Bitcoin is on track to replace gold as money's new base layer. News of rappers, billionaires, hedge funds, local governments, State Senators and nations waking up to this new reality is attracting millions of new retail (aka smaller/independent) "investors" to crypto. And a mass exodus from Wall St. led by the WallStreetBets fiasco is pouring fuel on the fire.
As millions of new crypto investors begin their journey down the crypto rabbit hole they discover a few things:
- Bitcoin is super "expensive" (~$47k each)
- There are 1,000's of other "altcoins" that cost less
The biggest mistake new investors make is comparing prices of assets vs comparing market caps. Each project has a very different supply making the prices incomparable. But you can't brag to your buddies about owning 0.021 BTC! Having 13,000 DOGE is so much cooler!
"Other people want to make friends, I just want to try to make you money." - @JimCramer
Here's the the problem. We're all watching altcoins 5-10X right now and I'd be a hypocrite and doing y'all a disservice if I told you to avoid this opportunity. There's a time and place for alts, and the time is now while millions of new retail investors are ballooning up altcoin valuations to astronomical heights - THIS IS ALT SEASON!
alt·coin - noun - everything that's not bitcoin Similar: alt, alts, shitcoins
- It will all come crashing down. Most alts you hodl beyond the date Ethereum peaks will probably end up worthless.
- Trading altcoins is gambling, and you're probably not a professional trader or professional gambler.
- Capturing short term capital gains is one of the highest taxed (~40% Fed + ~5-10% State) investments you can make.
- Converting Bitcoin into altcoins (or any non-stable coin crypto to crypto conversion for that matter) is a taxable event.
My approach is simple:
- Allocate a small percentage (~10%?) of my overall portfolio to altcoins I think could 10X+
- Break that allocation down into 5-10 individual bets
- Dollar cost average into each bet in 3-5 chunks with the first chunk being NOW and the next chunks at dips or new all time highs (whichever comes first)
- Once it pops, set some stops! AKA, once the trade is in the money, set stop limit orders ABOVE your purchase price to ensure you don't lose money
- Dump the losers quick and let the winners run
- Move up stop limit orders as it climbs to lock in gains
- Don't look back. The coulda-shoulda-woulda's will eat you alive.
All of this is done with the goal of stacking more bitcoin. In fact, I like to buy alts with fiat/stable coins and sell for bitcoins. These bitcoins earned I'll sell 4 years from now (for tax reasons) and the bitcoins I earned 4 years ago I'll sell at this market top.
There are thousands more (6,000+!) but here are the alts I've been watching and trading broken down by sector in no particular order:
- Borrowing/Lending - AAVE, COMP, MKR, YFI
- Privacy - XMR, XVG, ZEC
- Generalized Smart Contracts - AVAX, NEO, SOL, WAVES, XLM, XTZ
- Exchanges - 1INCH, AST, BNB, BNT, KNC, PNG, SUSHI, UNI, ZRX
- Layer 2 Scaling - DOT, LRC
- Payments - LTC, NANO, OMG, XLM
- BTC DeFi - BADGER, KEEP
Final Warnings: Exchanges only make money when you trade coins back and forth. That's why Coinbase and the rest of the exchanges want you to think this is a good idea. For most of you, it's not.
Trading requires your focus and attention. This isn't a set it and forget it activity. Most of you will be better off hodling BTC and ETH. But if you treat this like you would a weekend in Vegas, you can have a lot of fun, learn a ton and possibly make some money.
To the moon 🚀 — @GΞR฿Z Founder & Creator @ BitLift
Tweet of the Week
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