Chasing Moonshots: How I plan to make bank in the crypto markets in 2022–23
Since this is my first ever post on Medium, I should probably introduce myself, tell a few things about who I am and what I do, but I really don’t feel like it. Instead, I will try to keep things simple: this is going to be an account about crypto. More specifically, I will use this platform (as well as other platforms) to share my journey in the Wild Wild West of the crypto markets.
I’ve been following the crypto markets for almost two years now and I have to admit that I’m hooked. And how can you not be hooked? They’re fascinating. In no other financial market you can consistently 10x your money in a year when you make good investments and go -90% in a year when you make bad investments.
This extreme risk and extreme reward balance makes crypto the most exciting playing field for money you can afford to lose. It’s not the best option if you want to get rich slow but it sure is the best option if you want to get rich (or get poor) quick.
So I decided to take on a challenge. I will try to turn 1k to 10k through crypto in one year and will document the whole process on social media. I will share all the moves I’m making and the thought process behind them, and I will provide weekly updates.
I’m nowhere near an expert trader or an experienced investor, I just really like crypto and want to challenge myself, and prove that getting abnormal returns is not purely luck. I expect this to be a learning process and a fascinating journey no matter the end result.
I will start with an initial capital of $1k and will try to turn it into $10k or more by next year. This would represent a 10x annual return. This is a extremely unnatural performance for traditional markets, not so unnatural for crypto. The challenge starts September 1st 2022 and ends September 1st 2023.
I will not be utilizing technical analysis or any kind of trading bot. The moves I’ll be making will be based purely on fundamentals, strategy, and market conditions. This is not a knack against technical analysis, I just don’t like using it (and I’m not very good at it). Plus, just looking at charts wouldn’t make such interesting content.
Since we’re in a bear market, my strategy has three characteristics:
A portion of the initial capital will be held in cash ready to deploy (for dips, Dollar Cost Averaging and special opportunities)
A portion of the capital will be allocated in blue chip coins with high market caps. These are coins that have proven their worth and utility and are expected to at least reach their all time highs again. These are coins I’m comfortable with holding long term and do not mind staking/earning yields on them, unless the opportunity cost is too high
The remaining capital will be allocated towards smaller cap coins in what I believe to be the hot sectors of the next bull cycle. These are more speculative bets, riskier, but with higher upside
I will also be on the look out for airdrops or DeFi opportunities that can maximize returns. I will generally stay away from NFTs since I’m not comfortable with my knowledge on the sector.
Right now, the crypto markets, just like all asset markets, are mainly influenced by macroeconomic factors. The inflation situation is currently the most important thing to look at. Recession fears are still valid but for the first time in months, the CPI numbers showed signs of peaked inflation. However, the FED made it pretty clear that interest rate hikes are not stopping anytime soon and the markets reacted heavily. The next CPI report is going to be crucial. If inflation is going up again, I expect prices to plummet.
September has historically been a terrible month for crypto, so I’m not very optimistic in general, but this time we have the Ethereum Merge happening. I don’t expect any significant drops, at least until the CPI report that comes out September 13th. Long-term, this is probably going to be a tough winter, for lots of reasons, but mainly because of the increased cost of energy (due to the Ukrainian-Russian war).
Since I don’t want to get wrecked before I even start, and since we’re under uncertainty, I’m going to start with the following distribution:
40% high caps
25% low cap bets
The main strategy will generally stay the same throughout the challenge but the percentages will change according to market conditions (and the progress that has been made) to keep risk at fairly the same levels.
Of course, this should go without saying, but this post, or any post in the series, is not in any way financial advice. Content is purely for informational and entertainment purposes. I’m not a financial advisor. I’m not even into finance. I just love crypto and believe the crypto markets are full of juicy opportunities if you play your cards right.
In the next post, I will analyze the “blue chip” cryptos that I keep my eyes on for this challenge, and give you my thoughts on each one of them. After that, I will write a breakdown of the potentially hot sectors of the next bull run(low cap bets). I expect both of these to come out later today. Thanks for reading and stay tuned.
If you found this interesting, make sure you follow me on Twitter for more crypto content and updates on the challenge. I just created the account yesterday so I’ll probably follow back(unless you look like a bot). Also, I know that the last image isn’t from the Wolf of Wall Street. It just looked cool as an outro.