Make Way for the Crypto Tortoise
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October 11th, 2022

If you’ve subscribed to my newsletter, Crypto is Easy, you know that I’m more tortoise, less hare. Steady persistence rather than bursts of frenetic activity. Marathons, not sprints.

Most people are here to make as much money as possible as quickly as they can. What’s the next 100x altcoin? Is the bottom in? What on-chain data can predict the future?

I’m here to squeeze the most juice out of the market. Buy low and grow. Sell only when the market forces you to do so (hopefully not at all). Build slowly and safely. Let the market do the hard work for you.

“Mark, that’s so dumb. THE WHOLE POINT IS TO SELL!”

Maybe. Be careful about that. I’ve lost a lot of money from selling crypto. I’ve lost far less from buying it.

Down 99%

No.

It’s all about pace and patience. When you buy only after bitcoin’s price crashes 30% (50–70% drops for altcoins), you don’t need to take profits. You’ve limited your downside while still giving yourself all of the upside or more.

As the market falls further, you get better value for each new dollar you put in.

You can stop buying once the market goes up and the hares come hopping back into the market, chasing prices upward. That’s when you save your money for the next crash. Sometimes, those crashes last a week. Sometimes, they last a year.

For example, if you followed my plan, you’d have sat on your hands for most of 2021, buying only from mid-May to early August and again for 10 days at the end of September.

That may seem lame because everybody else was getting rich at the beginning and end of the year.

But were they?

Most traders lost money. With dollar-cost averaging, you would have finished the year down 3% on your investment.

With my plan, you would have finished the year up at least 17%, with money to spare.

That spare cash came in handy for buying as the market went down in 2022.

(With altcoins, the results are all over the place. On some, I’m down +90%. On others, I’m up 1,200% as of this post.)

Once the market turns around, you can enjoy the fruits of the hard work you’ve put in. If you need cash, sell your crypto. Or, spend it. You won’t need to be tactical or defensive. You can just treat it like everything else you own.

Let the hares tire themselves out chasing after a market that’s running away from them. They can fuss about taking profits, buying with leverage, catching the dips, timing the peaks, and finding the moonshot.

You can relax and appreciate your good fortune.

Win-win

When you have an asset class with so much upside and massive tailwinds, you don’t need to push too hard. Buy when you need to, let the market go up, and save cash for the next opportunity.

You win either way:

When prices go up, the value of your crypto does, too.
When prices go down low enough, you get to buy more, usually at a steep discount.

While dollar-cost averaging has its advantages and a good trader will do far better, sometimes “good enough” is good enough.

Once in a while, you might get an altseason. Use that time to shed dead altcoins and good projects that didn’t work out the way you expected. Hang on to the rest. They’ll crash 80–95% as everything else does. Buy them on their way down or after the dust settles.

Wait for the bull market?

Some say friends don’t let friends buy altcoins during bear markets. Others say to save cash for new projects that will come along in the next few years. “Never buy a falling knife, only buy on the way up.”

Fair enough. When does the bull market start? What price? What date?

If you wait for the bull market, the only guarantee is you will buy at higher prices.

For example, if you bought random cryptos in 2019, a true crypto winter, you would have peaked at a 3,000% gain. If you waited until December 2020, once everybody agreed the bull market was back, you would have peaked at a 450% gain.

You can see that on this chart of the total crypto market cap.

Given the same risk and volatility, would you rather wager the same amount of money for a bigger gain or a smaller gain?

Once you wait for the bull market, you’ll wager the same amount of money for a smaller gain. Even if the market only goes up 200% from now until the bull market starts, that means you’ll have to bring 200% more money into the market compared to today.

Also, if you wait, you will still suffer 30–50% crashes after you buy. These are more common in bull markets than bear markets, as you can see below.

Today’s market is awesome. You can find lots of interesting projects at low prices. You get to interact with earnest teams and communities that care about their projects.

You can stake their tokens for rewards, delegate them for profit, or deposit them into liquidity pools for a share of the fees. You can buy metaverse land for pennies on the dollar and your smart contract fees are lower than ever.

If you wait for confirmation that the bottom’s in, consider the money you will lose from waiting. You can make up for bad timing. Complacency kills.

No risk it, no biscuit

Cash is losing value at the fastest rate in years.

The US government is trying to destroy the price of everything, everywhere.

China’s property market will implode without stimulus and subsidies. England and Japan need extensive government interventions to keep their currency and debt markets from collapsing.

The European Central Bank remains ambiguous about whether to raise rates into an energy crisis and possibly trigger sovereign debt defaults for some of its member countries or let inflation run wild and possibly watch the Eurozone collapse.

Meanwhile, the crypto market is down 70% since November 2021.

Does it seem reckless to put money into crypto when it’s dangling off the edge of a cliff and the world’s largest economies seem destined for a catastrophe?

Maybe.

At least bitcoin works when your banks, governments, businesses, and credit card companies don’t. You can’t eat it, but you can mine it for heat in the winter. That’s more than you can say for stocks and bonds.

Altcoins are far more volatile but not necessarily riskier at these prices. Your downside is still capped at 100% while your upside is limitless. For tokens that offer staking rewards, you get free crypto while you wait for the market to recover.

Why risk that upside to avoid the same 100% loss you can get at higher prices?

No need to wait, no time to rush

Some people will always wait for confirmation that “the bottom’s in,” central banks start printing money again, and the “macro” situation improves.

Let them.

That will give us more time to accumulate tokens and participate in their related projects.

After 3AC, Luna, and lending platforms collapsed, we need to give the crypto market time to rebuild its foundation.

Your favorite stock will probably never return 500% in five years. Some altcoins will, and they’ll do far better over time. Let their prices rise and wait for the next crash to give you another chance to buy, maybe even at today’s prices.

Many of the best projects have actual development, experience, and genuine community growth — something that altcoins never had before. Bitcoin’s in a 13-year uptrend with massive tailwinds. The technology now supports actual real-world usage (though it still lacks engagement).

When you put your money on the line for a chance to grow your stakes in the financial networks of the future, you also suffer whatever consequences come your way. Is it wrong to accept some loss in exchange for a much larger gain, over time?

The hares work in frantic bursts of energy, with urgency and haste. That serves them well in life, but not necessarily in crypto.

Tortoises understand that crypto is a long race that takes courage, patience, and persistence.

One day, possibly sooner than you think, the hares will have their moment again.

For now, let them sleep. They need their rest.

We tortoises will continue to plug along, pace ourselves, and ultimately, win the race.

Mark Helfman publishes the Crypto is Easy newsletter. He is also the author of three books and a top bitcoin writer on Medium and Hacker Noon. Learn more about him in his bio.

(Cover photo credit to Antoine H.C. on Unsplash)

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