Retail investors are famously always late to the party, flocking to Bitcoin (BTC) only when it smashes through glamorous milestones like $100,000. 

This Christmas, the dinner table will offer more than turkey and pudding. Expect curious relatives to test your crypto savvy and ask how to join the bull market. Are you ready for the spotlight?

This festive season, your “orange pill” credentials are on trial. Will you dazzle with eloquent arguments on decentralization and monetary sovereignty or crumble like a stale mince pie and just stammer, “Number go up!” under the holiday spotlight? 

Fear not — here are some tips to steer your family and friends through the crypto conversation.

Remember: You’re not a crypto guru and can’t predict the future

One of the first things you must do is make sure they know that any action taken “is their responsibility.” 

Inexperienced investors might mistake you for a crypto guru, but let’s be honest — that’s probably not the case. Chris Burniske, partner at venture capital firm Placeholder and former blockchain products lead at ARK Invest, put it:

“No one knows anything for sure about markets. The only people you know for sure are lying, are those who say they ‘know for sure.’”

When crypto markets roar in a full-blown bull run, everyone feels like the next Warren Buffett. Stay humble — admit you don’t have all the answers. Remind them not to follow your footsteps blindly like a herd of sheep. Caution is key, even in the frenzy.

Give them context on where we are in the bull market

As Bitcoin dominates headlines, everyday investors with little experience often succumb to FOMO — the fear of missing out — and rush in without fully understanding the risks. 

Retail investors are often desperate to get in fast, driven by the overwhelming hype where everybody seems to be becoming rich with crypto.

Bitcoin Roller Coaster. Source: Bitcoincoaster

Successful crypto traders counter their human instincts — they buy when crypto attention is low and sell when euphoria sweeps the market. Retail investors, on the other hand, often follow the herd, driven by emotion rather than strategy.

Burniske said the “painful reality” is that rising cryptocurrency prices inevitably draw attention, which fuels further buying. The feedback loop, which he nicknamed the “attention cycle,” accelerates when prices become extraordinary.

“The later we are in that attention cycle, the worse the entry.”

Burniske advises, “Give them context on where we are currently in the cycle.” He believes the market has been in a bull run for two years and may now enter its final stages.

So, what should you do when their “appetite for crypto exposure remains insatiable,” even if it’s possibly the wrong time to enter?

Burniske believes they should enter with an equal proportion to Bitcoin, Ether (ETH) and Solana (SOL) with a ratio of 50%/25%/25%. Burniske said that if they get trapped if the market turns into a bear market, at least “they’re holding quality.”

If they’re tempted to dive into altcoins or memecoins chasing get-rich-quick schemes, Burniske recommends advising them to allocate no more than 10% of their total investment while reminding them that it’s “at their own risk.”

Timing the crypto exit is the real challenge

Stepping into the crypto markets is easy. Many retail investors dive in with excitement, quickly seeing gains as the bull market drives prices upward. But remember, what goes up must come down.

The conditions for the crypto markets have rarely been more favorable, particularly in terms of crypto regulation and institutional adoption.

United States President-elect Donald Trump made numerous pro-crypto promises during his election campaign. Securities and Exchange Commission Chair Gary Gensler looks set to be replaced by the pro-crypto Paul Atkins, and a Solana bagholder is set to become the new US crypto czar.

Senator Cynthia Lummis has proposed a bill for the US to buy Bitcoin as a strategic reserve asset, and institutional adoption continues to soar, with crypto exchange-traded funds (ETFs) breaking new records. 

The rise of the Bitcoin ETF market capitalization. Source: CoinGlass

Given these transformative changes, some believe the historical four-year Bitcoin cycle will be replaced with a supercycle, where assets trend ever upward.

But don’t bank on it. Burniske warns that this could lead retail investors to miss the opportunity to take profits at the market peak.

“‘Supercycle’ is without fail a collective delusion.”

Burniske acknowledges that “ETFs and potential sovereign buying ‘could’ mean we don’t have as brutal a bear in the future for BTC.” However, he cautions, “Anything that goes 100x quickly is prone to at least an 80-90% crash at some point, structurally — too many people sitting on profit.”

Bitcoin’s price performance peaks and lows from prior cycles. Source: Caleb & Brown

Burniske said that it’s hard for people to grasp how sharply a cryptocurrency can decline. However, given you’ve probably roundtripped your own bags in at least one previous cycle, you can warn them of the problem. “Since you’ve lived it, you know, and now you can teach them.”

Nothing is certain except death and taxes

Armed with the knowledge you’ve given them about what to buy and when to sell, there are still further common mistakes investors can make, according to Burniske.

When investors sell during a bull market, they may watch the coin continue to soar, as no one can predict when the peak has been reached. Burniske advises teaching new investors to resist FOMO and avoid reinvesting profits in an attempt to chase further gains. This is “generally a horrible idea.”

This practice is risky because if the market suddenly collapses, investors could owe more taxes on realized gains than the value of the assets left after the crash.

To avoid falling into this FOMO trap, he recommends placing the gains out of the crypto market for 12–18 months in traditional accounts, which can provide some interest (crypto stablecoins have additional risks). This reserved money will be used to pay tax liabilities. 

Once taxes are settled, the cycle can begin anew. Burniske recommends “sniffing around again” in crypto markets when sentiment turns to apathy, typically around 12 months after the peak.

Wall Street cheat sheet: the psychology of a market cycle. Source: ResearchGate

As an experienced crypto investor, it’s crucial to help guide new investors to avoid repeating 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, they’ll be well-positioned to educate other newcomers who might jump in during the next wave of hype.