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In today’s newsletter:
🔎My crypto exit plan
📊On-chain alpha
😂Crypto meme of the week
🗞️The latest DeFi news
🔎My crypto exit plan
The past few weeks have been incredible for crypto.
And I believe that we still have a few great months ahead of us.
But if you won’t take profits before it is too late, it won’t matter how much your portfolio goes up during the next major market rally.
The harsh reality is that 90% of the people who made life-changing gains during the past bull cycles eventually lost everything in the bear market.
In order to avoid ending up like them, you need a proper exit plan.
Here’s how I’m thinking about taking profits and a few tips to maximize your gains based on my past experience👇
Set your exit targets based on your conviction
My portfolio is currently split into 2 parts:
long-term high-conviction bets
short-term narrative based bets
A classic advice that many people share on X is to take profits after every 2x that a token you hold does.
While this is a good idea for short-term bets that you take only because of a catalyst or a current hot narrative, I wouldn’t do this with my long-term bags.
For context, in my case, I started taking profits on my SOL position only after it did a 7x from my entry price as I had very high conviction in the project.
Some tokens will do a 100x from the 2022 bear market lows, so ideally you don’t want to sell the tokens you’re the most bullish on after only a 2x.
I’d say that this is a decent take-profit strategy in general:
Create a take-profit plan for every single token you buy
Set custom exit targets for all tokens you hold based on your conviction (the more you believe in a project, the more you postpone taking profits)
Take profits before every major catalyst - as most hyped launches / upcoming announcements (e.g. a big new product launch for a project whose token you hold) tend to end up being sell-the-news events
Use an inverse DCA strategy for selling your long-term bags (this involves taking profits over time rather than selling all at the same time)
Sell a % of all your portfolio holdings every time when you start seeing multiple top signals at once (as you don’t want to be caught off guard by the cycle top)
This time is not different
So far, this bull market has been very similar to the last two ones.
This makes me think that it’s a good idea to also adapt your exit strategy based on what happened in the past.
The average bull cycle:
starts ~170 days after the Bitcoin Halving (the last Halving was on April 19 2024)
ends ~480 days after the Bitcoin Halving
includes a major BTC correction that happens in the summer of the next year after the Bitcoin Halving (so BTC might see a big dip at the end of May 2025)
I believe that things will play out in a similar way this cycle as well.
The only big thing that happened differently in this bull run is that BTC made a new ATH before the Halving, which is unusual.
Because of this, I’m thinking of taking profits aggressively in Q1 and Q2 2025 as there’s a chance that this bull market will be a bit shorter.
I might be wrong and sell too early, but in my opinion it’s way better to take profits too early than too late.
If you make life-changing money, sell and don't look back
If at some point this cycle your portfolio reaches a life-changing number that you could never dream of, make sure you press that sell bottom.
There are hundreds of stories of people who made way more money than they thought that it was possible, but eventually lost it all because of greed.
You don’t want to be that guy. Unrealized profits aren’t profits.
If your gains are large enough to secure your future, there’s no reason not to sell.
I hope you all reach your goals this bull run🫡
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On-chain Alpha🔎
Spot Ethereum ETFs hit a new ATH in daily inflows
Regardless of whether you hold ETH or not, the ETH price action is something that I think everyone should watch closely.
I’m saying this because historically, the best part of the altseason starts only after ETH starts pumping and heavily outperforming BTC.
So far this cycle, ETH hasn’t managed to steal the spotlight from BTC.
However, the recent surge in the net flows seen by the spot Ethereum ETFs might be a sign that the capital is slowly starting to rotate into altcoins.
Crypto Meme😂
The latest developments in DeFi
Avalanche raised $250M in a new funding round
Russia is considering creating a National Strategic Bitcoin Reserve
Frax Finance announced the rebranding of FXS to FRAX and the creation of its own crypto strategic reserve
Particle Network released UniversalX, an on-chain platform that enables trading any token on any chain, without bridging
Merchant Moe, the #1 native DEX on Mantle, announced a 1M $MNT incentive program for MOE stakers. The rewards will be distributed to MOE stakers over the next 2 months
Chintai introduced DNA Deal Desk, a novel on-chain private investment platform. The goal is to make private investing easy by automating the compliance work and creating a blockchain-based secondary market
LayerZero will hold a referendum on Dec. 19 to decide on activating the fee switch
Aerodrome released AERO Fed, allowing veAERO voters to guide the monetary policy for Aerodrome
Jupiter DAO approved a $860M "Jupuary" airdrop. The airdrop will be distributed in Jan. 2025
Balancer has launched Balancer V3, which introduces 100% Boosted Pools, Custom Hooks, and an automated concentrated liquidity management vault
Mantle announced $EIGEN and $ENA rewards for MNT Stakers. MNT stakers can choose to get rewards in the form of 3 tokens: EIGEN, ENA, or MNT
Mode introduced Synth - a Bittensor Subnet for Financial Forecasting
Kamino Finance introduced Kamino Swap, an intents-based exchange that comes with zero slippage, zero MEV, and zero platform fees
Movement released Movement Network, the first Move-base Ethereum L2 network, and its token MOVE
That’s all for this week!
Until next time,
The DeFi Investor
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