Miles Deutscher

Miles Deutscher

20-04-2022

18:57

The honest truth is that building a successful crypto portfolio isn’t easy. But it can pay off massively. 90% of crypto investors will likely fail, and those who succeed often rely on luck. Now let’s remove the guesswork. 🧵: Your guide to managing a successful portfolio. 👇

2/ In this thread, I’ll be covering: • Investing vs trading • Portfolio allocation • When you should sell • How to save time whilst maximising gains (not financial advice of course).

3/ Firstly, you must make a distinction between being an investor and a trader. Traders: Buy and sell positions frequently, aiming to make short term profits. Investors: Aim to generate profitability over a longer time horizon.

4/ The truth is that 99% of “traders” would be better off investing. The tax implications of trading, combined with the high degree of difficulty and risk - often outweigh the benefits. The safest approach for most is to HODL, farm, and rebalance.

5/ However, I do see the merit in making quick flips & short-mid term holds. That’s why I split my portfolio: • 85% main portfolio • 15% active trading

6/ This way I can still have fun flipping NFTs, but the majority of my portfolio is “safe”. Your individual % allocation to trading will depend on your skill set, time commitment and personal preference. At the end of the day, the strategy you stick to is the one you enjoy!

7/ Now the main portfolio (85%) is further comprised by subsets. At all times I aim to have 50% in the blue chips: $BTC, $ETH (you could also include $LUNA, $SOL, $AVAX in here). I also aim to keep at least 20% in stables at all times.

8/ There are only ever 4 reasons to sell from your HODL portfolio (as a long term investor): 1. If you need money to live 2. If you need to rebalance 3. If you need money to reinvest (new opportunities) 4. If your thesis has changed

9/ Taking profits can fall under categories 1 or 3. Put a concrete profit-taking system in place and stick to it, no matter what emotions you’re feeling. Remember, trade like a robot! Here’s my personal profit taking strategy:

10/ The harsh truth is that: Many projects that are in the top 50 now will likely not be there in 3-5 years (look at 2018 vs now as an example). This is a screenshot from August, 2018:

11/ The solution? Don’t marry your bags. Yes, we want to be holding the majority of our top conviction plays long term. But if there’s a narrative you foresee “dying”, or your thesis changes, then don’t be afraid to consolidate holdings into better projects.

12/ Opportunity cost is “the loss of potential gain from other alternatives when one alternative is chosen.” Translation: If there’s a better investment available at any given time, take it!

13/ Just don’t chop and change recklessly. Make sure you consider: • Market conditions • Where big money is flowing • Narrative hype cycles • Your own emotional bias Before making any rash decision to sell off one of your holdings.

14/ Remember, this all comes down to personal preference. Just because I split my portfolio 85/15, doesn’t mean you have to too. The beauty of crypto is that everyone is different. What works for me may or may not work for you. But we’re all here to help each other grow.

15/ Take some time to consider your: • Financial goals • Risk tolerance • Current financial situation • Conviction and biases You shouldn’t invest a single $ until you have concrete answers to these topics. You can write them down on a piece of paper. ✍️

16/ So now you’ve considered your goals, it’s time to get to work. Here are some of my top tips for managing a successful crypto portfolio. Firstly, diversify whilst specialising. 👇

17/ Diversification in crypto is key in terms of capturing the overall market trend and limiting risk. But if you wish to truly become a great investor, you must find your niche. This may be an ecosystem (FTM, AVAX), specific narrative (privacy, gaming) or even a project.

18/ Becoming an expert in one field is much more advantageous than becoming mediocre across 5 fields.

19/ But if you become an expert in one field, then how on earth can you afford to diversify and keep on top of a balanced portfolio? Well, you don’t have to. Leverage two of the most powerful skills in business: Outsourcing and collaboration.

20/ How can you do this? Build friendships online (Twitter and Discord are great places). Get together and create a group where you: • Regularly get together online and meet to discuss crypto • Share ideas • Compare strategies • Bond and learn together

21/ Learning from others is the greatest way to grow! Think about it logically. Someone might spend 10 hours researching a topic, then share a summary of that research with you in 10 minutes. You’re essentially saving 9 hours and 50 minutes of time for the same outcome!

22/ For example, I joined @crypto_banter at the start of the year so I could be surrounded by like minded people. Got a gaming question? Ask @HustlepediaYT. Fundamentals? Ask @cryptomanran. Trading? Ask @Sheldon_Sniper. Build your own crypto avengers!

23/ You can also achieve the same effect via following quality content creators. If you can sift the good creators from the bad, then you’re effectively getting access to hours of their research at the cost of just a few minutes of your time.

24/ But that’s not an excuse to get complacent! Consuming additional content should be the cherry on top of a consistent and multi-faceted research approach. Nothing beats building real relationships in the space.

If you enjoyed this thread, please do me a favour by liking and retweeting the first post. 💙



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