8 Tips to Master the Next Bull Market

Is the bull market returning?? That's the question everyone is asking after BTC ETF excitement brought signs of life back to crypto last week. 

Only time will tell for now, but there's no question that more people are starting to warm up to the idea that we might be on the verge of the next crypto bull run. 

So, what if you're new here or know someone new here, and you want some solid advice on how to prepare for investing during this next cycle? I've outlined a roadmap of 8 fundamental tips drawn from my personal experiences and the collective wisdom of the crypto community to help you soundly navigate the journey ahead.

1. Form a thesis

Crypto investing is one of those things in life where you want to have a thesis. It doesn't have to be long, original, or set in stone. But without one, you run the risk of wandering rudderless through the market, wasting your money and time. 

For instance, I remember first getting into crypto during the 2017 bull run. I was like a kid in a candy store. At the time, it seemed like every new coin I saw was shinier and more interesting than the last, so I bought a bunch of crap because I didn't have a serious thesis yet beyond "haha, crypto cool."

That didn't get me far. But fast forward to 2021, and after much more thinking, I did enter the ensuing bull run with a guiding vision, namely to double down on Ethereum because, in my view, it was becoming the world's next great open finance and culture layer. So, in going deeper into a real thesis that got some considerable traction my second go 'round, I fared much better! 

2. Your size is your size

When surfing something like Crypto Twitter, you see all these different flat profile pictures, and it can be easy to forget that the people behind these accounts run the gamut of ages and come from all different walks of life. Everyone has different stories; everyone has different means. 

All that's to say, in the next bull run, you may see people around you throwing around huge stacks of ETH into the "next big coin" or the "next big NFT," and this may prompt FOMO in you. You may be tempted to invest more ETH than you can afford to lose as you try to keep up. 

Don't! Respect that you're at a different point in your journey and that building up your crypto will be a marathon, not a sprint. You'll get to where you want to get by being methodical, not reckless. Play within your means; only ever invest in the size that's right for you. 

3. DCA'ing is your friend

In crypto, prices can swing wildly in minutes, and it's not uncommon to see double-digit percentage changes in a single day. For newcomers, this can be both exhilarating and nerve-wracking. Instead of trying to time things amid volatility, Dollar-Cost Averaging (DCA) is one popular and sound strategy. 

The DCA approach entails committing to purchase a fixed dollar amount of a particular asset, e.g., ETH, BTC, SOL, etc., at regular intervals, regardless of their price. Instead of trying to time the market and buy in at the "perfect" moment, you spread out your purchases over time. This can be weekly, bi-weekly, monthly, or any other interval that suits your investment plan.

By spreading out your purchases, you reduce the risk of buying at a peak. Even if you start investing at a high point, subsequent purchases during dips will average out your entry price. DCA'ing also removes the emotional aspect of investing. You're not constantly trying to predict the market's next move, which can lead to rash decisions based on fear or greed. Instead, set up a schedule, stick to it, and watch your investments over time—no need for constant monitoring or second-guessing.

4. Don't shy from profits

When I first got into crypto in 2017, I turned the only $300 I had into ETH and then into $25,000 through "up only" altcoin trades. In December of that year, Bitcoin had just hit $20k for the first time, and at the time, it seemed like there was no slowing down and that the sky was the limit for the rest of crypto, too. 

One month later, though, a bear market began. And I held my altcoins through the first half of that bear, thinking that things might turn around. Those coins never came back, so besides my ETH, I effectively round-tripped that $25k back down to zero. To be sure, that was life-changing money that I should have capitalized on. 

I didn't make the same mistake in the 2021 bull run, as I locked in profits here and there along the way. But I know more than a few people who thought $5k ETH was a pitstop on the way to $10k ETH that year and didn't sell when they could have locked in some serious profits before the next bear. In this next cycle, make sure you have an exit strategy to turn some of your paper gains into IRL money; you'll thank yourself later. 

5. NFTs as leveraged bets on ETH

By investing ETH into choice NFTs, you might be able to capitalize on the bullish momentum in the NFT market to potentially realize higher returns in terms of ETH when you sell your NFTs later. The classic buy low, sell high maneuver. 

That's easier said than done, right? And many NFTs shouldn't be approached as just financial instruments to be flipped. Yet, in more than a few cases, flipping is possible, especially in bullish market conditions where many projects rally across the board. 

The idea here, then, is the potential for amplified gains. That's because NFTs can have high price volatility and the potential for significant price appreciation, so the gains from investing in NFTs — if you pick the right ones at the right times, that is — could be amplified compared to just holding ETH. This strategy is something to keep in mind for newcomers, but again, I caution against approaching every NFT as a flip. Some, sure, but not all!

6. Learn your instruments

Sometimes, when visibility is compromised, pilots have to "fly by their instruments," meaning they can only rely on their mastery of their plane's resources to navigate. So when I say "learn your instruments" here, I'm metaphorically saying to practice and get hands-on with all the crypto apps you can so you can gain proficiency across the web3 toolbox. 

Not only will this process advance your progress through your own personal "crypto skill tree," giving you experience and mastery along the way, but it'll also start to reflexively feed back into your other strategies here, like what your overarching thesis is, what coins you DCA into, what NFTs you buy, and so forth. 

In other words, learn the projects here. Learn what they offer, how to use them well, what challenges they face, etc. You'll gain wisdom this way that will only enhance your investment approaches. 

7. Don't neglect your taxes 

Amid bull runs, people make a lot of money, and that money is taxable income. When the next bear market begins, their assets' values come way down, but their tax burdens from the previous bullish year remain high.

The big idea, then? If you don't set aside some gains and prepare for your taxes during the good times, you'll likely be shellacked by them during the bad times. More people in crypto have been hit with this scenario than you might think, and I'm one of them. 

On the flip side, one tool in your arsenal to defend here is locking in capital losses strategically. Selling assets at a loss during a bullish year can help offset the taxes you'll owe on your gains. This tax-saving strategy, known as tax-loss harvesting, allows you to minimize your overall tax liability so your tax burden doesn't become unbearable. 

8. Maintain a work-life balance

The crypto space is a 24/7 market devoid of the closing bells characteristic of traditional financial markets. It's also just downright crazy at times. This relentless experience can easily morph into a vortex that pulls you away from other aspects of life. The euphoria of a bull market can, yes, lead to overexertion and burnout.

That said, prioritizing your mental peace and periodically stepping back cannot be overstressed. Setting aside specific times for market analysis, trading, and portfolio management is one way to ensure you never overdo things and create a balanced routine. 

Additionally, "unplugging" every now and then allows for a fresh perspective when you re-engage here. It's easy to get caught up in the minute-to-minute drama, intrigues, price movements, etc. Yet you'll be fresher in facing all these things if you invest in rest, too.