With Bitcoin holding steadily around the $8,000 price range, some traders and speculators are getting excited that we might be heading into a bull market. The last bull market ended abruptly on January 17, 2018— almost four months ago from today (April 18). Between those dates, cryptocurrency has grown regarding popularity and public adoption, so it is likely that there are people who have entered the market without any true experience of cryptocurrency’s magnificent highs and lows. They don’t know how the ecosystem seems to act in times of great profits.
This is a quick guide on how to prepare yourself for the possible bull market which could be happening soon.
Don’t invest more than you are willing to lose
This is a pretty basic and well-known rule, but it is still worth mentioning. Investing in any market is a risk, regardless of how confident you are that the asset you like is undervalued and ready to rise. You keep yourself in check and actively make an effort not to overspend on cryptocurrency. At the end of December 2017, there were hundreds, if not thousands, of people who threw large quantities of their money at coins and tokens only to watch them drop significantly in price in 2018.
Watch out for FOMO (Fear of Missing Out)
During the bear market, nobody has seen much FOMO online, so it’s worth remembering what it looks like. FOMO takes the form of a blog article or forum post that is trying to tell you two things:
- Why such a coin/token is so impressive and unique
- Why you only have a limited time to invest before it rises significantly.
Posts like this can be found all over Reddit and Steemit. They are created by people who have invested themselves or marketing agencies. Their primary purpose is to get as many people as possible to invest in a particular coin (and no, they usually don’t have your best interest in mind). This is not to say that all FOMO posts should be ignored, only that they should all be taken with a grain of salt. If a post introduces you to a new coin that interests you, that’s great! However, you cannot rely on such posts to be entirely accurate and unbiased. For every coin you are interested in, you should be reading their white paper and researching their team. At the very least, you should visit their website.
Sign up for exchanges right now
During the late 2017 bull market, several exchanges closed their doors to new customers as their servers and liquidity margins could not handle them. Bittrex was one of the first exchanges to prevent new sign-ups, although they recently relaxed their rules. While volume on markets is still low, it is a good idea to sign up to some places now.
Stay away from Ponzi schemes
During bull markets, Ponzi scheme coins start to come out and infiltrate forums. Just like BitConnect, all these coins promise huge returns on huge investments— they are lying. Spotting Ponzi coins is relatively easy – visit their website, and if they suggest that you are guaranteed to make a profit, then they are not trustworthy. There is no way that anybody in any market can promise returns.
Ponzi schemes in the form of games are also becoming prominent— while CryptoKitties became a colorful and fun addition to Ethereum’s ecosystem, make no mistake that it employs Ponzi-style mechanics. For instance, the earliest adopters of the game will always make the most returns, whereas everybody else must struggle through it and waste large sums of cash.
Secure your funds
Keep your coins and tokens on a hardware wallet if you want to stay safe – you don’t want to end up like Ian Balina, who was recently hacked. During bull markets, hackers get more serious about infiltrating wallets, so be cautious. You also need to watch which links you are clicking on, especially when you are using a lot of search engines. Many hackers create identical websites to some exchanges in an attempt to fool you into handing over your login details. Generally speaking, a quick way to deter this behavior is to set up 2FA (most exchanges have this function), but don’t get complacent because even that is not a guarantee of ultimate safety. Vigilance and careful consideration are paramount.
Kai is a cryptocurrency copywriter and professional trader. He can often be found investigating various cryptocurrencies, whitepapers, and blockchain technologies. Kai has been a professional writer for 5+ years, and has invested in 50+ different coins and tokens. He also currently studies Law and Philosophy at university.