As we approach 2024, it is estimated that over 130 million people will have entered the world of cryptocurrencies. This means that many investors could soon experience their first crypto bull run. Ben Simpson, the founder of crypto education platform Collective Shift, warns newcomers that a bull market is an entirely unique experience. To prepare for the upcoming bull market, industry experts have shared their insights and advice.
One common mistake that new crypto traders make is holding onto their investments for too long. Simpson advises investors to set clear investment goals and determine the assets in their portfolios, along with a predetermined sell price for each one. This strategy can help minimize losses as bull markets can come to an abrupt end.
James Butterfill, the Head of Research at CoinShares, suggests implementing dollar-cost averaging to mitigate the volatility of cryptocurrencies. This strategy involves periodically making small asset purchases or sales, which can lower the average purchase cost and reduce the impact of volatility on one’s portfolio.
When it comes to choosing cryptocurrencies, CK Zheng, the co-founder and CIO of hedge fund manager ZX Squared Capital, recommends focusing on well-established and recognized cryptocurrencies like Bitcoin (BTC) and Ether (ETH). Butterfill agrees, stating that Bitcoin offers diversification benefits similar to other alternative assets.
Deryck Graham, the founder of crypto hedge fund Portal AM, advises investors to balance their investments between speculative and mature cryptocurrencies. He also suggests considering investment sectors such as layer 2 solutions or the metaverse and selecting tokens that have practical use and strong fundamentals.
Markus Thielen, the Head of Research at Matrixport and author of “Crypto Titans,” points out that while Bitcoin has consistently reached new highs in booming markets, new themes drive new bull markets. This supports the idea of investing in new cryptocurrencies rather than relying solely on those from previous bull runs.
Simpson, Zheng, and Graham caution against overexposure to crypto by taking loans or investing more than one can afford to lose. They also advise against trading with leverage, as it can result in significant capital losses. Simpson emphasizes the importance of taking breaks from the market and safeguarding one’s mental health.
It’s crucial to note that this article does not provide investment advice or recommendations. Investing and trading in cryptocurrencies carry risks, and readers should conduct their own research before making any decisions.