Ever since the 18th century, the term “bull market” has been the Wall Street equivalent of a thumbs-up emoji, so today we will answer the question what is a bull market. It’s so revered that there’s a bull statue near Wall Street, presumably because only the short sellers celebrate bear statues.
Definition and Characteristics of a Bull Market
In the animal kingdom of finance, a bull market is when stock prices decide to go on a northward hike. Think of it as the market’s way of saying, “Let’s party!” It’s like this across the board, from stocks to digital assets.
What is important to note about these bull markets is that most people use the dollar as a unit of account. If you measure things with bitcoin then you can rest assured your percentage of the network is x/21 million that will ever exist.
Factors Influencing Bull Markets
A bull market in stocks is like a good mood fueled by strong economic espresso shots – think rising GDP and profits. For Bitcoin, it’s a cocktail of factors: more people joining the Bitcoin bandwagon, big institutions giving it a nod, hodlers simply refusing to sell, and sometimes the economy doing weird things that make Bitcoin look like the financial superhero.
Historical Context and Frequency
Since 1877, we’ve had 26 bull markets, each strutting its stuff for about 42 months on average. It’s like a financial marathon with the markets usually crossing the finish line with a decent profit. Bitcoin, however, dances to its own techno beat, with its decentralized nature and limited supply, making it the unpredictable star at the bull market bash.
Bitcoin usually does what people least expect of it. No matter how many obituaries are written about the ~15 year old digital asset, bitcoin keeps having higher highs and higher lows.
Strategies During a Bull Market
If someone was giving traditional market advice then they might tell you “When market bulls are running, it’s tempting to join the stampede. But hold your horses! It’s wise to rebalance your portfolio – think of it as a financial diet to keep things in shape. And remember, trying to predict the market’s peak is like trying to guess the next winning lottery numbers – thrilling but not exactly a plan. Also, use this time to beef up your emergency fund; it’s like putting life jackets on your finances.”
Bitcoiners would simply tell you to stack sats, don’t ever stop stacking sats, and if you have chairs then understand the opportunity cost of holding those chairs instead of stacking sats. Bitcoin is only going to monetize itself once.
Avoid leverage, save in bitcoin, and free up cash flows. Trying to time markets is a fool’s game where 0.0001% of participants day trading will be successful and the rest will get caught holding the bag. Humanity finally has a truly scarce form of money and the opportunity cost of trying to trade it during a bull market will cost a lot of people a lot of money.
Conclusion
Pain is often the best teacher. In the same way a kid learns not to touch a hot stove after touching a hot stove, Bitcoiners learn to stop playing fiat games with the world’s greatest form of money. Learn from your mistakes. Insanity is doing the same thing over and over and expecting different results. Embrace the unique lessons that Bitcoin and bull markets offer. The path to financial wisdom is paved with the bricks of past experiences.
