Crypto Positions

As someone who’s been actively involved in trading and holding cryptocurrencies since 2017, there are a few pieces of advice I can share with you.

It is typically recommended to dedicate a significant portion of your cryptocurrency portfolio to Bitcoin. In the end, Bitcoin dictates the market even though it’s an old and outdated project from a technology standpoint. Personally, though, I do not own any Bitcoin since in the end there are a countless number of other projects that will earn me a higher ROI, %-wise.

My portfolio mainly consists of Ethereum. I personally expect Ethereum to flip Bitcoin in terms of market capitalization within a few years. The Ethereum platform and its technologies are used by hundreds or thousands of blockchain projects already, and it’ll continue to play a massive role in the crypto and blockchain space going forward. There is also the ongoing ETH2.0 roll-out, which overall is a huge upgrade.

I furthermore focus a lot on Polkadot (DOT) and Kusama (KSM). These are two very closely related projects and will, in the future, be connected via a bridge. The Kusama parachain auctions are live, and the Polkadot parachain auctions will commence later this year. I won’t dive into what parachain auctions are, but their consequence is that a lot of KSM and DOT tokens will be locked for ~48 weeks, which is obviously beneficial for their prices from a supply/demand perspective. DOT/KSM are also miles ahead of competing projects such as Cardano, which to me looks like a $95bn marketing/hype project (no working product, no customers – although I do respect Charles Hoskinson).

I also like Chainlink (LINK) a lot. This is also a project which is here to stay. From a price perspective, LINK typically moves independently from most other cryptocurrency tokens. It also tends to lift off in later stages of the market cycle. Definitely a long-term hold for me.

I also hold Binance Coin (BNB). Binance is by far the largest cryptocurrency exchange and their native BNB token is very much in demand driven by all sorts of events and features on their exchange, (e.g. Launchpool /Launchpad), the Binance Smart Chain, etc. Even though it’s in fact a CeFi (centralized Finance) as opposed to DeFi (decentralized Finance) project, their smart chain works really well and their team has done an incredible job over the last few years.

I furthermore hold Nexo tokens. Why? To earn passive income (interest) paid out daily. The more Nexo you have as a % of your total portfolio, the higher your loyalty ranking. Higher ranking = higher rewards. 

A very small portion of my portfolio (1-2%) is dedicated to high-risk, high-reward projects. Potential moon shots with a high failure rate. Think Shiba, Elongate, etc. but also non-meme projects with a very low market capitalization. Best is to minimize your exposure to such projects, although it can be fun and rewarding at times.

Some takeaways:

• Stick to the basics; BTC, ETH, and some other (established) projects should comprise the majority of your portfolio
• Focus on a limited number of projects (5-8, max. 10). There really are too many projects so you could e.g. identify certain areas like DeFi, file storage, supply chain, NFTs, crypto ecosystems, etc. and pick like 1 interesting project per category to have a broad exposure
• Earn passive income: stake your crypto on e.g. Coinbase, Binance, Nexo, Kraken, etc. and earn 5-15% interest annually
• Make a plan: when to cash out? What’s my minimum required ROI? Doing this prevents you from making decisions driven by emotion
• Don’t chase green candles. I see that Solana (SOL) is being mentioned a lot here. It is obviously too late now to take a position in this token, given its incredible rally over the last few days. Same goes for LUNA. These projects have released some good news/upgrades hence their price action. Although these are solid projects, buying at such high prices is risky (as with any coin). Can still buy these if you have a long-term horizon and are fine with (potentially) having a negative ROI for quite a while (until somewhere in the next bull market maybe)
• Don’t ‘panic sell’ when you’re suddenly down 20%. If you really need the money, then you’ve invested more money than you can afford to lose which is obviously a big mistake. Despite the fact that this asset class has matured over the last few years, it is still very volatile
• DYOR: try to ignore YouTubers with their clickbait content. There are only a handful of solid YouTubers out there such as Bob Loukas, Benjamin Cowen and Coin Bureau

Feel free to ask any questions.