The Goal is to Survive

Most Crypto Investors Are Setting Themselves Up to Fail

I'm writing this on my phone after watching four episodes of Squid Game on a flight home from Canada...

Right now, the crypto market is maximally PVP - player vs player. New money isn't coming into crypto, and it's certainly not flowing into alts. The money that is currently in the market is just rotating from one narrative to the next.

If you've made more than a handful of trades (swapping one coin for another), you're in a competition against other traders and you're at a structural disadvantage. People who know what they're doing have far more sophisticated tools than you. It's a losing game.

Think of the market as a table with empty cups, and new capital entering the market as a pitcher of water filling the glasses. There are way more cups than pitchers of water right now.

I wouldn't be surprised if that doesn't meaningfully change. Don't count on an 'everything outperforms' altseason. There are just too many cups to fill and the (institutional) pitchers of water aren't going to buy your bags.

You're not going to rotate narratives better than the professional degens. I seriously wouldn't even try.

Here's a thought: what's your crypto investing goal? Can you articulate it?

I believe that most new crypto investors are setting themselves up to fail by starting with the wrong goal. If you start with the goal of retiring your family in the next five years, or buying a house in the next 18 months - you are going to crash out.

When you have a go big or go home mindset, you wire your brain to think that you need to push all your chips into the middle of the table. Don't do this!

We are potentially sitting at the cusp of true global Bitcoin (and to some degree crypto) recognition and you're losing all your money? Zoom out.

I am here to tell you that it's ok to set a more modest goal. In fact, I recommend it (not financial advice :D).

You see the price of BTC at 100k and think it will never get you 'rich', and you may be right! But here's what just a small percent (say 5%) of your portfolio in BTC can do - it can put you ahead of the economic stagnation that so many people feel.

It might not buy you a house on its own, but it can juice the returns of your retirement savings that might currently look concerningly low, without risking everything you've already earned.

For most people reading this newsletter, you're best off with just a small percent of your investment portfolio being in BTC (and BTC only). If we're right about Bitcoin, you'll do just fine. If you're comfortable going out further on the risk curve, some split between BTC/ETH/SOL is plenty of a high enough return profile for 95% of investors. I sincerely believe that.

For most people, I'm not sure you should even allow yourself a small percent to trade or play around with other alts or memecoins. It's an 'abstinence is easier than moderation' kind of thing. I can avoid eating chips if I don't buy them, but if they're in the house I'm going to eat them. I've seen too many people unable to resist eventually selling their BTC/ETH/SOL to buy more junk.

Crypto is a 3 trillion asset class with the potential to be a 10-15T one in the next few years, and 50T+ within a decade. Your one rule should be to survive at all costs. You should not be down so bad that you have to exit the market entirely.

Crypto is both the next evolution of the financial internet and part of the degenerate gambling economy. The former is positive sum, the latter is negative. Crypto is not any scammier now than it’s been in the past. If you think that, you haven’t been around.

If you don't know what to do: simplify. You really are going to be ok if you just have a little BTC and nothing else. This is a long game. You don't have to pay attention every day. At an absolute maximum, stick with single digit number of coins in your portfolio.

If it helps, I am here as energized as ever. Maybe it's because I work in crypto and am surrounded by an insanely talented group of people, but I see how many awesome things are being built right now and am excited as ever.

Your psychology is the key factor to survival. You need to be able to look at yourself, your spouse, your parents, your kids, your banker, or your landlord and say: "My crypto is down 80% and I am cool" - then you are in an OK place for long-term survival.

The goal is to survive, friends. Don’t get lost in the sauce.