Please refer to the Backdrop Post and trade with mindfulness.
Please refer to Definitions page for any terms or abbreviations that I use that you don’t understand. If a term is missing, please let me know.
This post will be too long for the email, please come to the substack website.
Substack has launched an iOS app for those of you using apple devices. I am an android peasant and can’t tell you if its good or not, but check it out if you have an iPhone or some other such trappings of royalty.
Please feel free to skip around or ignore certain sections if it does not apply to you. The Table of Contents is made to preserve your time in this manner. You can always simply read the conclusion if you are in a hurry.
For this post, you should be familiar with the Beginners Guide to Crypto.
Table Of Contents
Moon Rocks in the Trash Heap
Necessary Criteria
Evaluation Criteria
Managing Risk
First Round Selections
Conclusion
1. Moon Rocks in the Trash Heap
So you missed the Bitcoin run-up. You missed the Ethereum hype train. You missed Solana’s launch to the moon. You missed Luna’s rise into prevalence. And I presume you don’t want to miss the next alt-coin explosion. So how do you find those promising projects?
A few weeks ago, I was asked to consult with a connection who was in the middle of a job application to redacted (a top 3 centralized crypto exchange), and he was asked to create a listing thesis for this centralized exchange as part of his interview process. Essentially, he had to choose a layer 1 token outside of the top 100 that is currently not listed on this centralized exchange and then write a thesis for why it should be listed there. While working through that with him, I realized that it’s probable that one of the next moon-bag’s might very well be among the tokens we looked through and discussed, so I figured that it would be of use for my dear readers to be privy to.
What I am going to do, is choose a handful of tokens in the top 100-200 range for total marketcap and outline my reasoning for why these tokens have the most potential promise, and then next week I will choose 1 to do a full review of.
For reference, you should not be buying a large position in any of these if you do choose to invest. At most, a moonbag allocation should be 2-3% of your holdings, as there is a major risk that any of these could go to 0. You don’t want to be putting anything into this that you can’t afford to lose, and as discussed previously, if your position doubles, triples, or quadruples, you want to take your initial investment out so that you can ride a risk free position past that. Crypto is fickle, and when I do finally get around to finishing the $FTM review (I’ve had to rewrite it 3 times and counting), you’ll understand why. Hype comes, and hype goes. Best to take profits while they are there, because crypto is a fickle market sector and nothing salves the emotions quite like profits do.
So where are we looking? In the trash heap. There are thousands of crypto-currencies, but outside of Bitcoin, Ethereum, and Binance Coin, everything else is questionable. However, those in the top 100 are at least semi-relevant with some form of active user-base, marketing, and attention. Outside of the top 100 you will find mostly trash, abandoned protocols and ghost chains. However, you will also sometimes find new chains that haven’t hit yet, or haven’t had their moment in the sun. That’s what we’re going to look for.
Keep reading with a 7-day free trial
Subscribe to Flirtcheap’s Asymmetric Economics to keep reading this post and get 7 days of free access to the full post archives.