Welcome to Week 3 of the series “High Conviction Bets”, where your trusty analyst 0xKyle (me) updates you with trade ideas and portfolio updates. Remember - at the end of the day, trading is a very individual sport, and you should always form your own opinions instead of fully piggybacking off others. Every coin in here will be sold to USD at the end of the day, so don’t go marrying the bag. That being said, let’s dive in.
GM. I hope everyone’s doing well. As we head into December and Christmas season (the best time of the year), I’d like to congratulate all of you who have remained here grinding throughout the bear market.
Like a kid unwrapping his present on Christmas, I can barely contain my excitement for the upcoming year - with the recent developments this week, I can safely say that the future of crypto has never been brighter.
To the world, crypto has always seemed like a murky lake. You don’t want to touch it, and you most definitely don’t want to step in it. With CZ’s departure, our lake is slowly getting cleaner.
Sure, you may argue that CZ didn’t do anything wrong. It doesn’t matter - it's a symbolic step towards a more mature and responsible crypto landscape. CZ’s departure is significant for trad-fi and for crypto as a whole because it shows that we’re becoming a “legitimate industry” - that we’re finally cleaning up after ourselves.
With each positive shift, the once murky perception of crypto is gradually transforming into crystal-clear waters, inviting more participants into the fold. The narrative is changing, and we're no longer the outsiders pushing boundaries; we're becoming the pioneers of a financial revolution.
With that being said, onwards and upwards (to the right).
Market Read 📊
In the past few weeks, I’ve constantly warned that rate cuts and ETFs are sell the news events, all whilst CT was screaming “WHY ARE YOU NOT BUYING INTO THE MOST BULLISH EVENT OF YOUR LIVES?!”
And likewise, yesterday my feed was full of “DOJ OVERHANG IS GONE, BTFD!”, and people posting the following chart:
And yes, I somewhat agree with the chart above. My position remains the same - it’s stupid to be a HTF bear on crypto. You had the whole damn year to be a dirty bera - as such, I advocate for the “spot long, don’t get liquidated” portfolio. But on the LTFs, I believed that we were in a position of disbelief a few weeks ago - and we did shortly see a flush.
Now as time marches on, my opinion is changing as well. What worries me is that we might not get that post-ETF sell-off anymore. Two weeks ago, the balance of probabilities of ETF sell-off versus pump was 70-30 in my books. Now, the numbers are more like 60-40. Why?
“Sell the news on ETF” was not consensus two weeks ago. Twitter was hyping up how we would pump throughout December into January into ETF ruling into 69k. An invalidation of my bearish position would be a flush even before the ETF ruling, to convince me that “sell the news is priced in”.
Whatever the case, one thing’s for sure - I don’t think BTC breaks 38k in December - I think we just chop around. In fact, my view can be surmised in the following tweet:
While I’m not as confident as ChiefingZa in a ETH related run, it would bode well for my Lido bags. Now, let’s move on.
Current Portfolio 💼
Some changes were made in my portfolio structure.
I cut my SOL position by half - the reason being, I looked back at my original thesis and realised that my thesis was around 50% done - at my time of entry, I believed that the price of SOL did not reflect fair value - but now, at 55, I can say that it doesn’t seem clear to me why it will continue doing well after such a major repricing. Don’t get me wrong - long term, bullish on SOL. But I have to keep in mind that in the long term, everything goes up. And I rather bet on what goes up more - i.e TAO
TAO position increased by a boatload. I first heard of this coin at 40, didn’t do DD until 100, and only aped at around 150-180. But even so, I think the upside for this coin is there.
LDO - ETH’s performance continues to disappoint, so I continue buying Lido because I love inflicting pain on myself. Just kidding. I believe that the ETHBTC bounce will come soon, and Lido is fundamentally undervalued in that regard. The LST trade is one that has not been shown love despite all past narratives re-surfacing - I think it’s a matter of time.
Rollbit. Oh man, what am I going to do with this one? I think that it was a mistake on my part sizing so heavily into Rollbit - I had to cut 6% out of my portfolio.
MMX - now this is something that I’m trying to size in on. It’s an exchange in Abu Dhabi, who’s backed by some very powerful companies - e.g Pheonix Group, whose round was over-subscribed by 33x in their recent IPO.
Trades 🖥️
Perps
Perps-wise, I’m not looking to trade much. I’m in capital preservation mode right now - Compared to 3 weeks ago, we’re in vastly different seas. Choppy is the name of the game - today’s news about Sam Altman returning to OpenAI was retraced. In my opinion, this is a huge indicator of the type of market we’re in.
On that note, I’ve also gone back to calculate how much money I’ve lost taking positions I didn’t need to. It sounds stupid, but I'd really advise you to do the same - looking back, I think that 99% of my losing trades were simply positions I “aped because I didn’t want to be left out”.
I’m quite excited to see how far I’ve come as a trader, tbh. It may have taken me 1 year and a bear market to learn these simple lessons, but… how do I put it? Even if I told you, at the start of your trading journey: “Less is more.” You wouldn’t believe me.
Just like books - sometimes, the information is there, but you’re just not mature enough to accept it. Very sappy stuff, but truly - I’m quite bullish on my growth. Onwards and upwards.
On-Chain
With over 70 million USD locked up on Blast, the newest Layer 2 going around, on-chain coins have been slowly bleeding. I’d say that I’m eyeing certain tokens, such as:
PRIME: I believe Gamefi will see a re-run next cycle. While you can argue that 20-21 was huge for Gamefi already, I think that many of the backed games are now coming up with their products, and this will definitely cause an attention shift. Prime is my leading contender for this sector, and I believe it’ll continue being the “gaming index coin”.
TAO: I’m seriously considering denominating my portfolio in TAO - all profits go back to TAO. You have no idea how bullish I am on this.
MMX: I may be too late to continue buying. It’s up 30% since I started sizing in, and I haven’t gotten a size I’m comfortable with. AAAAA.
Well, that about concludes my weekly update. Instead of checking price everyday, I’m also currently learning the piano - in case any of you need hobby recommendations as well, here’s a list. Strategy remains the same - chill in spot, wait for bulla in Jan / Q2 2024, and don’t trade impulsively.
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