Source: Cointelegraph Original: "{title}"

Retail investors always arrive late, only flocking in when Bitcoin (BTC) breaks through the glorious milestone of $100,000.

This Christmas, the dinner table will not only feature turkey and pudding. Curious relatives will test your knowledge of cryptocurrency and ask how to join the bull market. Are you ready to face the spotlight?

During this holiday, your "orange pill" credentials will be put to the test. In the festive spotlight, will you launch into a lengthy discourse on decentralization and monetary sovereignty, or will you be as fragmented as a spoiled meat pie, stammering, "The numbers are up!"?

Don't worry, here are some tips to guide your family and friends in cryptocurrency conversations.

The first thing you must do is ensure they know that any actions taken "are their responsibility."

Inexperienced investors may mistakenly think you are a cryptocurrency master, but honestly, that may not be the case. Chris Burniske, a partner at venture capital firm Placeholder and former blockchain product lead at ARK Invest, says:

"When the cryptocurrency market is roaring in a full bull run, everyone feels like the next Buffett. Stay humble—acknowledge that you don’t have all the answers. Remind them not to blindly follow your lead like sheep. Even in the frenzy, caution is key."

As Bitcoin becomes the headline star, inexperienced retail investors often fall victim to FOMO (fear of missing out), rushing in without fully understanding the risks.

Driven by overwhelming hype, retail investors are often eager to jump in quickly, as it seems everyone can get rich through cryptocurrency.

Bitcoin roller coaster. Source: Bitcoincoaster

Successful cryptocurrency traders act on human instincts—they buy when cryptocurrency attention is low and sell when the market is euphoric. Retail investors, on the other hand, often go with the flow, driven by emotions rather than strategy.

Burniske notes that a "painful reality" is that the rise in cryptocurrency prices inevitably attracts attention, which further fuels buying. He nicknames this feedback loop the "attention cycle," which accelerates when prices become extraordinary.

Burniske suggests, "Let them understand the context of the cycle we are currently in." He believes the market has been in a bull run for two years and may now be entering its final phase.

So, what should you do when their "interest in cryptocurrency remains unquenched," even if it may be the wrong time to enter the market?

Burniske believes they should proportionally enter Bitcoin, Ethereum (ETH), and Solana (SOL) at a ratio of 50%/25%/25%. Burniske says that if the market turns bearish and they get stuck, at least "they hold quality assets."

If they are tempted to jump into altcoins or memecoins, chasing quick riches, Burniske advises them to allocate no more than 10% of their total investment while reminding them that "the risk is theirs to bear."

Entering the cryptocurrency market is easy. As the bull market drives prices up, many retail investors excitedly dive in and quickly see returns. But remember, what goes up must come down.

The conditions in the cryptocurrency market are rarely more favorable than now, especially regarding cryptocurrency regulation and institutional adoption.

President-elect Donald Trump made many promises to support cryptocurrency during his campaign. Gary Gensler, the chairman of the U.S. Securities and Exchange Commission, seems likely to be replaced by Paul Atkins, who supports cryptocurrency, while Solana's contractors will become the new U.S. cryptocurrency czars.

Senator Cynthia Lummis has proposed a bill requiring the U.S. to purchase Bitcoin as a strategic reserve asset.

Bitcoin ETF market capitalization rising. Source: CoinGlass

Given these transformative changes, some believe Bitcoin's four-year historical cycle will be replaced by a supercycle, with the asset showing a continuous upward trend.

However, don't hold your breath. Burniske warns that this could lead retail investors to miss opportunities to profit at market peaks.

Burniske acknowledges that "ETFs and potential sovereign buying 'might' mean our future BTC bear markets won't be as brutal." However, he reminds us that "structurally, anything that rises 100 times quickly is prone to at least an 80%-90% crash at some point—too many people are sitting on profits."

Bitcoin price peaks and troughs in previous cycles. Source: Caleb & Brown

Burniske says it’s hard for people to grasp how much cryptocurrency can drop. However, since you may have gone back and forth with your own bag at least in one previous cycle, you can remind them of this. "Since you've been through it, you know, and now you can teach them."

Burniske points out that while investors may have mastered the knowledge of buying and selling, they can still make some common mistakes.

When investors sell during a bull market, they may watch coins continue to soar, as no one can predict when the peak will be reached. Burniske suggests teaching new investors to resist FOMO and avoid reinvesting profits in an attempt to chase more gains. This "is usually a terrible idea."

This practice is risky because if the market suddenly crashes, investors may owe more in taxes on realized gains than the value of their assets after the crash.

To avoid falling into this FOMO trap, he suggests keeping the profits from exiting the cryptocurrency market in traditional accounts for 12-18 months, as traditional accounts can provide some interest (crypto stablecoins carry additional risks). This reserved fund will be used to pay taxes.

Once the taxes are settled, a new cycle can begin. Burniske suggests that when market sentiment turns indifferent, usually about 12 months after a peak, it's time to "sniff around" the cryptocurrency market again.

Wall Street cheat sheet: The psychology of market cycles. Source: ResearchGate

As an experienced cryptocurrency investor, helping to guide new investors to avoid repeating mistakes in the next bull market is crucial. Encourage them to take an interest in cryptocurrency when attention cycles are low or non-existent. If done correctly, they can educate others who may join in the next wave of excitement.

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