It is clear that we are living crazy bullish times in both crypto and the stock markets and probably none of us want for the party to end. I start to have the feeling from previous bull cycles when I didn't take profits and I would imagine that there is nothing stopping my assets from mooning. But guess what happened? The bear market hit and I had to wait for another cycle, for another 4 years to get in the same spot somehow, but not quite there as I've diversified in multiple assets and not all performed greatly for now. So, without talking about this too much I just want to say: Get ready, take profits, retire!
The bull run beast is loud, fast and full of rage and hype
The first time I've experienced a crypto bull run back in 2017, it felt like I’ve discovered a secret level in Mario Bros. Everything was going up. Bitcoin and Ethereum were mooning at levels appropriate for that year. Even that random coin named after a frog with a hat went up and everyone was speaking as if they invented crypto. As I was on the investor side, I was starting thinking I'm the next Warren Buffett… until I've realized that even him would probably laugh at my inability to understand the market and act accordingly from his comfy chair in Omaha.
Nevertheless, the hype is contagious. My friends who swore “crypto is a scam” when we were at BBQ, suddenly were messaging me and inviting me for a coffee or beer, just to be asking me about “the next Dogecoin”. Also recently a Uber driver was speaking to me as if he was a financial advisor. Everybody now is an investor, an analyst and the next Warren Buffett... But here’s the thing: hype feeds greed, and greed blinds you to the most important button in your portfolio, the sell button.
Taking profits in order not to haunt me with my mistakes
I am not any expert, I am just a rookie who is speaking from past experiences: I don’t go broke taking profits. I go broke holding on for “just a little more”, trying to squeeze few more pennies. While I have set some clear exit criteria, it seems that my greed makes me a "professional" in this field. I once held my shiny stack of ETH like it was Gollum’s ring, only to watch it fall 80% while I whispered, “It’ll bounce back… right?” Spoiler: it didn’t bounce until four long years later. And what do I do now? When it is close to $5k which by the way is my exit price point, I am thinking that maybe I should up my target. I feel like I am cheating myself if that can be a thing. 😁😆
What I can say when I have some glimpses or reasoning is that we should try to live by the rule that when our portfolio starts looking like the GDP of a small country, we should take some off the table. Pay off any debt that we might have. Buy a house and put some for rainy days aside. Maybe we should also book a vacation. And the ultimate goal: retire early if the numbers line up. And while probably most of us can’t retire yet, at least we can lock in enough profit to sleep at night without refreshing CoinGecko at 3 a.m. 🦄🤑 Profits in our wallet beat the numbers on a screen!
Bears can be friends and not foes trough the reinvestment game
Now here’s where the plot twist comes in and how I intend to play it. Bull runs are fun, but bear markets? That’s where legends are made. Prices crash, hype dies, influencers crawl back under their rocks, and suddenly… the discounts are everywhere. This is when we can truly reinvest. We can take a portion of the profits we booked (you did book profits, right? 😁 ) and start scooping up coins like they’re on clearance at Walmart. That’s what sets us up for the next bull cycle. And at this point we can trim what coins are really valuable based on past experiences and cycles that they've weathered.
We can think about this like a video game: the bull run is the boss fight, but the bear market is where we farm items and level up for the next battle. If we skip the farming, we’ll enter the next bull run swinging a wooden sword while others show up with bazookas. So, what do you prefer? Well, I surely would like to hold the stick. 😉
I find it really difficult to abstain from FOMO and hype, which I know are tricking me into being my own worst enemy. Instead of eating my nails, I should celebrate the bull run, take profits like a champ and maybe be a step closer to retire. And when the bears come out? I can come back with a smile, because that’s when I can quietly reload my bags. I didn’t take profits in my first bull run. I didn’t take enough in my second. But in this one? Oh, I’ve already got my finger on the sell button. Because nothing tastes sweeter than profits I actually locked in. Except maybe pizza… bought with Bitcoin. But in this bull run at least I've sold Bitcoin as a high enough price, next is Ethereum and others are there in the queue. But nevertheless, I intend to have almost a clean sheet at the end of this cycle.