The last 6 months in crypto — my biggest hits and worst mistakes (Part 2)
Six months ago I took some time to reflect on my biggest wins and biggest mistakes investing in crypto. It has been very helpful helping me reflect and figure out what strategies are working and which aren’t.
It’s time to update this with some new numbers. First of all, let me say that I am not a trader and have always been focusing more on holding than flipping tokens. Investing and trading is also not my main activity - even though I’m full time in crypto, I have been busy building, first and foremost. With that, let’s dig in.
Spoiler alert: since the start about a year ago, I am up 40% against the performance of BTC.
My top 3 bets
1. MUTANT APE YACHT CLUB (NFT)
R multiple: 1.75 (2.58 including $APE airdrop)
Overall gain: 14.8% of portfolio (21.8% including $APE airdrop)
Time held: 7 months
A very interesting one. This bet went from my biggest mistake at the time of last writing 6 months ago, to my biggest win. It is a living proof that patience pays off. See more details about the story here — https://twitter.com/m_goes_distance/status/1505810444228780032
Next, I will skip Nifty Island (current gain at 12.58% of total portfolio), which I have written about last time, and move straight onto the next one -
2. ETH
R multiple: 0.08
Overall gain: 6.97% of portfolio
Time held: 1 year
Even though the gains on ETH have been minimal (largely price action sideways), the position size relative to my entire portfolio has been big enough to make it into top three. It’s a simple story where I continue holding this as one of my most important positions, and one which proves that simplicity works.
Next, I will skip CAKE (current gain at 6.31% of total portfolio), which I have written about last time, and move straight onto the next one -
3. LOOKS
R multiple: 2.37
Overall gain: 1.48% of portfolio
Time held: 3 months
I have received most of my LOOKS from an airdrop, hence the R multiple would have been ∞, had I not bought some more with my own money. Still, the 400–800% staking returns on LOOKS over the first two months have been phenomenal, hence I have made all the additional money I have invested back already. I continue holding the token, as my currently biggest yield generator.
Also, notice the diminishing total returns (1.48% of total portfolio), compared to the top two positions. The power law really works and my returns are venture-style — the top two bets are more significant than everything else combined.
My worst 3 bets
1. Fortune Media NFT
R multiple: -0.64
Overall loss: 8.76% of portfolio
Time held: 8 months
How could I have lost so much money on this single bet? Simple. I went in too reckless, with a too large position. I shouldn’t have done that. I won’t do that again. What actually happened is that I bought one NFT andits price went up rapidly. I FOMOd into more. And then it tanked. Should have known better…
Nevertheless, this is a classic pplpleasr piece that marks a landmark moment in crypto history, so I decided not to sell and hold out for the long term. Hopefully this makes a comeback as my top three bet in one of the upcoming write ups, in the same way as MAYC did. Let’s stay tuned!
2. Meridian NFT
R multiple: -0.69
Overall loss: 3.62% of portfolio
Time held: 6 months
Similar story to the above. Went in when price was rapidly rising, with a position too large. Same as above, holding out expecting an eventual comeback.
3. Eponym NFT
R multiple: -0.80
Overall loss: 3.44% of portfolio
Time held: 6 months
Once again, position somewhat too large. The AI+human-generated series seemed so unique and so high quality to me when it dropped, that I couldn’t resist and kept topping up my collection with pieces I liked, until it reached 24 pieces. I did believe the value will keep rising, but I also let my emotions get ahead of my reason — I was buying more pieces because I liked them and couldn’t resist, despite the size of the position.
Conclusion
All in all, the value of my portfolio denominated in BTC is 40% higher than it was when I started to actively track it one year ago — up from 21% at the time of last writing. Perhaps not jaw-dropping but very decent, given that I wasn’t flipping, started from an already sizeable position, and was late to the NFT game.
My philosophy has always been — go steady and get far. If I can keep compounding at this rate, things can get very very interesting. Even more so as the dollar price of Bitcoin keeps rising. Enough of the praise, what did I learn over the course of this time?
- Position sizing is everything. Had I not gone in too large, my worst loses would have been much smaller. Some of my gains would have also been curbed (especially Mutant Apes) but overall the upside-downside asymmetry would have been larger.
- The Power Law is king. My biggest 3 loses are larger than all my other 21 loses combined. My biggest 2 gains are larger than all my other 17 wins combined. Also, my biggest 2 gains almost make up for all of my 24 losses. What does this mean? Pay attention to the top performers to maximize gains and curb your biggest losers early — this is a more impactful strategy than trying to make the most out of every position.
- Realize your gains. I can’t stress the importance of this. Each time one of my positions went up significantly against BTC, this was followed by an eventual decline, which in many cases has not been followed by a recovery anywhere near the previous highs.
- When the price of something rises rapidly, the instinct is always to stay invested in it or, even worse, double down with more money. This instinct is almost always wrong. In situations where I have not realised any gains I have almost always regretted it, the opposite has never been true. There are exceptions — like Mutant Apes, where in my view the thesis remains as strong as ever, despite a significant price increase. Even so, I have realised some of my gains via selling 2/3rds of the airdropped APE token.
- The converse also holds true — in cases where my thesis has changed and I stopped believing in an asset — selling it despite loses has always been the right decision, even though it’s always a hard pill to swallow. It’s better to absorb a small to medium loss, than ride it all the way down to zero, especially if that implies holding an asset I no longer have faith in.
That’s it! I am nowhere near being a top trader/investor yet, and I will probably never be one — as this is not my main focus. Nevertheless, I believe that with continuous learning, rigorous reflection, and time in the market, I can continue doing well for myself, and continue using the proceeds to fund my lifestyle and spend time building things I am truly passionate about.
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To learn more about my journey in crypto, check my other articles on here or ➡️ follow me on twitter 🐦. Feel free to clap if you like this article -
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