How to give valuable crypto advice to family and friends

Retail investors are notoriously late to the party, flocking to Bitcoin (BTC) only when it crosses milestones like $100,000.

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

This holiday season, your “orange pill” credentials are being put to the test. Are you swayed by the beautiful arguments for decentralization and monetary sovereignty, or are you like an old-fashioned minnow and just say, “Number up!” you stammered. In the holiday spotlight?

Fear not – here are some tips to guide your family and friends through the crypt conversation.

Remember: You are not a crypto guru and cannot predict the future.

The first thing you need to do is let them know that any action is “their responsibility.”

Inexperienced investors may mistake you for a crypto guru, but let's be honest – you might not be. Chris Berniske, holding partner at venture capital firm Plus and former blockchain product lead at ARK Invest;

“Nobody knows anything for sure about markets. The only people who lie for sure are those who say ‘we know for sure'.”

As crypto markets roar with a full-blown bull run, everyone feels like the next Warren Buffett. Be humble – recognize that you don't have all the answers. Remind them not to blindly follow your footsteps like a flock of sheep. Even in frustration, caution is key.

Give them the context of where we are in the bull market

As Bitcoin dominates the headlines, inexperienced everyday investors 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 quickly.

Successful cryptocurrency traders defy human instinct – they buy when crypto concentration is low and sell when euphoria floods the market. Retail investors, on the other hand, follow the herd, guided by emotion rather than strategy.

Burniske said the “unfortunate reality” is that cryptocurrency prices will inevitably attract attention, fueling more purchases. A feedback loop he nicknamed the “attention loop” accelerates when the price is abnormal.

“The later we are in that focus cycle, the worse it gets.”

Berniske advises, “Give them the context of where we are in the cycle right now. He believes that the market has been in a bull run for two years and may now enter the final phase.

So, even if the timing is wrong, what should you do when your crypto exposure is insatiable?

Burniske believes that Bitcoin, Ether (ETH) and Solana (SOL) should enter in equal proportions with 50%/25%/25%. Berniske said that if the market turns into a bear market, they will at least “keep their quality” if they fall into the trap.

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

Deciding when to exit crypto is the real challenge.

Getting into the crypto markets is easy. Many retail investors happily dive in, quickly seeing what they've gained as the bull market drives prices higher. But remember, what goes up must come down.

Conditions for crypto markets are not particularly favorable in terms of crypto regulation and institutional adoption.

US President-elect Donald Trump made many pro-crypto promises during his campaign. Securities and Exchange Commission Chairman Gary Gensler looks set to be replaced by pro-crypto Paul Atkins, and Solana's wallet holder is poised to become America's new crypto czar.

Senator Cynthia Lammis has introduced a bill to allow the US to buy bitcoin as a strategic reserve asset, and institutional adoption continues to grow, with crypto exchange-traded funds (ETFs) breaking new records.

Given these changes, some believe that the historical four-year bitcoin cycle will be replaced by a supercycle.

But don't bank on it. Berniske warns that this could cause retail investors to miss out on the opportunity to profit at the top of the market.

“‘Supercycle' is undoubtedly a collective delusion.”

Berniske admits that ETFs and potential sovereign purchases ‘may' mean we don't have a bearish bullish future for BTC. However, he cautions, “Anything that goes 100x faster has some 80-90% risk of crashing, structurally – so many people are sitting on the edge.”

Burniske said that it is difficult for people to understand how quickly cryptocurrency can decrease. However, if you've probably flipped your own wallet in at least one previous cycle, you may be alerted to the problem. Because you have lived, 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, Berniske says there are still common mistakes investors can make.

When investors sell during a bull market, they may see the coin's price rise as no one can predict when the peak will occur. Burniske advises new investors to resist FOMO and teach them not to reinvest profits in pursuit of more profits. This is a “generally horrible idea”.

This practice is dangerous because if the market suddenly falls, investors may pay additional taxes on the actual profit, which is more than the value of the assets left after the crash.

To avoid falling into this FOMO trap, he recommends keeping your profits outside of the crypto market for 12-18 months in traditional accounts. This withheld money is used to pay tax debts.

Once the taxes are settled, the cycle can begin again. Burniske recommends “re-sniffing” in crypto markets when sentiment turns to indifference, especially after a 12-month high.

As an experienced crypto investor, it's important to help guide new investors so they don't repeat the same mistakes in the next bull market. Encourage them to be interested in crypto when their attention span is low – or non-existent. If done right, they are well-positioned to educate other newcomers who may jump on the next wave of promotions.