How to Survive and Thrive in the Crypto Bull Market

With Bitcoin yet again at an all-time high above $69,000, it’s safe to say that we are back in a bull market. Though we don’t know for certain how high Bitcoin will go or if other altcoins like Ethereum or even meme coins will follow, this is the prime opportunity to create and secure wealth through solid investing decisions. Let’s explore some time-tested strategies to ensure the bull market is not wasted.

During bear markets, dollar-cost averaging is one of the best strategies to accumulate assets in traditional and crypto markets. DCA is the concept of setting up automated, routine buys over a period of time instead of buying everything at once. This ensures that investors get in at a more average price instead of being subject to wild price fluctuations and full capital exposure all at once. In the other direction, the same strategy can be employed in a bull market–repeatedly selling an automated amount. This could be set up weekly or monthly or associated with price targets. For example, many investors sold their Bitcoin when it broke $69,000 the first time a few days ago, so much so that the price fell by almost $10,000. There’s no shame in taking profits; otherwise, a portfolio is merely numbers on a screen, not actual gains. It’s also important to decide on these selling decisions as soon as possible, before the euphoria and emotionally biased decisions that a bull market brings take over common sense.

Even though it seems like everyone may be getting rich on memecoins, the reality is that this is closer to gambling than investing and should be treated as such. There is a survivorship bias in these markets, where the five or six memecoins that make it is reported by mainstream media, making everyone think they can easily find the next Dogecoin or dogwifhat. In reality, tens of thousands of memecoins are created daily, and the majority never break a $10,000 market capitalization. Either their early investors dump it, it turns out to be a cleverly designed scam, or it never gains traction. Though there’s nothing wrong with this type of speculation, memecoins are purely a bet on community behavior and psychology, and other cryptocurrencies may not offer as high returns but promise to be significantly safer and longer-term investments. 

Like memecoin trading, day trading and leverage trading are easy ways to lose lots of money quickly. Using derivatives or perpetual exchanges to buy exposure to $1000 worth of Bitcoin with $50 may seem like a good idea when prices are going up, but one quick downward movement and you may lose all of your money. Buying, holding, or earning interest using a DeFi protocol is much safer than risking playing with leverage. Trying to day trade is also a risky strategy and is typically not recommended unless an investor has experience with reading and understanding charts. This strategy is far from foolproof, with way more losers than winners.

With every crypto bull market, there are some projects everyone seems convinced are the next big thing. Then, when the following bull market comes around, these projects are either dead or dying. There are numerous examples from 2017 and 2021 that nobody has heard of today that were, at the time, multi-billion dollar coins and protocols. The safest bets in the crypto space are Bitcoin and Ethereum, followed by other long-established coins with real utility or interest. Speculative utility plays are those that do not have a lot of current developer attention or user interest or are still being built out but show potential to create a better system than the current market leader. Even with these coins, investors must heed caution, as good tech is not always a clear winner. For example, Ethereum is still the market leader in smart contracts and DeFi, although it is incredibly slow and has extremely expensive transactions. On paper, alt L1s like Avalanche, Fantom, Solana, and others would be easy bets, but ecosystem development and activity are arguably more important than sheer technical accomplishments.

Finally, many DeFi protocols will offer hundreds of percentage points in yield, but they will be on tokens that inflate by the same amount. This yield, unless compounded manually or automatically using a service like Beefy Finance, will ultimately be worthless, so it's important to take profits on it ASAP.

Being part of a crypto bull market is an incredibly exciting and rewarding experience. For those who’ve been accumulating coins throughout the bear market, now is the time when patience and conviction pay off, but only if you’re determined and dedicated enough not to be too emotionally attached to specific coins or the idea that it will simply keep going up. If Bitcoin goes on to skyrocket to hundreds of thousands of dollars, it can just as easily fall back to its current prices, if not lower, and profits are not real until they’re realized. This may seem pessitmisitc, but it is truly the only way to ensure that this bull market isn’t wasted on learning lessons and instead provides the opportunity for potential generational wealth.

By Lincoln Murr

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