How to Navigate the Crypto Bull-Market Phase 2

This article contains a summary of several risk levels, and how to approach this massive crypto market explosion we are going to see in Q4. Since the crypto bull market is heating up, we would hate to see people miss out.

What type of Investor are you?

In reference to our recent article from Justin Mckennon [here], regarding how to get started with crypto in October, this article is a extension for our subscribers. First, we will go over what type of investor you are aiming to be (there is no wrong answer). Investing in any asset can have varying levels of involvement depending on how interested a person is, or how much time they would like to spend playing the market. The first category is the long term HODLer, this investor dollar-cost-averages a few of their favorite assets and holds them long term. This is the least risky type of investing; it also generally requires the least amount of time spent. HODLers pick fundamentally strong investments and hold them for several years. In many cases they may even benefit from not checking their portfolios for weeks at a time. 

The second category is the medium risk investor, in my opinion these investors have some Bitcoin or Ethereum exposure, but also dive deep into other trending tokens with several hours of research on investments. The third type of investor is high risk – these investors spend hundreds of hours researching, often have an intimate knowledge of technical analysis, and often move tokens around following trends. The final type of investor the trader. Trading requires years of dedication, and the strongest stomach of them all. When trading, you can lose it all, or become a millionaire in a week. I tend to find myself somewhere between medium and high-risk during bull-markets, and medium-HODL during bear markets.

Strategies for each Risk Category

The long-term HODLer tends to carry larger market-cap tokens, usually a handful of assets, most often Bitcoin and Ethereum. There is nothing wrong with holding just Bitcoin or just Ethereum as you will likely outperform the stock market. These investors slowly buy into their picks week after week, If I were HODLing for several years with only a few assets I would focus on Ethereum. For my logic as to why I would hold Ethereum over BTC for the next 2-5 years please check out [this article]. Medium risk investors would benefit from holding Bitcoin, Ethereum, and a variety of other large cap smart contract ecosystems. A great example of this portfolio would include a mix of Bitcoin and Ethereum, totaling 40-60%, and the rest in other popular large caps. These other large caps would likely include Cardano, Polkadot, Solana, Terra, Avalanche, Chainlink etc. The high risk investor finds themselves in such risky territory because they are exposed to very speculative lower market cap tokens like SPI or Charli3. Generally, the lower market cap you go, the more chance you have of losing all of your investment in a token. What makes this risky is two-fold, you lose your initial dollar value investment, and also lose the opportunity cost of what could have been in BTC or Ether. This cannot be understated. Picking a token and betting an Ethereum and losing your entire bet is detrimental. Here is a watch list I have for RIGHT NOW. Do your own research, but these are trending token narratives.

Crypto Bull Run, Custom Watch List Coingekco

Rules to live by

With these last two sections in mind, we come to the concept of balance. Balancing your investments based on their relative risk can aide you greatly. Institutional investors that have moved into crypto have large percentages in Bitcoin and Ethereum. These two assets have proven themselves; they are the faithful top two. My long-term goal with my choices is to outperform Ethereum completely with my portfolio. This is a lofty task, I am outpacing it, but not by leagues and bounds. I learned early on that betting some Ethereum on low caps is very risky, I have learned my lesson time and time again.

If you have read our other articles you will notice, we always caution going all in on any asset. We also highly discourage margin and leverage trading, it simply should be left for professional traders only, crypto is too volatile. When looking at tokens under 1 billion-dollar market cap, invest smaller amounts, adjust your allocation based on risk. The less risky, the more percentage allocation, micro-caps, or those under 100 million dollars should never individually compromise more than 5% of an allocation. Of course, if you really nail it with a bet and its up 100x, you will notice it carries a large weight in your portfolio. Always make a target for your initial profit taking, if you win a bet on a low cap, take your initial investment out at a 3-5x. Ride the token up for another amount, say a 10x, sell another 20-30%. These profits can be taken into BTC, Ethereum or stable coins. This is how I invest during bull markets, I do not go for that hail mary all or nothing bet on a massively speculative token. Crypto isn’t a get rich scheme, but a get rich faster than the stock market play. As always stay safe out there and remember this is not financial advice.

My Recent Market Moves

I added FTM to my portfolio shortly after writing the article on the project. I of course added LUNA before my writing of the Terra LUNA article. I added some profits from Binance smart chain into native harmony (one) token on Bianance US, I love the project as an aggressive growth pick. I also have been adding AVAX slowly over the past week or two. I took some profits on Convex finance, which I did not want to cover related to the risk, but definitely worth checking out if you have time. These profits were rolled into Ethereum to de risk some of the portfolio. My other small cap token I added was Phala, which was briefly covered in our Polkadot Narrative 2-part article. I hope this transparency helps, I do not aim to have viewers follow my moves, but I want to be as transparent as possible to avoid conflicts of interest. I appreciate you reading this article, thank you!

Patrick O’Neil

About Patrick O’Neil


Patrick is an avid technology and gaming enthusiast. Patrick taught himself how to assemble computers in 2010 and was always fascinated with the gaming market. In 2019 he decided to sell his grayscale Ethereum funds and dive into the world of crypto firsthand. 

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