I was inspired by a DDI article, “I Beat 98.4% of Wall Street Investment Funds Last Year. Here’s How.”
Kudos to the authors, Henrique Centieiro & Bee Lee. They hit a 56% return, a phenomenal result.
I did an 88% return Over that same time frame.
Proof?
One of my subscribers did the math for me. Check his work:
“All-time” starts with the date of the purchase of each altcoin. I bought a new one every two weeks.
The calculation is one month old. Since then, some altcoins went up, some went down, and I assume the winners and losers evened each other out. If anything, it’s probably higher today simply because the crypto market’s higher now than it was on January 6, 2024, when he sent me this report.
I won’t ask him to update it. Not my place. It didn’t feel appropriate and it’s not relevant (the comparison in this article relates to 2023).
Besides, close enough is good enough. When your portfolio can swing 50% up or down in any given month, you don’t have to be so precise.
Could’ve been better, could’ve been worse
An 88% return probably sounds lackluster for crypto, but it’s better than you’d have gotten for dollar cost averaging into bitcoin (54% gain on an average price of $28,800).
You’d have beaten the overall market, too — 75% ROI on an average market cap of $943 billion.
Sounds great until you realize you would have gotten better results if you had put all of your money into bitcoin on January 1, 2023. You’d have gotten a 150% gain for the year!
Oh well. 88% is not bad. If you’re reading this article now, you may have done better. Most people did worse.
Four step process
My secret?
Four steps.
1. Buy at the bottom of the market. Wait for technical and on-chain indicators to reach their bottoms, then buy.
You’ll feel terrible when your investments keep going lower, but with these assets, you’re going to get a 50% drop no matter what the market conditions are, at peaks and bottoms.
You don’t even need to pull up individual altcoin charts to make this point. Look at the “safest,” “least volatile” altcoin, Ethereum. It sees 50% drawdowns regularly, circled below.
I wanted to show you the 30% drawdowns, but they’re so common they took up almost the whole chart!
Smaller, “riskier” altcoins see even more volatility. If you’re going to suffer that volatility, you might as well get the most upside for your troubles.
2. Buy more after big crashes. Yes, prices can go 90% lower after a 90% drop, but they can do that from any price.
After the market crashes, you get less downside and more upside. You can even make money off of altcoins that died along the way.
Take a look at the portfolio report. One of those altcoins died after a 200% gain (500% since I mentioned it in one of my altcoin reports).
I sold another altcoin for a 60% loss (also one of my altcoin reports).
Combined, that’s a 70% gain on investments that failed. You can only get those results when you “buy low.”
3. Never take profits. With crypto, you’re playing for a few huge winners. A 100x return is hard enough! You make it twice as hard when you sell 50% after your first double.
When the market’s hot, you can sell some crypto if you’re concerned about your cash position or you worry you can’t make more of your government’s money — as long as you read my checklist before you take profits.
4. Read my series of articles about altcoins. You’ll see the data, evidence, and analysis to help you make sense of these assets.
Stay tuned
Mark, are you saying I have to wait until the next bear market before I can put money into crypto?
No.
Once bitcoin’s price goes into the buying zone of my plan, you can put more money into the market.
How much? How fast? In what way? What percentage into altcoins versus bitcoin? Where should you draw your funds? Do you sell stocks or bonds? Do you borrow against lines of credit? Do you use cash?
We’ll have to see what the market’s doing when we get there.
If you’re subscribed to my newsletter, Crypto is Easy, you’ll get the rundown. You’ll know what I’m doing so you can plan accordingly.
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 and connect with him on Superpeer or Tealfeed.
