Of gains, liquidity, and bear market fomo

  • Why early stage? Gains.
  • Why liquidity? Cashing out.
  • Early stage teams have great valuations, but expect low liquidity and a lot of risk.
  • Look for early stage projects. 🌱
  • Look for mid/large cap projects. 🐂

Here and now in 2022

In a recent blog I outlined my thoughts on the continued cyclicality of crypto price cycles. I outlined my belief that there is a reasonable amount of predictability in nature of the cycles, but I also accept that the 4-year cycle model can eventually break. If the model breaks this cycle, then perhaps my timing will be off such that the market reflates when I’m not ready.

I didn’t know apple seeds are poisonous.

Gains vs Liquidity

The two strategies I mentioned above boil down to choosing whether I place greater importance on raw (paper) gains or on liquidity. Fortunately, it isn’t a binary choice so there is the potential to mix and match.

  • Time delay to launch the product and token (e.g. 2 years+).
  • Risk of failure: project dies.
  • Lack of adoption upon launch.
  • Token lock-up upon launch (linear unlock over 2/3/4 years).
  • General liquidity problems in addition to lock-ups.
a micro cap

Mid/large cap projects 🏭

Now that I have my complaints of small cap projects out of the way, I can turn to mid and large cap projects. These projects make up the main cryptocurrency market and tend to be fairly correlated in their price action: if Bitcoin is up, then Ether is up, and everything else is following.

The four largest market caps — 18/05/2022

Mixing it all together 🍲

So my overall approach will be to consider a range of market caps, across a range of themes, and hope that my multi-pronged and active approach will mean suppressing any problems of missing the bottom of this bear market.

About me🎯

I spend the majority of my time worrying about not being wiped out by the crypto market. When I find spare time I enjoy chatting to new teams just starting their journey in the industry.

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