Everyone dreams of getting rich with altcoins, but only a few succeed. Why? Most don’t understand asymmetry and fail at managing risk.
Here’s a strategy from studying top investors: 🧵👇
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1️⃣ Manage Your Risk
- Portfolio Structuring: Risk isn’t just about individual positions; it’s how they interact. Adjust asset types/amounts/weights to ensure wins outweigh losses.
2️⃣ The Cornerstone: 50%+ in $BTC
- Safety Net: Having over 50% in $BTC acts as a hedge. Long-term growth often ensures profits, even if altcoins fail.
3️⃣ Multi-Cycle Blue Chip: 25%
- Long-Term Survival: Allocate 25% to blue chips like $ETH or $SOL. This boosts your chances to outperform $BTC while limiting downside risk.
4️⃣ Remaining 25% in Smaller Alts
- Diversified Bets: Spread 25% across 4-6 equal-weighted altcoins. A few big winners can cover losses of others.
5️⃣ Equal Weight Matters
- Balanced Exposure: Equal weighting balances potential gains and losses, giving each position a fair chance.
6️⃣ Diversify Beyond Crypto
- Structural Diversification: Hedge with gold and quality stocks, considering your age and financial situation.
7️⃣ Assume You’re Wrong
- Probabilities Over Outcomes: Always prepare for different scenarios. Reflect on past losses and adjust strategy.
8️⃣ Visualize Worst-Case Scenarios
- Stress Test: Imagine the worst loss you can handle. If too high, increase $BTC and reduce altcoin exposure.
9️⃣ Seek Asymmetry
- Patience for Gains: Look for opportunities where potential gains far outweigh potential losses. Aim for 10x-20x gains with manageable downside.
🔟 Develop a Thesis
- Clear Investment Rationale: Create a thesis explaining why you’re investing. Test it over time and adjust based on results.
1️⃣1️⃣ Multi-Factor Sell Strategy
- Sell Conditions: Have multiple sell points based on Time, Thesis & Price to hedge against market unpredictability.
1️⃣2️⃣ Post-Win Strategy
- Avoid Giving Back Gains: After a big win, reassess your portfolio and avoid putting profits back into the market prematurely.
💡 Manage Psychological Stress
- Mental Balance: Invest time and money in what you love. Balance is key for long-term success.
Thread Recap:
1. Manage risk with your portfolio.
2. Assume you’re wrong and plan.
3. Seek asymmetry and be patient.
4. Use thesis validation & invalidation.
5. Employ a multi-factor sell strategy.
6. Return to step 1, have a post-win plan.
Purely educational, NFA.
