benefit your investment approach.

7. Don’t neglect your taxes

In a bull market, people make a lot of money, and this money is taxable income. When the next bear market begins, the value of their assets will drop significantly, but the tax burden of the previous bull market year will still be high.

So, is this a great idea? If you don’t set aside some of your earnings and prepare to pay taxes when the economy is good, you’ll likely be hit with a tax problem when the economy is bad. More people in the crypto space are affected by this than you think, and I’m one of them.

On the other hand, one of the tools used here for protection is to strategically lock in capital losses. Selling losing assets during bullish years can help offset the taxes you will need to pay on your profits. This tax-saving strategy, called tax-loss harvesting, allows you to minimize your overall tax liability before it becomes overwhelming.

8. Maintain a work-life balance

The crypto space is a 24/7 market, without the closing bells that characterize traditional financial markets. At times, it can get pretty crazy. This nonstop experience can easily turn into a vortex that pulls you away from other aspects of your life. The frenzy of a bull market can lead to overwork and burnout.

That being said, it is important to prioritize peace of mind and step back regularly. Planning specific time for market analysis, trading, and portfolio management is one way to ensure you don’t overcommit and create a balanced routine.

Additionally, occasionally “disconnecting” can give you a fresh perspective when you re-engage in your investments. It’s easy to get caught up in short-term drama, gossip, price fluctuations, etc. But if you also focus on taking a break, you’ll be able to face it all with more clarity.