Thesis-driven investing in crypto leads to generational wealth

3 mins read
Crypto coins
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What do you want out of crypto… is it a quick buck or the opportunity to create generational wealth? If it’s the latter, then this guide is going to put you into the right mindset, so you understand how it is that the best traders and investors are using cryptocurrencies to build their fortunes and legacy.

It all starts with the right mindset

Be it that you decide trading crypto options at Bitlevex, buying spot positions on Binance, Kucoin, Uniswap or FTX, holding NFTs, etc. – you need the right mindset to succeed. Without it, you will only end up losing money, and your goal here must be to use all of these crypto products to build your own fortune that you and your future generations will be able to enjoy.

The best thing about crypto is that, unlike other industries or assets, building generational wealth won’t take you 30-40 years. It might take as little as 1-5 years if you manage it well, but for the sake of being more conserative and “down-to-earth”, we will say 10 years.

Money and risk management

You need to build a portfolio, and in order to do it, you need to allocate your money based on the following variables:

  • Potential of project (backed up by your fundamental analysis)
  • Profit potential of the project (based on the market cap and comparison versus similar projects on the crypto markets)
  • Level of risk (for example, a memecoin will inherently be much riskier than a project backed up by Coinbase Ventures, Alameda Research, etc.)

Let’s imagine we come back to the beginning of 2021, then you could have used the following allocation:

  • 70% to solid potential with low market cap (example: KDA, QRDO, UMB, XPR, etc.)
  • 15% to crypto products such as IDOs, presales, NFTs, virtual land or for a trading account focused on spot trades, futures, crypto options, etc.
  • 10% to stablecoins such as USDT, BUSD and USDC so you can buy the dips in case a cryptocurrency’s price falls below your entry point
  • 5% to risky plays such as memecoins, shitcoins, GameFi tokens, etc.

By building a portfolio this way, you’re bound to growing your portfolio successfully. We recommend to keep a 10% of your portfolio in stablecoins because, this way, you will be able to dollar-cost-average (DCA) whenever the opportunity comes by. 

Now, let’s talk more about the riskier part of your portfolio.These profits should be used to buy more tokens and coins from serious projects with excellent potential. For example, let’s suppose you bought $SHIB and made an insane return of x500, then it’d be a good idea to invest 70% of those profits into projects like KDA and QRDO, while keeping a smaller percentage to stablecoins and funds for other risky plays.

Riding the market cycles

Just like it’s essential to be able to build a solid portfolio, it’s also critical to know when to buy and when to sell. Of course, this is easier said than done, but there’s a simple piece of advice that will help you to ride the market cycles:

“Buy when there’s fear and blood on the streets… sell when there’s greed and euphoria”

As long as the project you’re buying hasn’t been hacked, rug-pulled, or failed to deliver the products and services they promised, you should be buying the dips, especially if we are within a crypto winter, because this is when you will get the best prices.

Furthermore, your best bet is to sell portions of your holdings as the prices go up. Nothing goes up forever, so you are likely to get a shot at buying again at low prices. You should hold while the sentiment is bullish, but at the same time, you also need to sell gradually, so you can accumulate stablecoins that you can use to buy the same or new projects at lower prices.

This approach will prove to be especially successful if we really are in a Crypto Super Cycle. Because the bear markets will get shorter while we will get more frequent and powerful bullish rallies. 

Focusing on the long term

If we are to focus on building generational wealth, then you need to look at the long term. Don’t marry any project, just use it to make more money, which you can use to buy new, more exciting projects that can give you an excellent ROI. So, you need to be patient, and at the same time, protect your capital.

Never keep large amounts of crypto on exchanges, always store it safely in cold wallets. Don’t openly talk about crypto and better keep it to yourself. Remember, this is about the long term, so you better be ready to protect your hard-earned money to accomplish your dream of generational wealth.

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