Investing in cryptocurrencies, like investing in the stock market, is a simple matter. Just buy when the price is low and sell when the price is high. Nothing to it, right?

Of course, real-life investing is more complicated than that. It’s impossible to know when a coin’s price has peaked or bottomed out. Day traders chew their fingernails down to nubs trying to predict short-term changes. Buying too soon or too late can make a big difference.

It’s even more complicated during a bull run. 

Economists define the term bull market as sustained, widespread price gains of 20% or more across a market or market segment. Experts say thriving in a bull market is a matter of sticking to principles, not making predictions about individual coins or tokens. Here are a dozen strategies that they advise.

Buy Quality, Not Novelty

In a bull market, rising prices of large-cap coins trickle down throughout the crypto world. The whole market starts gaining value.

But as the bull market matures, gains are restricted to reliable performers with realistic business plans. Coins that rise only because the best-performing coins led the market upward are sure to stop rising before the bull market is over.

You can make a lot of money with small-cap new coins in the early phase of a bull market. But experienced investors say it’s smart to shift your portfolio gradually to blue-chip coins as the market matures.

Look for Bargains

In the early phases of a bull market, some coins and tokens are undervalued – especially small-cap cryptos that are new to the market. These coins, experts say, could see dramatic, rapid growth in the favorable environment of a bull market.

Look for Promising Technologies

Few of the market’s new coins and tokens are being introduced as general-purpose replacements for fiat currency. Specialized tokens are appearing for specific purposes: decentralized finance or NFT management or to support blockchain oracles. Some of these tokens incorporate advanced technology to overcome the limitations of the market’s traditional big-cap offerings. Experts say tokens custom-built to solve a problem or address a promising market could see the biggest gains in a bull market.

Look for Growth Potential

Fundamental analysis is the practice of predicting a coin’s future value trends based on past performance. For example, some tokens have a history of appreciating in value along with the overall market, but appreciating a few percentage points more than the market average. If that dynamic is consistent, then it’s reasonable to expect the coin to continue to outperform the market during a bull run. Do your homework and you may identify tokens that deliver outstanding ROI.

Consider Small-Cap Coins

New tokens with small market caps may have strengths that they haven’t had a chance to present to the market yet. It’s hard for such tokens to attract investors when money is tight, but in a bull market they have a chance to prove their worth. The small-cap market is risky, but bull markets create the conditions for newer coins to boost their market share along with returns for investors.

Diversify

Professional investors are a notoriously cantankerous and opinionated bunch. But they do agree on the importance of maintaining a diversified portfolio during bull markets. A diversified portfolio helps you minimize risk while benefiting from market growth in different segments.

In the crypto world, a diversified portfolio might include big-cap offerings, new tokens, tokens that are active in DeFe and other growth markets, tokens associated with innovative technology, small-cap tokens that are new to the market, and more. These are the conditions that favor diversity through exchange-traded funds and index funds. It’s like investing in the whole market – which is just what you want to do during a bull run.

Reinvest

It doesn’t matter how high the market soars – if you haven’t bought in, your feet will remain on the ground. Many investors recommend buying into the bull market, selling to realize profits, and reinvesting at a higher price point. Profits essentially let you stay in the market with free money – funds you didn’t have at the beginning of the bull market.

Invest in Phases

Another way to minimize risk during a bull market is to invest gradually. You can enter the market bit by bit. If it turns out that some of your buys are losers because the price fell immediately afterward, your losses are offset by earlier buys.

Sell in Phases

It makes sense to sell in phases too. You can never be sure you’re getting the top price for tokens you sell, so sell some this week, some next week, some the week after, and so on. This technique smooths out market fluctuations and helps you maintain the overall value of your portfolio.

Prepare Your Exit Strategy

Bull markets entice investors to stay just one more day to realize higher profits. And then another. And another. Until finally a market correction brings prices crashing down and you are full of regret.

That’s why experts recommend that investors plan in advance. Make a decision to leave the market when your portfolio hits a certain price – and keep that commitment. You might miss out on some extra growth, but you could also protect your profits from falling prices.

Minimize Risk With Derivatives

Derivatives like options are great during bull markets because they are designed to minimize investor risk. If you’re working with an exchange that handles crypto derivatives, consider investing part of your portfolio in options or futures. They’re excellent vehicles for participating in market growth while protecting your bottom line against market reverses.

Define Your Personal Goals

Are you investing to ensure that your toddler will be able to afford university someday? If so, a long-term hodl strategy makes sense. Are you building a retirement nest egg? Then you may want to sacrifice some growth opportunities in return for minimizing risk. If you’re in your 20s and looking to invest discretionary income, then it’s reasonable to include some high-potential high-risk tokens in your portfolio. While it is important to understand the market, understanding your own goals and needs is just as important.

Remember, There Are no Sure Things

Bull markets are exciting, but the crypto market will always have winners and losers. Savvy investors balance risk with growth potential to build portfolios tailored to their particular needs. It’s essential to do your homework. If you research the options and define your goals, you will be well prepared to reap the benefits of a bull market.