Are you ready for an altcoin explosion that will melt faces?

If not, get ready. If you’re feeling bad about seeing bitcoin run hard, you’ll feel even worse when altcoins zoom past it.

For premium subscribers, I have talked about these trends for months and will cover them for the duration of this bull market.

Most people get REKT during altseason. I like to lay low, sell some weak or big projects, and wait for the dust to settle.

If you can't do that, the post is for you. Sections:

• Take inventory of all your assets and debts

• My BTC-to-altcoin allocation

• Look down before you look up

• Spread the wealth

• Remember maths

• Can’t choose? Why not both!

• Questions

Take inventory of all your assets and debts

Altseason doesn't come often and doesn't last long.

These speculative manias run their course fairly quickly.

When they're done, you're left with a purely speculative asset that offers no rights, privileges, or protections. Often, your tokens have no fundamental value.

Your government won’t bail you out if the market crashes and even the strongest projects could break up, get hacked, or go to zero at any time.

Many altcoins have ridiculous inflation schedules or treasury policies that encourage early investors to dump tokens on the market. Some have shady teams that aren’t really committed to their projects.

Treat them as such.

While you can’t ignore the 1,000x potential returns from holding these investments, you should probably make sure you’re in good shape if they don’t work out. A little planning can’t hurt!

Take stock of everything you own and all the debts you have. Are you covered when altseason ends and the market crashes?

Sign up for a free account with Empower and link your investments, debts, savings, real estate, and other assets—including your crypto—to their dashboard. That way, you get a full view of your wealth and how your crypto portfolio fits into the big picture.

Tap this button to get a $50 reward for signing up and linking at least one account.

The dashboard is free.

You can also sign up for personal wealth management. My financial advisor is super-knowledgeable about wealth creation and how to use different assets, investment vehicles, and financial strategies to put you ahead of the game. I learn something new every time I talk to him.

My BTC-to-altcoin allocation

I keep a strong, core Bitcoin position. It’s one of several assets I hold in my overall investment portfolio along with real estate, stocks, bonds, and cash / cash equivalents.

Bitcoin is not a speculative investment. Everybody should have some. I never mix my Bitcoin with my altcoins.

Today, Bitcoin makes up about 40% of my total allocation to crypto.

That means altcoins make up 60% of my portfolio.

For each individual altcoin, I buy an equal amount in USD. I stake when I can, never take profits, and never rebalance. When I use some of my altcoins, I replace those tokens with the equivalent amount of USD.

For example, I put $100 into altcoin A, $100 into altcoin B, $100 into altcoin C, and so on. If I use $10 worth of their tokens, I buy $10 to replace them.

Maybe that means squeezing a little less “juice” out of the moonshots, but in this market, opportunities abound. Moonshots are everywhere. With so many opportunities, I can’t get salty about missing a few.

I already have some altcoins that delivered 10,000% gains. No need to get greedy.

Think about the long run. For every winner, those gains compound over time—if you let them. Each loss is capped at 100% (and you get a tax deduction).

You can shed the losers as you go.

Sometimes, you can sell those losers at huge profit. Sounds crazy, but XEM still trades at a higher price than I bought it for in 2019. It’s dead.

Another example?

Aragon Network Token (ANT). The project team lives on as a blockchain development company, but ANT no longer does anything. It’s dead. I sold it for a 500% gain. (It’s now sitting at an 800% gain since my first allocation.)

Strange market, this.

Look down before you look up

When Bitcoin goes up, everything else goes up. Large caps, small caps, micro caps, and everything in between.

This may make it seem like you can buy any altcoin and come out ahead. And that may be true, but some altcoins will not ever get back to their all-time highs from 2017 and 2021.

For example, Litecoin can go up 300% from today to the peak of this bull market and give you amazing returns—unheard of in any other market that people like you and I can access—and still not reach its previous all-time high.

Meanwhile, smaller cryptos will do far, far better.

When you look at altcoins from previous major market cycles, you can see most large-caps fell out of the top 30 as the market went up. Some died.

At the 2013 peak, the top 30 looked like this:

By the end of the 2017 mania, almost all had fallen off the list. Look:

By the end of 2020, only three remained in the top 30:

Only two of these remain in the top 30 today.

To make this comparison a little fairer, let’s start from November 2015, the end of the first great altcoin bear market. Surely, any altcoin that survived that bear market should dominate the next bull run, right?

Not really. Here are the top 30 that survived that first altcoin bear market:

Only eight stuck around for the 2017 bull market peak:

At the 2021 peak, only ETH, XRP, XLM, and LTC remained in the top 30. XLM and LTC have fallen off since then.

Over any random four-year period, you get a similar result. Even over a one-year timeframe—just look at my list of Top 100 Altcoins That Will Survive Through the Bull Market, which I posted that list in early 2023.

Already, 64 of the top 100 slid lower down the list—and 29 of them fell off completely! 

Not good odds.

Right now, you have billions of dollars worth of Bitcoin Cash holders thinking they’re going to get rich. I’m sure that’s how Feathercoin and NXT holders felt during previous altseasons.

From a pure investment perspective, you need to think carefully before you default into the common strategy of “mostly large caps like ETH, XRP, etc with a few small caps as speculations.”

They’re all speculations.

In a speculative market, why keep money into the ones with old tech, disintegrating developer communities, no hype, and no real-world usage? Today’s leaders came from the bottom. Tomorrow’s leaders will do the same.

Look down before you look up. Start with my altcoin reports.

Spread the wealth

What's in your wallet?

Are you still holding large-cap altcoins that have lost their developers and users, with tokens that have no mechanism for capturing value? Are you clinging to the hope that a project that had good intentions, an innovative design, and a great team four years ago will recover its lost glory? Or that your DeFi darling will come back to life?

Some of those projects will explode and go several multiples above their previous all-time highs. We’ll also see a boom in the value of new projects with new technology or new solutions to big problems.

But nobody today knows which ones will win tomorrow.

Of today’s 30,000 cryptos, probably 90-95% of altcoins are worthless, dead, or headed to the graveyard.

That means you have about 1,500-3,000 great, legit projects to choose from. Plenty of moonshots, lots of opportunities.

For that reason, I spread my investments around many projects, about 40 as of this post. I let the winners run and the losers go to zero. Then I write off the losers on my taxes and keep the winners as part of my long-term financial plan.

When I lose, I get back 20-35% of my investment. When I win, I keep the gains forever (and only pay taxes when I use or sell them).

During altseason, every altcoin booms. It doesn’t matter how big, small, used, useful, or useless it is.

Use altseason as an opportunity to clean out your portfolio. Shed big, old, and dead altcoins.

Let the smaller ones run.

Of course, you can never know how high they'll go during altseason or how hard they'll drop when altseason ends. They're small enough that it doesn't matter. They have lots of upside left. Ride them up and down.

If you're going to risk 100% loss on speculative financial technology, you want to give yourself the most upside when you win. That means stomaching the downturns, even at the risk of round-tripping. You can add to your allocations when prices go down.

On the flip side, if altseason ends sooner than everybody expects, you need to give yourself the best chance to catch those few tokens that survive, prosper, and deliver massive returns for years and decades. Those coins will make up for all the losers many times over.

Some people say you only need a handful of “good” alts.

I disagree. When altseason comes, it doesn't matter whether you have 5 or 50 altcoins. Your portfolio will go up.

What if we don't get that massive FOMO LAMBO MOON mania? What if you miss the peak? Are you that good or so lucky that you can find those very few altcoins that survive?

You're shooting yourself in the foot by limiting yourself to just a few. Don’t set limits.

Remember maths

When all else is equal, small altcoins will give you better returns for the risk you take—even if their bigger competitor seems unstoppable.

It’s all about the bang for your buck, not necessarily some fundamental advantage. Find the fastest horse.

For example, $1 billion into Ethereum will barely budge the price while $1 billion into XEM will send it to the moon (100x at least).

Does that mean you should buy a tiny shitcoin and pray for FOMO?

No.

Some top cryptos have momentum, development, strong networks, and a lot of room to run. Most small cryptos have none of that.

But some do. As long as that small project is strong, active, building, and its token solves a compelling problem in a way that captures value on the network, you can wager on its value going up—and every dollar into a small project will get you way bigger returns than you’d get with its larger competitor.

Can’t choose? Why not both!

Once developers deliver products and services for commercial and retail users, you can start to separate the wheat from the chaff.

That could take a little while.

Until we start getting traction and broad usage of cryptocurrencies, smart contracts, and blockchain-based products and services, you may want to play all sides. Every segment of the market has room for multiple winners. Just like almost every technological niche has more than one project that survives.

Pepsi is not the only soda maker. Aspirin is not the only pain reliever. Airbus is not the only plane maker.

You can build a lot of wealth from investments in their smaller competitors.

Make sure you have a few altcoins that play in the same space. For example, check Binance’s DeFi Index and drop some sats into each project listed. Or, visit the CoinGecko AI Page and throw some cash into 3-5 projects at random.

If one altcoin dies, you win with your others. If a few stagnate, you only need one to succeed and you’ll make up for the losers many times over.

Questions

Q: Why not take profits along the way?

Profit-taking means you gain less from your winners. At the end of the day, I want to use my government’s money to get more crypto, not use my crypto to get more of my government’s money.

Yes, I know some people use it to manage risk. I prefer to manage risk using the strategy above—put equal amounts of money into each altcoin, limit my overall portfolio exposure to any single token, and add to my positions when the market crashes.

The winners will move into my broader investment portfolio. The losers I can sell.

Every penny of profit-taking eats away at my future gains. I’m looking for home runs, not quick flips. You can’t get 10,000% returns if you sell half of your position after a 3x pump (even if it’s altseason).

Q: Can you share your personal portfolio?

I prefer to keep that to myself. It’s too easy for people to criticize and scrutinize without knowing the reason behind my holding those tokens.

For some, I've done deep research. For others, I saw them in a chat group or heard about them from a trusted source. At any time, I could sell them, they could die, or something else could happen. At any time, I could add new ones.

Trust that I stand behind all of my altcoin reports.

With 30,000 other cryptocurrencies to choose from, you will find plenty of great projects elsewhere, too.

Q: I’m up 500% on my altcoin. Should I sell?

That's up to you.

You'll feel bad when the price keeps going up, but where else are you going to be able to get a 500% return on your money? And I'm not talking about during altseason, I'm talking about ever.

Make sure you know what you want to get out of this market. What's your timeframe? Your goals? Your financial situation? How will you feel if you sell now and the price goes up another 10x? How will you feel if you keep holding and the price goes down 90%?

Once you're clear about that, these decisions get much easier.

You can't control what prices do. You can only control your decisions. Appreciate the circumstances and do what feels best for you. You will have plenty of opportunities to get those same results in the future.

I posted this video in April 2023, when gloom was all around. Today, the mood has changed a lot, but the message is just as relevant today as it was in April 2023.

Relax and enjoy the ride!