Today Gerbz & his bro use The Boom4 Financial Planner to free up some cash for for altcoins, save on taxes, average into altcoin positions and time the cycle.
What’s Up Crew!?
The price! That's what's up. This morning, my brother hit me up out of the blue. He wanted to have a little sync session. I knew what that meant. He wanted to talk crypto. That's what happens when price is up. My phone starts blowing up with friends, family, buddies from the BitLift Discord.
Everyone wants to talk strategy. Figure out what they're doing. They know the price is getting out ahead of them and they want to adjust. They need to adjust. They got to get ready. Everyone wants to be ready for the boom that's coming. We know it's coming. And today my brother, he wanted to make a little room in his portfolio for altcoins.
Right now he's 70% BTC, 30% ETH, and he's got no more cash. So how do you free up some cash? We talked about how to do that without taking such a big tax burden, taking a tax hit. Just making room for alts doesn't mean that you want to pay a bunch of taxes.
It's also December, so do we wait a little bit? It could make sense to do that. All of this is a common issue that some people are going through right now. So we talked about it, we broke it down. And the first step that I do whenever someone wants to talk strategy like this is I bust out the Boom4 financial planning template.
It's just a spreadsheet that I put together, you can download it from the show notes. But it helps you see the whole picture, helps you see your portfolio, see your goals, and crush it.
Your goals. And so we talked about his goals a little bit. We figured out how much of that BTC and ETH he can sell for the best tax benefit. We talked about which alts he wanted to buy. We talked about FRAX, RUNE, Avalanche, LINK, a few other ones. We talked about how to average into these altcoins, right? Should he let them come to him, or should he buy now and just let it ride?
We talked about how to place these limit orders at the right spots, based on what the charts are looking like right now. And speaking of the charts, we talked about where we are in the cycle a little bit. The cycle at large, it seems early, but is it the right time? We talked about that. And based on a few of these different scenarios and a few of these alts, we punch into the spreadsheet. If everything goes according to plan, how much money could he really make? Can he accomplish his goals? Will he be able to crush it in Boom4? That's what we're about to find out.
If you're watching on YouTube, be sure to Like and Subscribe. If you're not watching on YouTube, check it out there so you can watch us zoom around the charts and check out the spreadsheets. If you're listening, if you are on YouTube, be sure to check out the podcast so you don't miss another episode. Hit up the show notes to download that template. Let's get to it.
Gerbz's Bro Returns
Gerbz: Alright, so you hit me up, you want to do a sync sesh, we've done tons of these. You said last cycle you went into risk mitigation mode. Or at the end of last cycle, you dumped all your alts, you cleaned up the wallets, you've basically got BTC and ETH right now. You got a tiny bit of other stuff, some "dust." Plenty of dust. It's the remnants of the last cycle, just sitting there to remind you what not to do again, right? But like, alts are where the money's at. You saw. You saw last cycle, some of them were fricking ridiculous.
So, you want to carve off some percentage of your BTC and ETH for alts. You said 10%, probably because I do 10%. But let's come up with, like you said, let's come up with a reason for you. Let's pick a percentage that makes sense for you based on what your goals are.
Financial Planning Template for Boom4
Gerbz: I've created this Boom4 financial planning template. It's the one that I use constantly. I've got it available on the site, and did a whole pod about the planning template. It's work. It's the work that we all hate doing and most people haven't done. But let's go through it. I cracked off a generic one that resembles what your portfolio could look like.
And we'll go through it, we'll get some answers for you. We'll figure out what you want to do.
Constructing Your Portfolio Around Your Goals
Gerbz: So the whole thing starts with, do you have a goal for this cycle? And, what your "number" is. Maybe it's just a cash number. Maybe it's you want to buy a house. Maybe it's you want to set money aside for a college fund. Do you have a number or particular goals that you want to crush this cycle?
Bro: So, it needs to be dialed in, but there's a couple of big things. One is a fund for starting with a buddy to move into real estate, from a build and flip and/or hold perspective. We want to start off a portfolio of real estate.
Gerbz: Cool, alright. How much, off the top of your head, do you want to put into that? Just like a random number.
Bro: Top of my head? I think it's, on the low side, you can start off with $250,000.
Gerbz: $250k. Okay, and we'll call it "RE Fund."
Bro: Get us into our first project.
Gerbz: Let's do it. Alright, what else do you want to do? What's your dream?
Bro: I want to build a house.
Gerbz: Build a house. How much do you need?
Bro: Oof, depending on whether you do it with leverage or you flop a bunch of cash down...
Gerbz: Yeah, different games.
Bro: Let's talk about buying the property with cash.
Gerbz: Sure, let's say "buy a house."
Bro: Let's go buy a house.
Gerbz: How much would you need? And it can be even round. We can adjust your numbers for reality.
Bro: Yeah, let's keep it at a million bucks.
Gerbz: Million bucks. And then do you want to build it too? Or is that a, is that good for this?
Bro: Yeah, that's good for that.
Gerbz: Okay. What else you want? What’s your dream?
Bro: Well, I need cash to move in next winter.
Gerbz: You can't end the cycle without any cash leftover.
Bro: You You have to.
Gerbz: You want ammo for, what is it, like 2-4 years? Because that's when the next cycle... your next chance will be four years from then. So how much cash you want for four years sitting in your bank?
Bro: So, it'll at least be sitting in USDC at 5% or something. But let's go... let's go a mil and a half.
Gerbz: $1.5M, cash. All right, this is a great starting point. It's a great plan. And I think a lot of people might have similar ideas, maybe. Maybe you live a lavish life. You need $1.5M cash just to live. That's pretty rich, I like it. Live the rich life.
Bro: That's the move back into crypto. That's not living!
Gerbz: This is...oh, this is cash just for chilling! This is what you're gonna spend.
Bro: That's apeing in for winter, yeah.
Gerbz: It could be, but who knows? You might want some cash. All right, so you need $2.75M based on our very round numbers here. And, based on more round numbers that I just crafted, I put down like a portfolio of 50 BTC and 250 ETH - just some good round numbers that a portfolio could look like.
What's interesting is that your dream IS your portfolio. You could sell 100% of this portfolio right now and you could actually live your dream. Just live your whole dream - you’d have zero crypto!
Bro: You're forgetting about the taxman!
Gerbz: Forgetting about the taxman, very good point. I'm going to come to that. But yeah, it's just interesting that this random number I chose, also, was your dream. Go figure. It's cause you're my brother. I know you...
So, based on that, I knew you had some Curve and some Luna. I didn't know how much, but I knew your BTC and ETH was like, 99% of it...so that's why I plugged those in. This is what a portfolio today could look like, it's 80/20 basically BTC/ETH.
Bro: Yup.
Gerbz: And so you want to carve some off for some alts. And to think about that, the first thing that comes to mind for me is, "What can you sell for the least tax hit?" Right? Because you don't have any cash, you have crypto. If you want to create cash, you need to sell crypto. Which means: which crypto have you bought at the highest price so that it would give you the least tax hit when you sell it? That's my first question. You might have to dig through your data in order to find that out though.
Bro: Yeah, I mean, high level, right? The good and bad is I did a massive tax loss harvest at the end of '21.
Gerbz: Good. Yeah.
Bro: '21...? I can't even get myself say the word Luna, but when was that? That was May of '21?
Gerbz: Nope. That was May of '22. So that's probably when you did it.
Bro: Jesus, that wasn't that long ago. That's what blows
Gerbz: just
Bro: that we're even in this now.
Gerbz: All right. But it's, been over a year, which is good. it means you've held for a year.
Bro: Yeah, so I, I, I took all the losses possible at that point in time. So, anything that's been purchased since then in winter has been at a great price. So there's not a ton there. Really it comes down to probably, 50 ETH, is really the best thing I got going for me right now for buying, as of a decently high price. Call it more than $500.
Gerbz: Yep. Okay, cool. So here's what I just did. I just punched in that after a little rebalance, you'd have 200 ETH instead of 250, which freed up, $111K. It's insane that 50 ETH is $111,000. That's a big deal.
Bro: For sure. So I'm looking that, and then also likely 1 BTC just because of the amount I have and keeping. I want to keep a certain amount for, indefinitely.
Gerbz: Cool. So that frees up $150K for you right off the bat, just doing that. Obviously you could sell more if you wanted to get more into alts, and we can talk about that. But that first step of what can you sell for the least tax hit is a very important question to start with. Cool.
And then, so the next thing I like to think about is you're thinking about getting into alts or, and I'm sure you've got some ideas. We've talked ideas plenty of times.
But what we want to do is. We want to figure out which alts can give you the best multiple, and what are the goals, and how much are you willing to sell?
Now, here's the question, right? Let's say we're top of the market. Things are booming. That wild energy is there. How much of your BTC and ETH are you actually willing to sell? Do you want to go down to zero? Do you want to have a $0 portfolio, or a crypto portfolio? if this thing 10x's, that means you got $20 million in this portfolio, right? And 10x-ing is possible. We all know that 10x is a real thing in crypto. But the question is if you're sitting there...
Bro: 10x bitty would be aggressive, but nothing's off the table.
Gerbz: Very good point, we'll get to that. We'll get to bitty price for you, for sure. but yeah, what %age of your portfolio are you willing to sell? At the end of the day, how many, in this, hypothetical portfolio...let's say you had, you started with 50 BTC and 250 ETH. What would you be willing to sell from that at the end?
Bro: I think, to be safe as of right now, I would say 50%. And it's not of everything. And it's not because I want to, but I think that this is the run for me to do this appropriately and come away with a lot of assets, and not ride this thing down.
And I do believe that winter will look a little different after this because of the different type of money that's supposed to be moving in, in this market. And I don't think we're going to get as much cyclicality as we have historically. Not that it can't happen, but that's where my gut goes and that's what I think is going to happen.
So I'd like to stay in and still free up the capital to go move in. But I'm going a little bit into more of a preservation verse. Just hardcore, YOLO. Toss it into a bunch of crazy shit.
Gerbz: I like it. Yeah, you're not going to, you're not going to sell all your BTC or all your ETH. It makes sense that, let's sell half of it this cycle. And let's take some of that fat cash you stacked up and you can even try to buy the bottom a couple of years later.
Bro: That's right. It's against religion to sell my BTC.
Gerbz: I like it. I agree. It is mine too. So what I've got here as far as this what's possible in Boom4 section of the spreadsheet is where you guesstimate where you think prices could get to. I've got BTC could hit a $100K, right? I've got ETH could hit $8,000. To me, they're very round numbers. I figured them out based on charting some stuff up and past cycle stuff. You know me, I'm crunching these dumb numbers all the time.
But these are some round big numbers that I think are really, truly possible this cycle. And so, if this portfolio here, if that number hits... if you were willing to sell a 100% of your crypto, it would reach $6.5 million total, right? Since you're willing to sell half of your BTC though, and half of your ETH, it would be $3.25M.
Bro: That is without moving into any alts right now. That's all still bitty and Ethereum.
Gerbz: Exactly. Which, that's a very good point, something to remember. You don't need alts, right? BTC and ETH are gonna move, and they're gonna make big moves.
If you don't want to get too sucked into the cycle and go down that rabbit hole, you don't necessarily have to. That's up to you.
Bro: Are you going to be good about...are you going to feel good about yourself watching alts run with fucking nothing in the game?
Gerbz: No, not me!
Bro: Is that possible?
Gerbz: Hell, no. Because I watch, I do watch.
Bro: Of course.
Gerbz: That's the thing, right? How much attention do you plan on giving this cycle? If it's not a lot, yeah, then maybe you should ease up on the alts, man. But if you're down to keep tabs, and chase, chase some winners. There's huge upside.
Yeah. So, you said you're willing to sell half of your BTC, half your ETH. Before we even get into alts, here's the numbers that it crunches for you. It shows that technically you could accomplish your goal by selling half your BTC and half your ETH at these numbers, and then paying your tax.
You could accomplish your goal, and it's actually pretty damn close. If selling half of your crypto would be $3.1M after taxes, you could do it. That's it. Boom. We didn't even have to touch alts if we didn't want to. Obviously everyone wants that, you want to make more than anything, but you can accomplish your specific goal just doing that.
So I think that's a pretty big deal and something to consider.
Bro: For sure. I think the main part of all this is, when it becomes reality, it's doing what your plan says, right? And that's the hardest part, man. These plans can be absolutely perfect, and you've got to be just maniacal about sticking to your plan. I had a plan last run, and looking back on it, if I stuck to that damn plan I would have been 10X off better than I was, right? So something to note. This is the hard work, but the harder work is executing on your plan, right?
Gerbz: It really is. And, I mean obviously nothing guarantees that BTC will hit $100k or that ETH will hit $8k. So even when you have a plan, it doesn't mean it's your fault if you don't follow it. It means things didn't go according to plan, and that's okay, too. That can happen. But you need a plan if you want to follow at all.
Bro: Which brings you to DCAing and in and out, right? To at least get as high of a percentage of executing on your plan as possible.
Gerbz: I agree. I think you definitely would want to do some chunks. I always like to break the chunks into three. One way to DCA is you take a percentage of your paycheck every month and you just buy BTC and ETH, or whatever you plan on. That's one way.
Maybe also though, you already have cash. A lot of people I know are sitting on the sidelines with cash. We just saw on the Discord today and yesterday, everyone's "Oh, this run is epic, but I'm still hoping and waiting for a dip." Right? Because everyone's got some cash and they want to buy, but it seemed...no one wants to buy when there's a big green candle. You want to buy when there's a red candle and it feels cheap.
So everyone's still waiting. Maybe you've got some cash. Do you have cash that you wanted to pile into this also? Or are you just going to...
Bro: Yeah, there's additional cash in addition to, moving from bitty and ETH.
Gerbz: Okay, I'm going to put $50k down then as that's how much cash you could theoretically also put in from your portfolio here.
Bro: Absolutely.
Allocating for Alts
Gerbz: And so as a portfolio today, I'm going to put down that you have you're going to put in $50k. And then after rebalancing, you'll have zero, right? Which means you've allocated it to some altcoins.
Okay, so we know what it takes. We know how you could actually accomplish your goal here without buying any alts, but let's talk alts. Why not? What do you want to do with alts, man? It looks like you got...so you got $200k here. If you sold 50 ETH and 1 BTC, you'd have $200k to put into alts, which is a nice chunk of change.
I know we've talked a couple alts. You want to talk about them and maybe figure out some price ideas, figure out some goal ideas?
Bro: Yeah. Yeah, that'd be awesome. I always keep in mind that there's a few projects that are going to pop up within the run that are going to be worth taking some risk on. So, I know that not all of it's going to be perfect right now, but at least getting the allocation right...I think is good.
A few projects that I've had my eye on for a good period of time are the FRAX ecosystem, right? I think that they're doing a really good job on nailing a lot of, I mean, building an ecosystem. I love the ecosystem plays, right? Cause it nails on a lot of value from different components, and whether it's real world assets and/or DeFi and/or stablecoins...and I think that FRAX hits the dead center on both of those. And it's been a successful project for quite some times, through highs and lows, right?
FRAX
Gerbz: FRAX - let's start with that. Let's pull it up. Here's what my FRAX chart looks like right now. So you've got no FXS at the moment. FXS is the FRAX shares, FRAX is the stablecoin. So we're talking FRAX shares here. And the chart, it starts in January, 2021, right around the beginning of 2021.
It's topped out at $44, and that's also the number I had set as the goal for this cycle. If it just reaches what it reached last cycle, then that's the goal that I had set. And right now it's at $8. It's basically moved between $4 and $8 for the last ...almost a year and a half.
So if you were some magical day trader, you could have caught this perfect bottom at $4, right? but none of us are that. We're sitting here at $8, and it's an opportunity to decide whether it's a good time to buy or not. Is that what you're thinking?
Bro: And it looks like it's, yeah, and it's, and really I'm waiting, I'm trying to figure out the proper limit orders to top in to jump in. So I'm just sitting there, ready. And I know we've been at this long enough to know that we're going to have 20-30% dips here. It's just a matter of, are they going to be 50%, 60 % from where we're at now when that happens? Or is this going to happen within 5 to 10% of where we are right now? Which makes sense to set limit orders and just and hang and have some patience.
And given how early we are in the cycle, I tend to think the latter is the answer. But once again, we don't know.
Gerbz: We don't know. That's everything. We, all the planning that we do, we preface on the fact that we don't know,
Bro: We know everything, but we know nothing.
Gerbz: We know what to do. We just don't know what will happen. So let's talk what to do. So you can see in this chart, obviously we have this big downtrend. I just connected the top here from, this was March 2022, to whatever the hell happened here in February. I don't remember, but there was some sort of little boom that just fizzled out immediately. But it created a nice, simple downtrend that the candles seem to be respecting, and we saw it broke out here. Let's actually, let's go to the daily view and zoom in on what happened right there.
So here's that downturn we were just talking about. And so, yeah, I'm going to zoom way in on this because this is just an example of...this is an example of a great breakout, right? Right here. Not only did it break out - here's this big candle here where it broke out.
It's using the Uniswap pool, so the volume is irrelevant. It's kind of a mess. Who knows where people are actually buying their FRAX shares, it could be anywhere. But we had this great breakout and then a retest of it, right? That's what this is here. It broke out and then it retested it. And then it went, and this is this is when I buy that, or in a perfect world scenario, right?
It broke out. A breakout is always great, but you don't know if it's going to survive the breakout. And so this one did it, and it retested. And then boom, off to the races. So that would have been an epic spot to buy, and then here we are now with the next potential opportunity to buy.
So I've got this horizontal line here that just connects a couple of these little runs that it's had along the way, and it seems to be respecting this area. And that's exactly the area that we're at right now. And we have another breakout in the works.
And so the question is, is this a full on breakout? Are we going to retest it? Is it going to just dump from here? There's no way to know. So if I was going to buy, if I was going to buy some FXS here, I would break it into three chunks. You've got $200K to play with, for example. Let's say you wanted to buy two alts. So you've got a $100K. I'd probably put, I'd buy $30K, right fricking smack now.
I would just do it, get it over with. I'd probably stake it in Convex too. We can talk about that, because it's just a very easily stackable asset. And, I'd buy that first one now, and then I'd put it in two more orders. I'd put it in an order somewhere around here in case this breakout doesn't survive.
Bro: Breaks down...
Gerbz: Yep. And then I'd put another one in somewhere around the 200 or 50 day moving average, somewhere around here. So what is that? Maybe another order at $7 and another at $6. That's what I do.
And then the important part, I'd sit around and wait. And set an alert in CoinMarketCap to send you a notification when those prices hit, because it means your limit order is probably triggered. Just so you know that your portfolio is moving. Then the important part after that is you can also set an alert for $10, right? Because if $10 happens, that means we're not dumping, we are breaking out. And what that unfortunately means is these limit orders are probably never going to trigger and you need to move them up.
And if I moved them up, I'd probably move them up here to back to $8 and $9, right? Or maybe we could look at some areas around here. See if there's any horizontal areas that are respected here. It seems like there could be, right?
These kinds of peaks hit through this line and then it, sort of like last cycle, it seemed to respect this horizontal axis. This is that $15 bucks here, buying anywhere below there is a good game. Above here is the next channel, so to speak. And, that means we're breaking out again.
So, I'd try to accumulate here, in this channel. And if that doesn't work, I'd move my limits up and try to accumulate in this channel. And, if you haven't done anything by then - shit man, you missed it.
Bro: Move on. Throw it all Doge at that point, dude.
Gerbz: That just means you're not doing anything.
Bro: Shit.
Gerbz: Or, it just means you're chasing hard.
Bro: Yeah, that chase never feels good, man. You know it, you feel it, and you just you want to run the other way at that point.
Gerbz: And maybe what happens is, so, we bought immediately on, as, our first chunk here. And then we set two limit orders down here. If neither of those hit and it, and you decide you have to move them up, maybe that also means you immediately buy your second chunk and you've only got one chunk left to try to catch up here. And I mean, what you're doing is you're just trying everything you can to get a good price. And I mean, it doesn't necessarily mean it's going to work, but you got to try. You can't just smash buy 100% of your position on a random Monday morning because everything's up. I mean, you got to...
Bro: Yeah, and it's hard. It's very hard to always keep cash available as well. Times like these when you want to move in, I mean, there's going to be five, six, seven opportunities in the next year and a half likely to move in on a 20, 30% dip, right? We know that's likely. And if you've got nothing then as well, makes things a little tougher. So something to keep in the back of your mind too.
Are We Still Early?
Bro: What are your thoughts on this being a fairly early breakout in the realm of the traditional cycle? Where's your head at? Do you think that this is, potentially just looks and feels different? Is it because of the ETF momentum? What are your thoughts here as early as we are?
Gerbz: I think we're super, super early. I really do. I don't think we're gonna have...I think it's a year from now is when BTC could hit $70k, which is a new high. $69k is the current top, and I still think it's going to be all of 2024 before we get to $70k. I really do.
And that's only based on the last, what the last cycles have done, right? I can't predict the future. All I can do is use the past to try, and that's what's happened. So I'm going to stick to that until the price proves otherwise.
And then I also think 2025, that's the year of mania. That's going to be, NFTs will be in full swing. Some other new shit that we've never even fathomed will be the hottest thing in crypto.
All of that's going to happen, I think 2025. We're so far from it still. So it is, it's hard. Maybe even making these position moves now is too early. Being patient is going to be the hardest part of this whole next couple of years. The only thing that would change my mind about any of this is - if, we break $70K Q1.
Bro: Yeah.
Gerbz: Maybe that does mean we're gonna have a flash cycle where everything just gets hyper, goes into hyper speed. And then the actual all time high is going to be Q4, 2024.
So obviously we've, everyone's talking ETF stuff, right? I mean, that is going to impact BTC and ETH more than anything. Are alts going to try to follow it? Alts in my mind, alts follow narratives. And they follow new tools and new technologies. And that stuff is, you can't speed that stuff up. That's going to happen when it happens.
Bro: And not Bitty and Ethereum in main financial markets are going to be talking about or going after. It is going to be BTC and Ethereum as the new tech that's moving into Wall Street, right? That's going to be the new shit. There's connections to those through alts, and there's going to be, risky funds that are certainly dabbling in it and doing DeFi.
And, you know, a couple hundred million bucks is enough to move some of these markets in this small stuff. So it will get wild, but it won't be the central focus for the average person would be my thought.
Altszns
Gerbz: Yeah. I mean, I tend to agree. So, we do have these mini alt seasons, altszn right? In between the primary halvings in the main cycle. I want to pull up, let's see...
Summer of 2020 was DeFi summer, and that actually correlates with COVID. So that was a bit of a strange time. But I'm just thinking out loud, DeFi summer is like one of these alt seasons that happened just out of nowhere. And it was very early cycle.
Here it is right here. If you zoom in on it, this was DeFi summer right here. And it was a boom, right? Ethereum went from $230 to...let's call it $430. So it went up a hundred bucks, almost 50%, during that time. And it sort of kicked off the cycle, but then we were sideways for eight months.
So, these little mini alt seasons can happen. It just, again, it's too early. We didn't have the top for a year+...
Bro: And that mini alt season happened right after the the breakout too. Right?
Gerbz: The breakout of...?
Bro: Where does DeFi summer kick off?
Gerbz: I'll show you. I'll show you. Actually, let me create this line here too. Cause I think it's a good one.
Yeah, that's nice. So here's DeFi summer on my screen here. This is July and August of 2020, it happened. This is COVID right here, and then followed by DeFi summer, which was literally the beginning of the big two year move of the bull market.
But when you zoom in on it, this is July. This is November, right? So that's a full, that's a six month gap before it actually even really started to become the cycle. So it's, this is where we are right now. This is where it is, that we're so early. I wish I could see...let's see if you can see DeFi somewhere on the BTC chart.
Bro: At the same time though, look, I mean, it never came back. There was, there would be no regrets in buying through that. It stayed higher than it just went sideways. So possibly good time for some yield on whatever alts you move into.
Gerbz: Yeah, I mean, it's never, buying early is never a bad thing as long as you've got the patience for it.
So here it is, but here's BTC. This is DeFi summer 2020, but in BTC, which you wouldn't have thought DeFi summer would impact BTC. But here it is, right? Started in July, and then, again, we didn't break out of that right here until October of 2020.
Bro: Yeah.
Gerbz: Another six months. And then to this is obviously the biggest run of the season. This happened fast, man. This was October to let's call it March. It's another six months though. So, it's like six month chunks.
So as far as where we are in the cycle now, we're buying here. We're buying this, which I mean, fuck, that's a great spot.
Bro: It is.
Gerbz: It's the spot.
Bro: And think about it. That's right after a huge run there where you're sitting there going, shit, I missed it. Could have gone at the bottom, but still you're still at the bottom 20% of timing to buy, right? It's still a great time.
Gerbz: Yep. Also though, let's also take the having into account. We can't forget that, right? So we're pre-having. So if you look over here, the fourth having is still months and months out, five months out from the having. In relation to this, we're pre COVID.
Bro: Yeah.
Gerbz: We're over here...
Bro: And look at that huge sell off right there after it ran up.
Gerbz: This one?
Bro: Yeah.
Gerbz: Well, that's COVID.
Bro: COVID...
Gerbz: If COVID hits again, it'll look exactly the same, but let's pretend...
Bro: It'll be called something different.
Gerbz: Yeah! Nah, let's pretend like COVID's in our past and, it's blue skies and everyone's outside. Inside?
Let's pretend like that didn't happen. So that means to me, it means it would have just been a little sideways for right here for a couple of months. Because look how fast it recovered. Insane.
Bro: Just like that. COVID's gone.
Gerbz: COVID's over. And, So I think we're early, but I think it's a great time to be positioning our portfolio. That's why I wanted to even record this with you. Everyone's asking the same thing, they want to get in, but they want to try to catch another dip.
Like, who cares? We're here. We're here. Start making moves, yeah. And do it in chunks and maybe you will catch a dip, but that's just how it works.
Bro: For sure. Cool. I like it, that's good. It's good to compare to those.
Let's jump on...I'm interested to look at some, some LINK charts. I think FRAX we nailed, breaking out a little bit right now. 30 % now, set a 30% at $7, 30% at $6 and see if it dips back down or what it does.
And if it doesn't do that, there's a clean break through $10. Then, decide if you want to chase and start readjusting...
Gerbz: Yeah. Then move up those limits. Here's that FRAX chart again.
Bro: Just never feels good buying in, what are those weekly candles?
Gerbz: This here is weekly. Yep.
Bro: Just, six weeks of just...green.
Gerbz: Yeah. I mean, you missed this breakout, right? So that's why smash buy now, because when it keeps fricking going, at least you say you did something.
Bro: Yep.
Gerbz: And then, put those orders in here. All around here. Break it into 10 chunks if you want to, do it every 10 cents It doesn't really matter how you do it.
You can fan them out is one of the ways of doing it. But yeah, I like putting it here at the moving average. This is the 50 week moving average. The 200 week moving average is a popular average to follow, but there isn't enough data on this FRAX chart to create a 200 week moving average.
Bro: Got it.
Gerbz: So, and it seems like it actually did tinker around with the 50 week moving average here. It seems to respect it a bit. So why not? But yeah, that's FRAX. let's look at LINK.
ChainLink (LINK)
Gerbz: Here's LINK, and look where we are. At the top of a channel.
Bro: Does it reject or does it blow through?
Gerbz: We're not going to know. There's no way to know. We're just sitting around waiting. And yesterday and today...
Bro: Look at that break through the downside though. Look at that. Just fucking crushed through it.
Gerbz: which one was that?
Bro: Down below.
Gerbz: Here. This one.
Bro: Yes. It's just fucking plowed through it.
Gerbz: Yep. It is pretty normal. And I wouldn't go to, you don't go to hourly and check that all.. That's unnecessary for what we're doing.
Bro: So it rejected it once up there.
Gerbz: This new spot that we're at right now?
Bro: Yeah, yeah.
Gerbz: Yeah. We're retesting right here.
Bro: It's retesting as we speak.
Gerbz: Yep. As of now, it's a failed retest. It's just like this.
Bro: So possibly even...
Gerbz: Actually, it's like this. Right? First two days where it hit. It came down. This retest though was strong, right? It Broke pretty high through it on good, strong volume.
Bro: Yeah, this last one was just a little peekaboo action. Barely got through there.
Gerbz: This is very common. This is how it's going to work. It's going to do that again, right here. Right now, we're down today. Everything's up today. BTC's crushing, ETH is crushing, gold is breaking to all time highs.
LINK isn't having a great day because it's already been doing all this action. It's busy doing its retest thing. It doesn't really care what the market's up to right now. It's retesting.
Bro: Even like a $1350, it looks like the bottom side of these new tests.
Gerbz: This here? Yeah, could be. So I've got orders in at $10.10, $11.11, and $12.12. They've been there for months because I wanted to buy, I think it was after this crazy run, because I missed this for one of my traunches. But then I could tell that it wasn't going to blast past here. Not yet, anyway. It needed to retest it.
So, I started putting in orders. I just fanned them out through here. I hope one of them triggers. This is pretty damn low now, though. This feels...
Bro: Yeah.
Gerbz: It feels unlikely. If we just break out of here on strong volume, I'm going to cancel my $10.10 and smash by wherever I can right here And I'll just leave my $12.12. But, I'll probably end up moving that up too cause it's probably not going to break back into this channel anytime soon.
Bro: And how do you figure out at what point you're chasing? Or is it a project that you just are so bullish on for this next run that you just, you're okay buying at $17?
Gerbz: I'm okay buying here, anywhere here. I think LINK has...so last cycle I think it hit $50. That gives us...actually, it hit ~$52. That's a 3.4x multiple from here. So worst case scenario is 340% gain. I think LINK is going to make a run for a hundred this cycle. I think it definitely could.
It's got a lot more foundation here and the good: it's on the right side of the narrative, so I like it. So, I just decide I like it and then I try to get the best price I can all cycle long.
So yeah, so, maybe some alts you could throw this way. There is a way to stake LINK. They have a new staking thing. I don't think it's the right yet, I haven't staked it yet. Mine's just collecting dust, but I'd like to see a way to generate some income on these things while they're sitting in my portfolio - especially if it's going to be sitting there for two years. Let's do it.
Thoughts on Staking
Bro: Yeah, and just, We've talked about it obviously before, but when it starts getting to be actual season and things are going bonkers, it's time to start considering the risk of having that stuff tied up versus having it liquid and accessible if you're planning on selling at any point within three to six months from that period, right?
Gerbz: Yes, definitely. Especially after what we learned with LUNA and others. I think another, we haven't talked staking your ETH yet. I know I've tried to get you to stake it for months now. But even that, I'm going to be unstaking a good portion of my ETH as the cycle progresses. I don't need to make 4% on my ETH during a bull market.
Bro: Yeah. Mice nuts.
Gerbz: That'd be crazy.
Avalanche (AVAX)
Bro: The only other, and I don't want to spread too thin, I don't like just spreading out a little bit of money all over the place. I like keeping pretty focused. So those are, my leaders with FRAX and LINK. Avalanche seems to be...
Gerbz: Yep.
Bro: Making some pretty good moves and seems pretty strong. What are your thoughts? And, and what am I missing? What are you thinking about these days that's not on anyone's radar?
Gerbz: It's the same play as LINK, actually. Avalanche just has a good, strong narrative with real world assets going.
I'm trying to find this blog post that Avalanche had not that long ago, right along the time that LINK was talking about it too, is that they want to see all these real world asset projects deploy as subnets on Avalanche. I see a future where the NASDAQ deploys their blockchain based trading system as a subnet on Avalanche.
They're going to have to do that. They're not going to spin up their own blockchain, the NASDAQ...
Bro: And catch up, yeah.
Gerbz: It's gotta be a public chain or why bother? And a subnet allows them to have a lot of control over it while still having the decentralization component that having a public chain gives them.
Bro: Boom. There it is.
Gerbz: Boom. All right. So this, here's a good, another great example of...let's, pull up. We'll start with weekly. Always start zoomed out, right? Epic fricking run.
Bro: Yeah.
Gerbz: Super epic run all built on this, I think, real world asset narrative. LINK had the same run, broke out of this downtrend, met up with this one, decided it couldn't handle it, it wasn't ready to break out above this hard yet, right? And so retest, bouncing, is it bouncing off? This is the question from the weekly, right? Is it ready to spring load off of this trend here, or is it too soon?
Let's look at the daily. So it broke through, retested, broke through, and then here's a retest that failed, actually. This retest failed, and then it sort of started to...
Bro: Break down a little bit there.
Gerbz: It tried again. And that's how it goes. Broke through, now we're retesting again. This is bullish as hell. I think this is super bullish. Like, let's go! We're testing. We tested this line in multiple fashions now. The only thing left to do is bounce, off of it.
I'm not afraid of this at all. But again, I would do the same shit, right? Let's say I was gonna, I had a $100K, I'd break it into three chunks. I'd smash buy some right now, and then I'd put some orders in, which would be at $22, would be right now.
Bro: Yeah. You could put some in at $16, $20.
Gerbz: All the way down here if you want. If this just doesn't end up happening, then you just move them back up, smash buy again, and try to capture this area here.
Bro: Yeah. Interesting time. I mean, look, those breakouts just came out of fucking nowhere.
Gerbz: Yeah.
Bro: I mean, they really just, if you would have looked at that chart and gone back to, what is it, October. I mean, there was, nothing in the fucking world that could point to a breakout like that. It was downside all the way. Just bearish.
Gerbz: This is sideways down. This is, this is people forgetting about crypto, that's what this is.
Bro: Yeah, yeah.
Gerbz: And then this is like real world summer. This summer? It's in Q4, but that's, I mean, this is just a narrative that out of nowhere people were really feeling. This is actually ETF narrative stuff.
This is Larry Fink out there talking about how BlackRock sees all these real world assets coming on chain. That's what this is. It's as simple as that. And so, does that mean it's overblown?
Bro: No, it's just, yeah, I said, is it overblown? Was that, the RWA run, right?
Gerbz: Yeah, is it over? Is this just like one of those? Right?
Bro: But no, I think that people are so...the folks that aren't into crypto and financial markets are so trained to listen to these folks on capital flow and direction of investment. And when they say something, that's moving 90-95% of humans' money out there.
That's what they're listening to and that's what they're hearing, right? So, they hold a lot of weight even though they're not necessarily the ones out doing it. So it's just interesting.
I mean, but then again, I don't think most of those people listening are the ones going out and buying Avalanche and LINK, right? But it could be on their Coinbase dashboard and maybe they are, I don't know.
Gerbz: It is on their Coinbase dashboard. And it was, it was the trending token of that day for a while probably.
So, the market cap of Avalanche right now is $15.8 billion. Which means that this run that we had right here that went from, let's call it 8 to 20. That was like a $10B move right here. So, that's pretty serious, but also, in the grand scheme of things, is it that serious?
Right? Ten billion dollars? I mean, out of Ethereum, that's, 3%? It's a big move.
L2s on Ethereum
Bro: I haven't been, hearing a lot of a lot of noise about L2s or...
Gerbz: Yeah.
Bro: Scaling projects on Ethereum. I mean, they're not going anywhere and they're doing a bunch of cool shit, but I'm just not hearing it, not seeing it yet.
Gerbz: Yeah. That's because, here's Optimism, right? This is what the base chain, Coinbase's L2. And this is what Worldcoin launched on as well, is Optimism. And there's a bunch of other ones and more coming.
Optimism doesn't have any revenue driver. There's no...the tokenomics, or not the tokenomics, but the business model just isn't there.
Bro: Yeah.
Gerbz: So. Until there's some value captured by the OP token, I don't see why people are going to buy it. It's sort of like a Uniswap token, it's just a governance token and it doesn't capture any value. So why bother? Now, it is, however, testing this top channel pretty strong, right? This is just a simple chart.
Bro: It's gonna do something here in the next few months.
Gerbz: Yeah, it wants to either - it's currently decided that it doesn't have the momentum to break this, right? This big wick here shows that it bounced off it really hard. This one means it bounced off it really hard. A wick is this line above the candle.
Bro: Yep.
Gerbz: It means it tried and just was like, I don't think so, man. We ain't there yet. However, Optimism at $1.75 could easily be $3. It's a double. It's a nice double if it does...but, during the mania, it's gonna more than break out of its all time high. This could be, it could be a ten bagger for sure. For no reason. It's just, I'd sell 100 % of it.
Bro: A ten bagger making no money.
Gerbz: Yeah, with just the only the demand driver for it is Worldcoin and Coinbase have to buy OP in order to vote on the direction of the base chain.
Bro: So you're relying on two, basically, businesses to to buy it. One of which is a behemoth, but still, right?
Gerbz: Yeah. I mean, it's every business that builds on OP is going to want to have some say in the direction. So those are the two biggest that I know of now.
Consult the Portfolio Before Making Decisions
Gerbz: Back to the portfolio just for a sec, because this thing is, this is the most important part that people miss - is that you're going to make your decisions based on your portfolio and your plan for your portfolio.
Based on just a little, the scenarios we discussed of selling 50 ETH and maybe 1 BTC out of this fake portfolio... $200K. Sum of $200K divided by... your portfolio today.
So remember at the beginning you're like, I might want to free up 10% of my portfolio for alts? Selling what you sold freed up 7.5%, right? So that's not bad. That's and that's close to what you were talking, and it's good to just keep that in mind. How much were you off the top of your head willing to sell?
We also discussed maybe If we did throw some LINK and some FXS, let's say, into your portfolio. Let's say we just bought a $100K of each, right? as of right now, after taxes, you have 3.1, selling off half your BTC and half your ETH. Let's throw some LINK and FXS in here after the rebalance, let's say $7,500. That's $117k.
Let's call it 7,000. So you bought 7,000 LINK, and let's say you bought 15,000 FXS.
Bro: Yeah, that's about right.
Gerbz: It's a bit much. So this number here, once this turns black, that means you've put too much money in here. So let's this $6,000.
Alright, this is pretty close here. Cool. So this is how much LINK and FXS you could buy. And then based on previous cycle tops, if FXS got to $44 - which was the top of last cycle - and if LINK got to $5,288, which was the top of last cycle...and if you dump a 100% of both of them, that means it would pick up basically another $800k.
Bro: Boom. I'm going all in. I'm selling everything.
Gerbz: Which is real money, for sure. And, but we were at 3.1 versus 3.82. This 10% of your portfolio that you're going to allocate to alts and deal with, this is the difference that we're talking here, right?
Bro: It's huge. And there's also a bigger risk, right? There's a better chance that something goes shitty with LINK or FRAX than there does with ETH and BTC, right?
Gerbz: Yeah, it does. It also means too, that you could sell less of your BTC, let's say. And what you can do is you can now tinker with these numbers. So your goal is 2.75 after tax, right? So you want this number here to be 2.75 after tax. So now you can start adjusting. Oh, I want to only sell 40% of each. Oh, maybe I can only sell 30% of my BTC. Look at that, 25%? Boom! We're almost there. It needs to be 30%, right?
Bro: Yep.
Gerbz: So you can go 25 and 30... no. And 40?
Bro: Well, also remembering that. The numbers we're putting in here for alts - being that they match last year's is, for good projects, is really fucking conservative.
Gerbz: Yeah, I know. Yeah, FRAX is gonna destroy its last all time high. I mean, right now the multiple I've got here is 5. It's I think it's a 10x, it could it could make a run for a hundred bucks, right? So could LINK, which is twice these.
Bro: Yep.
Gerbz: And we could adjust that, right? Let's say LINK gets to a hundred bucks and FRAX gets to a hundred bucks. This is the target price. We're going to sell 100% of them. Now look at our numbers. Now, how much do we need to sell? Look at that. You only need to sell 10% of your BTC and 30% of your ETH. Yeah...
Bro: It's a good place to be.
Gerbz: Now we're talking. So this is like when you're trying to make those decisions. Like, oh, should I do this? How much, I don't know. The only way to make those decisions is to bang them out in a spreadsheet, just play with it, see what feels right, what makes sense to you, adjust the numbers, and then make moves. And now at least you're making them based on hard numbers.
Outro
Bro: For sure. I love it, man. Super helpful. Helps put some clarity around decisions cause it can get overwhelming and all you can do is put a plan together and execute, and feel good about it. So I love it, man. Very helpful. And, this is certainly something people should go do for themselves and build out and, jump in the, jump in the Discord and ask questions. This is awesome, man.
Gerbz: Exactly, that's right. There's a page on the BitLift website called Crypto Financial Planner. Go find that, you can download the spreadsheet, it's free, everyone should use it, and then, play around with it and see what you come up with. until then I'll, shoot this over to you too, so now you've got a starter kit to go with and keep it going.
Bro: Cool. Bye bro. Peace.