Millions of investors who have recently entered the cryptocurrency market could soon experience their first bull run, potentially occurring as early as 2024. Ben Simpson, the founder of crypto education platform Collective Shift, describes a bull market as an extraordinary and unique experience. To prepare for this upcoming market trend, experts suggest several strategies for newcomers.
One common mistake made by new crypto traders is holding onto their investments for too long due to the excitement of potential profits. Simpson advises investors to establish clear investment goals and determine the assets in their portfolios, setting specific sell prices for each one. This approach helps minimize the risk of losses, as bull markets can abruptly come to an end.
James Butterfill, Head of Research at CoinShares, recommends implementing dollar-cost averaging, which involves periodic small purchases or sales of assets. This strategy helps mitigate the volatility of cryptocurrencies in both bull and bear markets by lowering the average purchase cost and reducing the impact of market fluctuations on one’s portfolio.
CK Zheng, co-founder and CIO of hedge fund manager ZX Squared Capital, advises investors to focus on well-established and recognized cryptocurrencies like Bitcoin (BTC) and Ether (ETH). Butterfill supports this stance, stating that Bitcoin behaves similarly to alternative assets and provides remarkable diversification benefits. Deryck Graham, founder of crypto hedge fund Portal AM, suggests finding a balance between investing in speculative and mature cryptocurrencies. He advises considering investment sectors and choosing tokens with practical use, while avoiding memecoins that lack utility.
Markus Thielen, Head of Research at Matrixport and author of “Crypto Titans,” believes that Bitcoin always reaches new highs in a booming market. However, he suggests investing in new cryptocurrencies that align with emerging themes rather than relying solely on previous bull run assets. Simpson, Zheng, and Graham caution against overexposure to crypto, such as taking loans to invest or trading with leverage, which can lead to significant losses.
Lastly, Simpson emphasizes the importance of safeguarding mental health by taking breaks from crypto and market watching. This advice applies to both experienced traders and newcomers. It is essential to conduct personal research and make informed decisions when entering the cryptocurrency market, as every investment and trading move carries risks.
(Note: This article does not provide investment advice or recommendations.)