GM.
Good Morning my fellow degens…those who I like to call the Chico Army.
Even if it’s not morning where you are, anytime is the time for a good GM.
Well your morning is about to get a whole lot better because chico is about to drop
crypto portfolio content like it’s hot.
Let’s put the two together…because it’s time for Chico Crypto!!
Sooo, just admit it…most people out there don’t know what they are doing when it comes
to building a good crypto portfolio.
They suck…and they base their portfolio picks on looking for that big ole moonshot,
which equals filling up their portfolio with shitcoins whose value doesn’t go to the
moon, but to the depths of hell.
Don’t be a shatcoin chaser, but you can’t be too conservative either.
By playing it too safe, you miss major opportunities which means missing out on some sweet sweet
gains.
Creating a solid portfolio is all about gauging risk tolerance in the markets.
When the markets are reaching peak hype and euphoria, you want to start to scale back
your risk tolerance, and set yourself up in conservative assets like stablecoins.
When the market is reaching peak fear…it’s time to start getting more aggressive and
turning those stablecoins into altcoins you see winning when the bulls return.
So think of your portfolio like setting up an army for the battlefield.
When the markets are at peak fear, you want to increase your risk tolerance…which means
putting forward more infantry men, aka coins with a higher risk profile and less defense
aka coins with a low risk profile…better known as stables.
You wanna go on the offensive.
When the markets are at peak greed, you want to go on the defensive.
Which means pulling back your infantrymen, and converting them into defense aka stables
who can protect your portfolio from a coming bear onslaught….
Sooo, if you think right now we are near the bottom of where Bitcoin will fall, it’s
time to go on the offensive…it’s time to start taking the stablecoins you may have
been in and reallocating them into riskier altcoins which you should DYOR to make sure
they are solid plays which will surge when the markets return.
Although, if you are bearish….and think the markets are going to fall even further,
it would mean you would want to allocate any risky altcoins into stables, and keep the
allocation of stable defense you already have.
This is a personal choice…of how you see the markets.
So what is Chico Crypto’s view?
Well remember this is not financial advice, and you shouldn’t base your portfolios on
what I just say.
I personally think…we are close to the bottom, we may fall a bit more this week due to the
FOMC meeting next week, but I don’t think by much…
Sooo, before building or reconstructing a crypto portfolio, you have to gauge the risk
in the markets, but you also have to gauge your own risk tolerance.
You need to ask yourself some serious questions, and do some soul searching to figure this
out.
Like the number one question, how long have you been in cryptocurrency?
Do you consider yourself an expert, beginner or intermediate?
Then a major question, number 2 to ask yourself: how would you feel if your portfolio crashed
and got reduced by 90 to 99 percent?
Question number 3 to ask yourself.
Do you have any other assets outside of crypto to help weather a storm?
Stocks, Retirement, Real estate, precious metals, Cash money?
Question number 4: How much money do you make outside of cryptocurrency?
Do you have an alternative income source?
Question number 5: How has your performance been across your assets over the past year?
How have you been feeling about your trading?
Those are just example questions, but by asking yourself them and answering them honestly,
you should be able to assess and get your risk tolerance.
Now, I have a high risk tolerance.
I’ve been involved with Bitcoin since 2013, but only really got heavy trading in 2017…I
consider myself an intermediate close to expert.
I have been involved with 2 major crashes where my portfolio got reduced by 90 to 99
percent, although I’ve stuck around and now my portfolio is very healthy, where even
if another 90 to 99 percent crash happened, I would be just fine.
That is why I’m majority all in on crypto, I could weather a storm and be fine without
alternative assets.
And I do have an alternative income, through YouTube…which isn’t tied to the crypto
markets directly.
I’ve been feeling good about my trading over the past year, even though the performance
hasn’t been the best lately.
So ask yourself those questions…and figure it out.
Because the next step is to start constructing your portfolio!!
So for a brand new soul getting into the crypto markets, there is only 1 portfolio I recommend.
That is constructed of only 2 coins, Bitcoin and Ethereum. 50 percent BTC, 50 percent ETH…the
50-50 portfolio
Newbies don’t know how to use DeFi, they don’t know how to use DEX’s, they don’t
even know where to trade alternative crypto’s on centralized exchanges.
They know how to use Coinbase, Cashapp, or Robinhood.
Thus, getting easy and simple exposure to the crypto markets is of utmost importance.
Although, what if you aren’t a complete newb and you have some risk tolerance and
the markets are ripe for a bullrun?
Well then it would be time to split up your portfolio a lot differently.
Taking 25 percent of your ethereum and putting it into higher risk altcoins, and taking 25
percent of your bitcoin and putting it into higher risk altcoins.
Thus your portfolio split would be 25 percent Bitcoin, 25 percent Ethereum, and 50 percent
higher risk altcoins!
So what are some examples of higher risk altcoins?
Well in my opinion, unless you're experienced looking for a quick flip, memecoins besides
dogecoin should be out of the picture.
You should think of use cases and identify the sector being constructed under the cryptocurrency
umbrella.
Like DeFi, NFTs, Metaverse and Gaming, Derivatives, ETH Layer 2s, Layer 1 Alternatives, and more!
So who are some DeFi coins I’m liking?
Well I’m really liking GMX which could also be put in the derivatives category as it’s
a decentralized perpetual exchange.
Why GMX?
Well it’s a great portfolio builder coin.
GMX pays out a portion of staking yield in the native token of the chain.
So, users on Avalanche receive AVAX, and those on Arbitrum/Ethereum receive ETH.
This allows for user self-selection into preferred reward, and creates natural diversification
into a less-risky asset.
Another DeFi coin/derivative I’m liking?
Synthetix network…which does the speaking for itself…
What about NFTs?
I like NFT infrastructure more than the NFTs themself.
Why search for gold, when you can sell the pickaxes to the miners?
So a big NFT infrastructure play I’m liking could also be grouped into ETH Layer 2’s…because
it’s a ZK rollup layer 2, and that is Loopring.
As we know, Gamestop’s NFT marketplace beta is built with Loopring tech!
But Gamestop also has another partnership, with Immutable X, so their token IMX is also
a great NFT infrastructure play, which could also be considered an ETH layer 2 play, as
IMX considers themselves the first Layer 2 for NFTs.
So these are just examples of some higher risk altcoin assets.
If you would like some other examples, of Metaverse and gaming, eth layer 2’s, alternative
layer 1’s, just take a look at some of my previous content.
But what if we aren’t in a bull market…things are bearish how would you construct a portfolio
then?
Well, you could go all into stablecoins, 100 percent, but then your exposure to crypto
is all gone, and no one really knows where the markets will go.
So my recommendation is a 50-50 split, of stables and the top 2 cryptocurrencies, Bitcoin
and Ethereum, and a small amount of high risk altcoins…this is the safety net portfolio,
and it’s 50 percent stables, 20 percent Bitcoin, and 20 percent ethereum, and 10 percent
high risk altcoins.
But what about an intermediate to advanced trader, with a high risk tolerance…who wants
the one size fits all portfolio and is ready for a bull market?
Well this is what I call the almost perfect portfolio, and it consists of 15 percent Bitcoin,
15 percent Ethereum, 15 percent alternative layer 1’s, 15 percent ETH layer 2’s, and
40 percent other high risk altcoins in differing crypto sectors.
Now there is so much more to building the optimal portfolio, rebalancing into alternative
coins and stables, and knowing when to do that.
Although, make sure you don’t get too optimistic and aggressive spreading yourself too thin
between 20 to 50 to even 100 coins.
You want a game plan, and you gotta stick to it.
Remember this is not financial advice, but hopefully this video gave you a good starting
point.
Cheers, I’ll see you next time!