Original article from Edgy
Compiled by | Odaily Planet Daily Golem (@web3_golem)
The crypto market experienced a sharp drop last week, and many users are confused about the market: Is this bull market over, or has the real bull market not yet begun?
Crypto KOL Edgy suggested that if this plunge affects your emotions, you should stop and calm down and rest for a few days, because you can't make the right decisions in a bad mood. At the same time, Edgy wrote a coping plan for the rest of this cycle, including his investment portfolio strategy. Odaily Planet Daily compiled the content, hoping to help readers develop a crypto strategy that suits them.
Portfolio Strategy: Choose Altcoins Carefully
The US election will be held in a few months and the situation in the Middle East is escalating. No one knows what will happen in the next few months.
Market conditions could get worse than they are now, so the right thing to think about right now is how to "survive". Maybe your portfolio has lost 30% of its funds, but that doesn't mean it can't shrink further. (Anyone who tells you to maintain an aggressive strategy now probably has ulterior motives, as he or she will have a hard time getting rich if he or she maintains a sound risk management strategy)
If more than 90% of your current portfolio is still in altcoins, it may be difficult for you to "survive". Edgy's personal portfolio strategy includes 25% mainstream coins, 45% stable coins and 30% altcoins. The main holdings are as follows:
Mainstream currencies: BTC, ETH, Solana;
Stablecoins: USDC or USDT, which can also be invested in stablecoin yield agreements to obtain stable returns. Stablecoins are conducive to protecting personal investment portfolios and quickly buying more projects when the market changes;
Altcoins: It is difficult to get rich with stablecoins and mainstream coins in the current crypto market. Altcoins are equivalent to the "forwards" in a football team, and now may be the best time to buy them at the bottom.
So, what altcoins should you buy in a bear market?
Edgy prefers to buy some altcoins based on fundamentals rather than pure hype (such as Meme or AI), and is interested in Mantle, Pendle and BananaGun projects. The selection criteria for altcoins are as follows:
Metrics: TVL is strong relative to price and is able to generate revenue;
The strongest currency to recover from the August 5 crash;
There is money in the project treasury to survive the bear market;
There is solid community support;
Product/market fit and user volume.
Despite this, Edgy reminds users to avoid anything too risky and to avoid holding too many altcoins. Because the crypto market narrative keeps changing, try to wait for more information on the cyclical direction before choosing to buy. As for when to buy? You can build a simple DCA system to liberate yourself mentally. (Odaily Note: DCA is translated as dollar cost averaging, which is an investment strategy that reduces the impact of market fluctuations through regular fixed-amount investments.)
Cash is king
Cash is king, and cash flow is what keeps you sane during turbulent times, especially when you donât have to sell crypto to pay for your living expenses. While everyone wants more cash flow, itâs hard to give specific advice on generating cash flow because not everyone is good at the same things.
Usually, you can generate more cash flow by switching to a new job with a higher salary, negotiating a salary increase with your boss, or working overtime. But it is well known that the crypto industry hates working from 9 to 5, so assuming you have no source of cash flow now and no specific skills to make money, what should you do? Here are a few suggestions:
Reading Eric Jorgensen's Navalmanack will give you a good foundation on how to think about modern business. Develop specific knowledge x leverage.
Reverse engineer everyone. The best business ideas often come from watching others and seeing what they are doing. What are they selling? How do they make money? What is the business model?
There are actually many ways to make money: writing, video editing, programming, agency, etc. The key is to try to find the intersection of "what I like x what I am good at x what people are willing to pay for".
At the same time, an underrated benefit of cash flow is that it allows you to focus on other things. Staying in the "trenches" for too long will lead to excessive fatigue and poor performance.
Do the right thing
Edgy shares his recent study method:
But make a habit of taking notes every time you see an unfamiliar phrase or term, and quickly spend 5-10 minutes researching it to see if itâs worth your time. If it is, then spend a few more hours researching it. The key is to save time and focus on whatâs important.
Try out new Dapps in your wallet, check out DefiLlama and the latest newly listed protocols. Thatâs how you discover Alpha before everyone else.
Experience unfamiliar ecosystems. If you are very familiar with ETH L2 and Solana, but not familiar with the TON ecosystem, you should take the time to experience it.
Reflection. Dalio once said "Pain + Reflection = Progress". Spend the next few days to see if you can learn from this experience. Your trading/investing style is equivalent to an algorithm in your head, and reflection is a way to "update" that algorithm.
Improve your information channels. If you want better ideas, you have to consume better content. Now is the time to audit your information channels: YouTube channels, newsletters, Twitter accounts, etc. This is necessary. Maybe someone used to be a good source of information, but then they became too political or they started doing secret advertising, so we should constantly upgrade our information channels.
Re-evaluate your trading system. Do you organize your research? What are your take profit and exit strategies? How has your portfolio changed over the cycle? Now is a good time to revisit and update anything.
Also avoid doing the following:
Leverage. Leverage affects everyone's living conditions. Edgy shared that he stayed up late to check his positions a few years ago for fear of being liquidated. When he realized that this was not a good way to live, he never touched leverage again.
Everyone's mind is like a garden, don't let the weeds in. Don't make fun of people who idolize celebrities, but also pay attention to every crypto industry debate and drama.
Exhaustion. There may be many people who tell you to "sit still" so that you can earn wealth that will last for generations. So you may feel the need to spend 16 hours a day in the "trenches" and be isolated from the world. But in fact, crypto is a marathon, not a race, and what we need is steady progress. A real bull market is indeed exhausting, and we should conserve our energy to avoid exhaustion before the bull market.
Conclusion
This is the weirdest cycle yet. Everyone was preparing for the normal 4-year bull-bear cycle, with two major crypto ETFs taking us into a bull market. Instead, we had the biggest crash since FTX. This crash caught everyone off guard, but we have survived Mt. Gox, Terra Luna, and FTX, and every crash in crypto is an opportunity as long as we can adjust our strategy to get through it.
