Please click the link to listen to the 17th episode of my weekly crypto podcast ‘Two Minute Crypto.’ These are intended to be short, single-topic ramblings on some aspect of the cryptosphere. Comments and critiques welcome.
Two Minute Crypto – Planning for the Next Bull Run
Welcome to two-minute crypto. Today I’d like to highlight the need for a well-defined plan in order to optimally benefit from the next bull run. So, of course, at this moment in time, planning how to manage gains on current under-performing investments during a bull run can seem like sheer folly. Our emotions tell us to fear the worst and retreat from crypto, but this is the last thing we should do.
Markets have cycles, this being the bear version. Certainly, some projects, indeed, many will fail, as in all asset classes and more-so at the early stages of the emergence of an asset class as with crypto. But many will also succeed and prosper, assuming we are invested in some of these eventual winners our task is the plan ahead and decide now how we will manage this success when it comes our way. For simplicity, I will personally call when a bull run when I observe a return to an uptrend on the monthly chart with a strong open and close above 10K a return of high market trade volume – arbitrary perhaps but that’s my take, at the moment.
In practical terms, let’s assume you hold 10 cryptos – 3 go to nothing, 3 stagnate and 4 take off. Great, but do you just ride the rocket until the bull run runs out of steam and possibly retraces all the way to previous lows or do you get off the freight train at some point?
Of course, you’ll say – I’ll get off but here’s the rub – in most cases, you won’t. Daily excitement as a portfolio accumulates value clouds judgment just as much as emotional angst over lost capital. You need a plan – a defined strategy for managing your investments. The details of that plan will vary by individual – some may wish to sell 10% of each crypto at a 10% gain on investment, others may sell to buy back in on a dip. Still, others will be looking for spectacular 10x returns. Each to their own, but the common thread is a plan – without it you will be carried along on the next price cycle and as sure as this bear market will run its course, so too will the next bull run. Draft your goals – write them down – stick them on a wall if you can and sit tight. Once drafted – revisit and revise them as you deem necessary as each iteration will likely sharpen your investment thesis.
Simple yes – but something many people will still fail to do.
Thanks for Listening