Decorate the venue with some good advice for getting started in crypto.
As we all know, retail investors are always late to the party and rush into Bitcoin. BTC will lose $98,346 only if it breaks through an attractive milestone like $100,000.
There will be more than just turkey and pudding on the Christmas table this year. Expect curious relatives to test your cryptocurrency knowledge and ask how to join the bull market. Are you ready for the spotlight? This holiday season, your “orange pill” will be put to the test. Will you shine eloquently discussing decentralization and monetary sovereignty, or will you collapse like a stale mince pie and simply stammer “the numbers are going up!” in the Christmas lights?
Don’t worry – here are some tips to help you navigate the crypto conversation with family and friends.
Remember: you’re not a crypto guru, so you can’t predict the future.
One of the first things you should do is make sure your counterpart understands that any action is “at their own risk.”
Inexperienced investors may mistake you for a crypto guru, but to be honest, you probably aren’t. Chris Burniske, partner at venture capital firm Placeholder and former head of blockchain products at ARK Invest, said:
“No one knows anything concrete about the market.” The only people we know for sure are lying are those who say they “know the facts.”
When the cryptocurrency market rages in a full-blown bull market, everyone feels like the next Warren Buffett. Stay humble and admit that you don’t have all the answers. Be careful not to blindly follow like a flock of sheep. Caution is key, even when you’re busy.
Give us some context about where we are in the bull market
With Bitcoin dominating the headlines, inexperienced everyday investors often succumb to FOMO (fear of missing out) and jump in without fully understanding the risks. Retail investors are often desperate to jump in, driven by the overwhelming hype that everyone seems to be getting rich on cryptocurrencies.
Successful crypto traders buck human instinct: they buy when crypto attention is low and sell when euphoria rules the market. Retail investors, on the other hand, often follow the crowd and are driven by emotion, not strategy.
Berniske said it’s a “painful reality” that rising crypto prices inevitably attract attention, which in turn prompts more buying. A feedback loop he called the “attention cycle” accelerates when prices reach outrageous levels. “The later in this caution cycle you are, the worse your start will be.”
“Give context to where we are in the cycle,” Berniske advises. He believes the market has been in a bull market for two years and may now be in its final phase.
So what if it was the wrong time to get in, but “the desire to get exposure to crypto is still insatiable”?
Berniske believes it can get equal shares with Bitcoin, Ethereum Red ticker $3,510.16 and Solana Sol Red ticker $197.30
You should start with a 50%/25%/25% ratio. Berniske said that even if you get caught in a trap when the market turns bearish, “you can at least maintain quality.”
If they are tempted to jump into altcoins or meme coins in hopes of getting rich quick, Berniske advises them not to put more than 10% of their total investment into the mix, and reminds them that doing so is at their own risk.
Timing your crypto exit is the real challenge
Getting into the cryptocurrency market is easy. Many retail investors jump in with enthusiasm, thinking they can make a quick profit as prices rise in a bull market. But remember, what goes up must come down.
The cryptocurrency market situation has rarely been more favorable, especially with regards to crypto regulation and institutional acceptance.
US President-elect Donald Trump made numerous pro-crypto pledges during his election campaign. Securities and Exchange Commission Chairman Gary Gensler is expected to be replaced by pro-crypto Paul Atkins, with the Solana bagholder set to become the new US crypto czar.
Senator Cynthia Lummis has proposed a bill to require the US to buy Bitcoin as a strategic reserve asset, and institutional adoption continues to surge, with crypto exchange-traded funds (ETFs) hitting new records. Given these big changes, some believe the historic four-year Bitcoin cycle will be replaced by a supercycle where the asset will continue to rise.
But don’t rely on it. Berniske warns that this could lead retail investors to miss out on profit-taking opportunities at market peaks.
“The ‘supercycle’ is definitely a collective delusion.”
Berniske acknowledges that “we may not see such a brutal bear market for BTC in the future due to possible ETF and government buy-ups,” but warns that “anything that goes 100x faster is vulnerable to at least an $80 crash.” Structurally speaking, -90% at one point — there are too many people resting on their gains.
Berniske said it’s hard for people to understand how far crypto can fall. However, you can warn about that problem because you’ve likely sent your suitcase back during at least one cycle. “You’ve been there and you know it, so now you can teach them that.”
Nothing is certain except death and taxes
The knowledge you give them about what to buy and when to sell can lead investors to make even more common mistakes, says Berniske.
When investors sell during a bull market, they can watch the coin continue to rise because no one can predict when the peak will occur. Berniske advises teaching new investors to resist FOMO and avoid reinvesting profits in search of further gains, which is “generally a terrible idea.”
This technique is fraught with danger, because if the market suddenly crashes, investors may pay more tax on realized gains than the value of their assets left after the crash.
To avoid falling into this FOMO trap, he recommends investing 12 to 18 months of cryptocurrency market gains in a traditional account that can pay some interest (cryptocurrency stablecoins carry additional risks). This set aside money will be used to pay tax liabilities.
Once you pay the tax, the cycle starts again. Berniske recommends taking “another look” at the crypto market when sentiment turns to indifference, usually about 12 months after the peak.
As an experienced crypto investor, it’s important to help new investors avoid making the same mistakes in the next bull market. Encourage them to get interested in crypto when the attention cycle is low or non-existent. If done right, you’ll be in a good position to mentor other beginners who might come in with the next wave of hype.
