1/ How to consistently profit in crypto?
After 5 years of crypto investing, and spending #dyor hours everyday without exception, I've developed a guide which will ensure that you will never get #rekt investing in crypto.
Thread below: 👇
After 5 years of crypto investing, and spending #dyor hours everyday without exception, I've developed a guide which will ensure that you will never get #rekt investing in crypto.
Thread below: 👇
2/ This has been written for newcomers to crypto, who want to make gains without getting rekt in the process. Advanced users feel free to discuss/contribute in the replies.
3/ Quick intro about me:
Computer Science graduate, MarTech consultant at a bluechip brand, tech entrepreneur & crypto trader/investor. Been to the moon and rekt for equal measure. Used profits to see the 7 wonders and fund a master's degree at a prestigious university.
Computer Science graduate, MarTech consultant at a bluechip brand, tech entrepreneur & crypto trader/investor. Been to the moon and rekt for equal measure. Used profits to see the 7 wonders and fund a master's degree at a prestigious university.
4/ Ok, let's start with the daddy - $BTC
Crypto Twitter (CT) will throw you 100s of models about huge BTC price targets, but the truth is that $BTC will give you the smallest but most assured return. Expect maybe 3X max return in 2022. Take profits when everyone is bullish.
Crypto Twitter (CT) will throw you 100s of models about huge BTC price targets, but the truth is that $BTC will give you the smallest but most assured return. Expect maybe 3X max return in 2022. Take profits when everyone is bullish.
5/ $ETH is a better risk reward play vs. $BTC given ETH 2.0 is imminent, EIP 1559 induced token burning is on and supply has dropped on exchanges. More on this from macro investor @raoulgmi -
6/ Outside $BTC & $ETH, the safe profitable plays are layer-1 blockchains, basically Ethereum rivals. A diversified portfolio of $bnb, $sol, $avax, $algo, $luna etc. should give back 5X quite easily. Bigger list here- bit.ly/3qCiKI8
7/ Layer-2s, most of which help scale Ethereum, also look ripe for expansion. The risk is now increasing, but so is the potential reward (up to 20X). Spend sometime here to learn where you should invest - l2beat.com
8/ Before we move to a higher risk/reward category, a major word of warning. Most newbies will rush into a project looking at the unit price. This is usually a trap.
Marketcap matters, not price.
Crypto projects need to be valued on = (price X coins in circulation).
Marketcap matters, not price.
Crypto projects need to be valued on = (price X coins in circulation).
9/ Taking the popular $shib as an example, many people buy it hoping it will hit $1 someday. To get there, it needs a marketcap of $540 trillion, or 27X the annual GDP of USA!
Sorry, but this is never happening.
Sorry, but this is never happening.
10/ On the opposite side you have $yearn. At $30K per token, it may seem overpriced but it only has a marketcap of $1.04 billion. Also, it has grown 93,000% since trading began.
This analysis is simplified, there are other difficult (maybe impossible) ways to affect price.
This analysis is simplified, there are other difficult (maybe impossible) ways to affect price.
11/ Moving on, how do you find good altcoin projects outside L1s and L2s?
Whatever you think of @chamath, I agree with him that you need to treat projects like mini economies -
Whatever you think of @chamath, I agree with him that you need to treat projects like mini economies -
12/ Ask yourself:
- is there a market for the project?
- is there a product in use already? Or just hype so far?
- are there too many competitors?
- do you understand the project at all?
If you don't have clear answers here, skip the token. There are many more out there.
- is there a market for the project?
- is there a product in use already? Or just hype so far?
- are there too many competitors?
- do you understand the project at all?
If you don't have clear answers here, skip the token. There are many more out there.
13/ Try describing them in a few words, examples:
- $bat - @brave privacy browser, Web3 gateway, Solana dapp store
- $boson - Ecommerce in the metaverse
- $push - Web3 push notification system
- $vra - esports/video reward protocol
- $ar - decentralized storage
- $bat - @brave privacy browser, Web3 gateway, Solana dapp store
- $boson - Ecommerce in the metaverse
- $push - Web3 push notification system
- $vra - esports/video reward protocol
- $ar - decentralized storage
14/ Altcoin checklist #1 - Marketcap
No point getting into a great project already a few billions in marketcap. This usually means no 50-100X growth is possible.
E.g. $grt is fantastic but at $3B, how much can it grow? Maybe consider rival $cqt which is sub $100M marketcap?
No point getting into a great project already a few billions in marketcap. This usually means no 50-100X growth is possible.
E.g. $grt is fantastic but at $3B, how much can it grow? Maybe consider rival $cqt which is sub $100M marketcap?
15/ Checklist #2 - Circulating Supply
Find this on coingecko/coinmarketcap. A circ. supply below 50% often means that lots of tokens are waiting release to investors and early adopters, and they may sell for profits putting a downward pressure on short/medium term price action.
Find this on coingecko/coinmarketcap. A circ. supply below 50% often means that lots of tokens are waiting release to investors and early adopters, and they may sell for profits putting a downward pressure on short/medium term price action.
16/ Checklist #3 - Product
You can buy the hype hoping for a product, or buy the product hoping for hype. The latter is usually a better bet.
Check for wallet holder growth, adoption increase & updates from the team on Twitter/Discord/Telegram.
You can buy the hype hoping for a product, or buy the product hoping for hype. The latter is usually a better bet.
Check for wallet holder growth, adoption increase & updates from the team on Twitter/Discord/Telegram.
17/ Checklist #4 - Social strength
Community is key, and hype matters. There are 12K projects; with no social support tokens won't be noticed by retail. Check the engagement on Twitter/Discord/Telegram, understand how active they are and if devs are communicating too.
Community is key, and hype matters. There are 12K projects; with no social support tokens won't be noticed by retail. Check the engagement on Twitter/Discord/Telegram, understand how active they are and if devs are communicating too.
18/ lunarcrush.com @LunarCrush is one of the best platforms for understanding how engaged a crypto community is. They also have a free API in case you want to crunch data yourself.
19/ Checklist #5 - Team
- Does the team have a relevant background?
- Prior entrepreneurial experience?
- Industry relevant advisors/partners?
If you answer no to any, maybe drop the token. Again, there are many more out there.
- Does the team have a relevant background?
- Prior entrepreneurial experience?
- Industry relevant advisors/partners?
If you answer no to any, maybe drop the token. Again, there are many more out there.
20/ Checklist #6 - Investors
Controversial, but I think having VC money is net positive. VCs are market makers, and having cash ensures survival in a bear market. I disagree with this take by @jack
Controversial, but I think having VC money is net positive. VCs are market makers, and having cash ensures survival in a bear market. I disagree with this take by @jack
21/ But don't rush in just cos of the logos! Before you assess the VC situation, you need to learn a bit of token economics (tokenomics).
VCs give cash in return for ridiculously underpriced tokens, which are already up to 100X profitable when public trading begins.
VCs give cash in return for ridiculously underpriced tokens, which are already up to 100X profitable when public trading begins.
22/ Checklist #7 - Tokenomics
Vast topic but here's a primer. For price to go up we need more buyers than sellers. VCs and early investors are profitable from day 1 of trading and they obviously sell. Periodic selling by them puts tremendous sell pressure on the price.
Vast topic but here's a primer. For price to go up we need more buyers than sellers. VCs and early investors are profitable from day 1 of trading and they obviously sell. Periodic selling by them puts tremendous sell pressure on the price.
23/ Here's where you need to read the whitepaper/litepaper for the tokenomics part. Check for:
- Investor/team allocation Vs. public allocation
- Vesting period for investors
Low public allocation and long vesting cycles are usually bad. HUGE RED FLAG is absence of this info.
- Investor/team allocation Vs. public allocation
- Vesting period for investors
Low public allocation and long vesting cycles are usually bad. HUGE RED FLAG is absence of this info.
24/ E.g. $chicks was the most hyped up metaverse project in 2021 featuring over 50 VCs. The whitepaper has no mention of the vesting schedule & unsurprisingly the price has been crashing since launch.
It will probably bounce back later, but the sell pressure will be big for now.
It will probably bounce back later, but the sell pressure will be big for now.
25/ Let's examine a good investment now. My pick is $bat for a number of reasons:
- All coins in circulation (no sudden sell pressure)
- Tokens widely distributed among holders (low chance of whales dumping)
- Survived 2018-19 bear market and hit new all-time-high in 2021
- All coins in circulation (no sudden sell pressure)
- Tokens widely distributed among holders (low chance of whales dumping)
- Survived 2018-19 bear market and hit new all-time-high in 2021
26/ Continued:
- Product adoption growing month on month
- Partnership with Solana leadership (plus Ethereum)
- Founded by gigabrain @BrendanEich
- Constantly launching features/upgrades
- Most advanced Web3 browser
- Moderate/good social strength
- Mid size marketcap (< $2B)
- Product adoption growing month on month
- Partnership with Solana leadership (plus Ethereum)
- Founded by gigabrain @BrendanEich
- Constantly launching features/upgrades
- Most advanced Web3 browser
- Moderate/good social strength
- Mid size marketcap (< $2B)
27/ @brave is a rare web3 project that ticks all the right boxes. But will it do a 100X from here? No. More like 25X tops. Is that bad? Absolutely not.
I'd rather have an assured 10X than a risky 100X (or 0X). There are risks still (taking on Google) but all of crypto is risky.
I'd rather have an assured 10X than a risky 100X (or 0X). There are risks still (taking on Google) but all of crypto is risky.
28/ A few more things I learnt:
- Most crypto influencers will dump tokens on you. Apply the rules above before investing in their coins
- Coins with too many 0s after the decimal point need thorough examination
- Let price retrace after a major bull run before buying
- Most crypto influencers will dump tokens on you. Apply the rules above before investing in their coins
- Coins with too many 0s after the decimal point need thorough examination
- Let price retrace after a major bull run before buying
29/ Continued:
- Take profits along the way
- Keep some profits as USDT/USDC etc. to buy major dips
- Doller cost average (usually works out better long term)
- Consider moving coins to Metamask/Trezor to have self custody
- Only fools (or legends) use leverage in crypto
- Take profits along the way
- Keep some profits as USDT/USDC etc. to buy major dips
- Doller cost average (usually works out better long term)
- Consider moving coins to Metamask/Trezor to have self custody
- Only fools (or legends) use leverage in crypto
30/ Continued:
- The more profit % you chase, the lower your chances of getting there
- Invest (don't trade) over a long time horizon (6-12 months at least)
- Don't get attached to a project, drop it if the narrative changes
- The more profit % you chase, the lower your chances of getting there
- Invest (don't trade) over a long time horizon (6-12 months at least)
- Don't get attached to a project, drop it if the narrative changes
31/ If you found the thread useful, and have any comments/discussions, let me know in the replies below.
Remember, 10X is still better than capitulation, and no other market can get you there in a 12 month time horizon #tothemoon #wagmi #gm
Remember, 10X is still better than capitulation, and no other market can get you there in a 12 month time horizon #tothemoon #wagmi #gm
Recommended to follow:
@balajis @TheCryptoLark @coinbureau @joincoinsider @RaoulGMI @WhiteboardCryp1 @finematics @MessariCrypto @oddgems
@balajis @TheCryptoLark @coinbureau @joincoinsider @RaoulGMI @WhiteboardCryp1 @finematics @MessariCrypto @oddgems
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