How can retail investors capitalize on the upcoming bull market over the next two years?
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How can retail investors capitalize on the upcoming bull market over the next two years?
The Cancun upgrade will become the major narrative theme of 2024, making now a historic opportunity to buy ETH.
Navigating Web3 tides with focused insightsAuthor: NingNing
According to the Merrill Lynch Investment Clock framework—using the U.S. economy as a benchmark—we are transitioning from stagflation into recession. During this phase, financial markets typically see risk assets rebound in anticipation of rate cuts, which is one of the key drivers behind the current rally in both the crypto market and the Nasdaq Index.
Looking back at historical data on the Merrill Lynch cycle since the 21st century, the period between confirmed economic recession and actual interest rate cuts is prone to black swan events. This widely recognized pattern caused many institutions to miss out on the small bull market that began in October.
However, although a likely black swan event in 2024 may liquidate many people's futures accounts and cause large red numbers in our portfolio PnLs, it won’t prevent the arrival and progression of a two-year long-cycle bull market.
Therefore, at the end of 2023, it’s essential for us to plan how we will invest, manage finances, and trade during the upcoming two-year bull market.
So, emulating Xiao Hei Ge (Authur)'s meditation practice, I’ve arrived at three investment insights:
1. Expand your personal balance sheet steadily in a Web3-native way
Looking back at dominant figures who rose quickly during the last bull run—SBF, Do Kwon, and Su Zhu—one common strategy was leveraging DeFi lending platforms to expand their balance sheets.
For example, deposit ETH as collateral on AAVE, then borrow up to 80% of its value in ETH, and reinvest those borrowed ETH into new narrative-driven assets with potential alpha returns.
The advantage? You gain exposure to both beta returns from ETH and potential alpha from emerging narrative assets.
The downside? It demands extremely sophisticated portfolio allocation and capital management.
2. Reduce trading frequency, exercise patience, and hold your portfolio long-term
Last week, using the backtrader library, I conducted a comprehensive backtest comparing trend-following, mean-reversion, and buy-and-hold strategies for BTC, DOT, and Doge during the previous bull market. The results showed that the buy-and-hold strategy significantly outperformed both trend and reversion strategies.
I expect the same outcome in this cycle.
After constructing your portfolio using the method above, adopt a "watch more, act less" approach—learn to buy when no one else is looking, and sell when everyone is crowded in.
3. The Dencun upgrade will be the dominant narrative of 2024—it’s a historic moment to buy ETH
This insight aligns with Xiao Hei Ge’s view: the Dencun upgrade will refocus market attention on Ethereum and its ecosystem projects. Amid the hype, ETH is poised to rise above $5,000 and potentially break $10,000 within the year.
That’s all.
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