How Can We Prepare For The Bull Run In Crypto?
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The crypto market moves in cycles of bull and bear markets. After the massive bull run of 2017 and subsequent crypto winter, we saw another huge bull market in 2021. Now in 2023, the market has cooled off significantly from its highs. This has many crypto investors wondering - when will the next big crypto bull run happen? And to see how can you prepare your portfolio to take advantage of it when it happens?
When Is the Next Crypto Bull Run?
We can not pinpoint exactly when the next bull run will occur. The crypto markets are highly volatile and move based on hype cycles, adoption curves, and unpredictable external factors. However, most experts agree that the crypto market moves in four-year cycles related to Bitcoin's quadrennial halving schedule.
Bitcoin historically sees a peak sometime around 12-18 months after a halving takes place. The last halving was in May 2020, which lined up with Bitcoin hitting its previous all-time high of around $65k in April 2021. This would suggest the next cycle peak could occur sometime between mid-2023 and mid-2024. However, there are never any guarantees in crypto. It could happen sooner or later depending on various circumstances. The best approach is to prepare your portfolio to capture upside whenever the next sustained rally does arrive.
How can We Prepare for the Next Crypto Bull Market
Here are some tips on how to strategically prepare for the next crypto bull cycle:
Use Crypto to Gain Hands-On Experience
One of the best ways to prepare is to start using cryptocurrencies now during the bear market. You can get comfortable with crypto wallets, exchanges, DeFi protocols, NFT platforms, and other aspects of the ecosystem. This will allow you to take advantage much more quickly when hype returns to the markets. Consider starting small with a little bit of capital so you can learn without too much risk.
Get Involved on Multiple Chains
The 2021 bull run was largely driven by Ethereum-based NFTs and DeFi. However, the next cycle may spotlight other smart contract platforms like Solana, Polkadot, or Cosmos. You have to keep an eye on blockchain innovation and try getting involved on multiple chains. If you have assets diversified across different protocols it can help capture gains as they rotate in and out of the spotlight.
Build Capital With Airdrops
One strategy to build a crypto portfolio is collecting tokens from airdrops. You can find many new projects give away free tokens for engaging with their communities and learning about their ecosystems. The amounts start small, but can become quite valuable as the protocols grow.
Learn Crypto Security
As crypto gains more mainstream traction, cybersecurity becomes increasingly important. You can make an effort to learn proper practices to keep your assets secure. Use strong unique passwords, enable two-factor authentication, avoid phishing attempts, get a hardware wallet for large holdings, and understand how to prevent key vulnerabilities. Don't lose out on a bull run because of a hack.
Get a Hardware Wallet
On the security note, a hardware wallet like Trezor or Ledger can help protect your private keys from online threats. Once you build up more than a few thousand dollars worth of crypto, invest in one of these devices to keep the bulk of holdings offline. Only keep capital actively trading on exchanges.
Find a Trustworthy Group of People to Follow
The crypto industry has plenty of influencers with experience trading multiple cycles. Follow thought leaders on Twitter or YouTube that share insights grounded in wisdom. Also join forums or groups focused on thoughtful discussion. With wise mentorship, you'll be better prepared to evaluate emerging trends and investments.
Build a Network by Participating in the Industry
As you engage more in the crypto economy, make an effort to build connections. Join Discord servers, follow projects on GitHub, interact on social media, leave constructive feedback, and support newcomers. Over time you'll organically grow a network that keeps you on top of developments. A strong network is invaluable when crypto markets begin accelerating quickly in a bull run.
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We know that no one can predict exactly what will happen, here are some potential developments to watch for that could supercharge the next bull:
AI Crypto - Cryptocurrency is beginning to intersect with artificial intelligence in innovative ways. AI-DAO experiments like Anthropic's Constitutional DAO are one example. Other projects are leveraging AI for security, generative art, and social engagement. If AI adoption continues growing steadily in the mainstream tech sector, expect crypto to benefit from integrations.
GameFi - The play-to-earn model took off in 2021. However, the user experience for most GameFi applications is still too clunky for mainstream gamers. If developers figure out how to make blockchain games more seamless and accessible, GameFi could take the concept to new heights. Improved VR integration will also boost adoption.
Ethereum Layer 2s - Ethereum's high gas fees hampered DeFi and NFT growth during peak 2021 congestion. But work on Layer 2 scaling solutions like Optimistic and zkRollups is progressing rapidly. If these can enable a smooth user experience, Ethereum could see exponential growth of applications.
Steemit - The social network Steemit allows users to monetize content via cryptocurrency. It combines aspects of blogging, social media, and crypto. With social tokens gaining traction across many platforms, Steemit's model could catch on in a bigger way during the next cycle.
DAOs - Decentralized autonomous organizations blew up in 2021 as crypto communities coordinated to pool capital for investments.
Meme Coins - Meme coins like Doge and Shiba Inu were surprise mainstream hits during the 2021 bull run. While memes come and go quickly, they show crypto's cultural penetration. New meme coins tied to viral trends could emerge out of nowhere to ride the next bull wave.
Prepare for the Next Bull Run With DeFi
Beyond speculating on spot crypto prices, decentralized finance (DeFi) presents a major opportunity during bull markets. Platforms like Uniswap, Aave, and Compound offer ways to put crypto capital to work generating yield. DeFi returns often outpace bull run gains from holding alone.
For example, providing liquidity on Uniswap during a trading frenzy can be extremely profitable from accumulated exchange fees. And lending assets on Aave can earn interest rates far higher than traditional savings accounts. DeFi enables new ways to make money from crypto market cycles.
Start exploring trusted DeFi protocols now to get familiar with them. Begin cautiously with small capital at first. But over time look to allocate more toward DeFi leading up to the next bull market.
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Nobody can predict perfectly when the next big crypto bull run will occur or what trends will drive it. But if you strategically expand your knowledge, network, and portfolio, you can put yourself in a strong position to capitalize on the next