- Crypto markets follow predictable four-year cycles with accumulation, growth, bubbles and inevitable crashes.
- Controlling emotions and planning exit strategies are key to avoiding losses in volatile crypto markets.
Lark Davis, a well-known crypto expert, warns that most investors are unprepared for what lies ahead. In his recent YouTube video, “Why 99% of Crypto Buyers Will Lose Money in 2025,” Davis analyzes the risks of market cycles and provides actionable advice moving forward.
Understanding crypto market cycles
According to Davis, the crypto market operates in predictable four-year cycles with an accumulation, expansion, bubble period and subsequent crash. Big events like Bitcoin halved and the launch of exchange-traded funds (ETFs) have historically fueled these cycles.
For example, Bitcoin fell low and lost 77% of its value when the FTX market crashed in late 2022; some altcoins fell over 90%. Such events marked the accumulation phase in 2023 – that is, generated uncertainty and terror.
Guided by Bitcoin ETFs and lower bids after the halving event, the market began to recover by 2024 and Bitcoin rose above $100,000.
But Davis notes that because the market is saturated with hype and speculative money, 2025 is likely to be the era of the bubble. He warns that this stage – the one where retail investors are most prone to emotional decision-making – is one that requires prudence.
Psychology drives the market
Emotions drive the crypto market; greed and fear rule the behavior of investors. Davis demonstrates this by comparing changes in the price of Bitcoin to the “psychology of the market cycle.” While bear markets bring denial, panic and capitulation, confidence turns to euphoria as prices rise in bull markets.
Making sound investment judgments requires emotional regulation, according to Davis. For example, he argues that selling during times of extreme greed and investing in moments of anxiety tend to produce better results compared to blindly following the crowd.
It emphasizes the need for a well-defined plan, especially an exit strategy, to prevent institutional investors from becoming “liquidity exits”.
Recognizing warning signs
Bubble tops are sometimes accompanied by too much media publicity and wild forecasts, including Bitcoin exceeding unrealizable price levels. According to Davis, investors should be cautious even if we are not yet at this level.
While they are far from the highs seen during the 2021 bull market, Google searches Bitcoin are growing, he notes.
Davis stresses the need for thorough preparation if one wants to negotiate the stormy market ahead. He advises investors to focus on choosing which cryptocurrency to sell, determining the amount of assets to sell, and monitoring market signals that may indicate a potential spike.
He points out that many investors will be left with depreciated assets without preparation because the end of a bull market usually comes sooner than expected.
Planning for long-term success
Finally, Davis once again emphasizes that the volatility of the crypto market is its main attraction as well as its main risk. Although the excitement of bull markets is tempting, unprepared investors can be completely wiped out by the rapid and sometimes dramatic collapses that follow.
Understanding market cycles, managing emotions and following a strong plan will help investors increase their resilience. The end always comes, as Davis warns. Without a strategy, you will be someone else’s exit liquidity.
