If history is to repeat itself, the crypto market at the end of 2021 and early 2022 could end up in complete mania.
Why such a prediction?
Bitcoin and the market cap of cryptocurrencies have had a clear 4-year cycles, at least for the short history crypto has even existed. This is because of Bitcoin's mining rewards get halved every four years. I was about to put some charts but am too lazy, but you can check them yourself from Coingecko.com. Pay attention to 2013 and 2017 when big parabolic runs happened at the end of year.
Of course, past events are not a 100% reliable indications about the future. However, there are many indicators that point that this year could end with a rally, too (stock-to-flow model with Bitcoin, for example, look that up). And if there's even a small chance the 4 year cycle still applies, it's good to have a plan for shaving some profits off the table, in case Bitcoin or other crypto goes 5x, 10x or even 100x. This is the reason I'm powering down Hive Power to liquid HIVE so that I can sell in the case we get a rally, so that I can buy back and acquire much larger stake. Not exactly sure what proportion I'm thinking of doing the trading game with, but I might go with half, depends how insane the run ends up being.
I was the type of with HODL mentality when I got into crypto, and that's certainly the most easy and reliable strategy and very profitable one, too, when you pick your coins wisely. Nothing wrong with that strategy.
But when parabolic runs happen, it's not a bad idea to exchange some of that crypto into dry gun powder.
In 2017 when I joined Hive (Steem at the time) I was a complete novice and had no understanding of the market psychology and thus I rode the wave all the way up to $8, only to witness it dropping to 20 cents in a year. If the similar happens this time, I'm going to take advantage of it.
We all know we should prepare for the worst, and invest only what we can afford to lose. However, it's good to prepare for the upside too, because crypto tends to be driven into mania every now and then. It's a good idea to have a plan for that also, so that FOMO and greed won't take the upper hand, and you don't end up with no realized profits.
But that's just what I'm thinking. You do your own research and make sure you can sleep your nights at peace when mania and depression occur at these crazy volatile markets.
