Crypto Investing

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Crypto Investing
Crypto Investing

Hope this is helpful and know that I’m not a financial advisor.

I’m biased in all of this because I’ve been very lucky with my crypto investments & my entire business sits on top of crypto

I’m so long ETH & BTC. I moved half of my BTC to ETH 3 years ago and its grown 3000% since. I believe ETH is where BTC was in 2014 and has a massive amount of room to grow. It will get faster, cheaper, and more scalable over the next 18 months and the entire world is building on top of it. One strategy would be to go all in on these 2, I have more in ETH than BTC these days, or below is a way to think about doing a few more projects that are interesting to you too.

I would recommend checking out

https://coinmarketcap.com/⁠

so you can see the market cap (size of each token) all ranked + information about it. Good to check out things for yourself.

Here’s a list people worth following to learn more as I don’t believe in investing in things you don’t truly understand

⁠

https://twitter.com/magdalenakala/status/1457017007195361284?s=20⁠

⁠

Great crypto newsletter to read weekly from one of our investors

https://sound-ventures.us20.list-manage.com/subscribe?u=602b68ef36bf28827e14a10fa&id=d71f7390b3⁠

⁠

I’ve personally been investing in crypto and startups since 2012 and have always viewed it as a long-term shift in how the internet works and tokens are basically the same as startup stocks. So, I would treat them as investing in startups.

One thing I personally believe in is knowing and believing in what you’re investing in so I’m happy to answer questions about anything below, but please also research and understand what you want to invest in. The only way to hold something for the long term if or when it drops by 80% is to truly believe in idea, team, and project long-term. So dig in and learn, I’ve also added descriptions below to help.

It’s worth noting that crypto is at all-time highs right now, so I do not have investing advice on if now is a time to buy all-in... It definitely could have another winter in the short term but I’m very bullish long-term. A way to de-risk this, is to buy half in today and buy half in in 3-6 months if the market falls. (It’s called dollar cost averaging) If it doesn’t fall then you view today as a cheap entry point, if it does fall then you are able to buy back in and double down.

A few notes about investing in startups/crypto:

Only do it if you can invest with a 5-7 year time horizon with no intent to sell

For reference I bought BTC at $44 in 2012, held for 5 years and sold half of it at $5k. I did the same with Ethereum. I share this because it’s really hard to hold when you have such gains but if I had held the BTC it would now be worth $56k/token. I made great gains regardless but your biggest losses are by selling too early and missing the upside. It’s really hard to understand Powerlaw and exponential upside which is very different than bonds or public stocks.

Put small amounts of money in to try and make X’s as returns not %. It’s a very different way than investing in bonds or stocks. You want small bets in multiple places and know most might not work but the ones that do pay back everything.

The short-term is very volatile so don’t try to time the market. Set it and forget it basically. The good returns in startups/crypto are made by picking the right tokens or startups and holding them for a long time and the projects end up being very big and meaningful

If the market crashes in the short-term, I would double down on the tokens you’ve already bought.(aka you believe in them, there’s just a macro market setback and now you get a discount, buy more!) Crypto goes through “crypto winters” and cycles that have been extreme in the past, every winter if you just bought more of what you already owned you’d have ended up getting even better returns (think about this when you come up with your total amount to invest and maybe invest 50% today and 50% in 3-6 months based on what happens)

I invest in what the best investors in the world are investing in and where the developers are building. ETH is where all the developers are building, a16z and Paradigm are the best VCs in the business. I’ve added all of their investments in the other tab which allows you to go research projects on your own if you’re interested in them.

I would only invest what you can afford to lose

I would look at investments in tokens in 2 ways: Mainstream tokens & Startup tokens

Mainstream tokens (Bitcoin, Ethereum) - These are underlying technologies that enable a lot of things to happen on top of them

Bitcoin: A global currency and store of value, like Gold

Ethereum: A global computer and smart contract that can enable others to build products on top of it. This is the base layer for NFTs, Wallets, and Defi (think loans or insurance products without middle loan managers needing to be involved)

Startup tokens (Solana, ENS, Axie Infinity, The Graph, etc) - These are basically companies and startups being built that you can buy tokens in similar to buying startup stock. I own all of the startup tokens mentioned below and in the pie chart. Much higher risk (most startups fail) but for the good ones that do well, the upside is exponential)

Solana - An Ethereum competitor that is faster and cheaper, gaining lots of traction (many of the best VCs involved)

Axie Infinity - An online game that allows people to offer goods and services online (a16z led their round)

The Graph - An analytics tool that helps pull information from crypto

NFT/Music/Community tokens (these could be things you could be involved in that would also be beneficial to your career / you could get more tokens by being involved with them)

I would reserve 20-30k to wait til you see an NFT project that is exciting + maybe you will launch your own community NFTs soon.

I would also talk with NFT leaders about what you should be doing for your community and brand. NFTs are for sure the next wave of the internet + community where everyone is an owner of it and access is granted based on NFTs, so much opportunity here.

I think you understanding this technology, starting to invest in the companies that matter, and buying/learning how NFTs work would be very beneficial

I can connect you with some of the best people helping NBA players, huge artists, etc do stuff right now who could help you as well. Once you realize that selling digital collectibles / tickets / meet & greet stuff online that you get a cut of every resell and the economics that this will mean to you, I think you’ll want to dive in head first. Check out how Gary Vee uses NFTs to give access to him, his events, and people want to own them based on what’s rare

http://veefriends.com/⁠

(he’s made over $100m already, which is fucking nuts)

Startups/Tokens are about access and believing in something before anyone else. To be good at this is to know that 10% of the investments make 95% of the returns and most others could go to zero.

If you want to consider more startup investments as an asset class, we could chat more about this as I think there’s a cool opportunity to be able to meet founders you like and projects you want to get behind and help with your audience and

Here’s how I personally think about this (but it’s worth sharing that while I have a lot of money in crypto, most of my gains happened because I was early BTC and ETH and held... I’m trying to think about this from a money in today and holding from today) 2-3 Mainstream tokens (less risk) and half into 5-10 Startup Tokens (higher risk, higher reward)... Here’s the breakdown of my current startup portfolio adjusted to be 100k total investment.

You could also just go all-in on ETH & BTC and watch for a while and learn more about startups. I would do 60% (ETH) /40% (BTC) or this is how am currently invested below as a %. I made it $100k since that is what you said.

Crypto holdings

Crypto holdings

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$100k % breakdown

$100k % breakdown

Name

Symbol

Amount

Purchasing and holding:

So, there’s 2 ways to do this and this probably requires a bigger conversation.

Centralized (like a bank) - This would be using

coinbase.com⁠

- This is probably the place to start and you can buy all tokens above on Coinbase after setting up your account.

Wallets (you own everything, you’re in charge of safety and security of it) - This is the way you can never lose your tokens if the bank (coinbase) gets taken down or hacked. That said, this requires a lot more work to setup. Happy to talk through this.

NEVER EVER give away your private phrase or key to your wallet. EVER. You should write down this key 3 times and put it in a safe or somewhere else.

NFTs & ETH wallets:

I would setup a

Rainbow.me⁠

wallet and buy 2 ETH and move it to this wallet. Can show you how to do this.

Starting to interact in NFTs on

Opensea.io,⁠

finding communities and artists you like, and thinking about how you will do this in the future will probably be beneficial in my opinion. NFTs are mostly traded in ETH so you need some ETH in your rainbow wallet to buy and sell NFTs... NFTs are WAY riskier than tokens and startups so be careful. Think of this as learning. To send ETH to Rainbow, buy it on Coinbase and then send it to your Rainbow address

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Purchasing and holding:

NFTs & ETH wallets:

Crypto Investing
Crypto Investing