🪴 Brain

My Crypto Strategy

6 min read

My Crypto Strategy

🗒️ Description

Crypto is a large part of my portfolio — the high-volatility, convex engine of my overall plan (My Investment Strategy). This note is the dedicated playbook for that sleeve: how I invest in it, not whether I should.

The strategy is cycle-based. It rests on Bitcoin’s repeating ~4-year halving cycle and a discipline very close to Phil Konieczny’s: accumulate patiently through the bear, hold through the bull, and — the part I failed at last time — take profit into euphoria. It is built deliberately as the antidote to the specific mistakes I made in 2021–22 (What mistakes I made on the crypto market in 2021-2022).

One sentence: BTC and ETH only, accumulate in the cold, sell into the heat, and never bet on something I can’t explain.

🔗 Links

🧩 What I Learned the Hard Way (2021–22)

The whole strategy is a reaction to documented errors (full list: What mistakes I made on the crypto market in 2021-2022):

  • Didn’t take profit → the cardinal sin. A 4-year cycle gives back most paper gains if you don’t sell. Fix: a written take-profit ladder.
  • FOMO & chased influencer calls → bought late, on emotion. Fix: DCA on a schedule, size from a plan, ignore the hype phase.
  • Owned things I didn’t understand (Luna, late parachains, random projects) → Fix: BTC and ETH only. If I can’t explain the asset in two sentences, I don’t own it (Cognitive Biases in Investing — familiarity vs real understanding).
  • What actually worked: diversifying custody and moving BTC to a Ledger. Keep doing that.

🧩 The Cycle I Trade

Bitcoin’s halving (~every 4 years) drives a repeatable four-phase rhythm — mechanics, dates, and historical stats are in Bitcoin Cyclicality. My behavior per phase:

PhaseWhat it feels likeWhat I do
Accumulation (post-crash, despair)Nobody cares, price flat & lowDCA hardest here. Best risk/reward. Buy BTC/ETH mechanically.
Markup (bull, hope→belief)Price rising, news turning goodHold. Keep base DCA. Do not add leverage or chase.
Distribution / Euphoria (mania)“This time is different”, everyone’s a geniusExecute the take-profit ladder. Sell into strength, in tranches. This is the phase I failed last cycle.
Markdown (bear, denial→capitulation)−70/−80% drawdowns, “crypto is dead”Don’t panic-sell. Hold the core, redeploy taken profit back into accumulation. Loop restarts.

The phases are reliable; the timing is not. Indicators (MVRV-Z, Pi Cycle, 200-week MA, Fear & Greed) are a compass for which phase I’m in, never a clock — same discipline as the equities compass. I never try to nail the exact top.

🧩 The Rules — What I Do

  1. BTC and ETH only. The two assets I actually understand. Everything else is a pass, however good the story.
  2. DCA through the bear and accumulation phase. Fixed amount, fixed schedule, emotion-free — the opposite of my FOMO buying last cycle.
  3. Take profit by a written ladder (below), into the distribution/euphoria phase. The rule sells, not my conviction.
  4. Size the sleeve so a −80% drawdown is survivable. Crypto will draw down 70–85% in a bear (Bitcoin Cyclicality) — that has to be a bad year, not a wiped-out year. Position size comes from My Investment Strategy.
  5. Cold storage for the core. Long-term holdings on a hardware wallet (Ledger), not left on exchanges.
  6. Treat taken profit as portfolio cash, not “house money” to gamble (Cognitive Biases in Investing — house-money effect). It either funds the next accumulation or leaves crypto entirely.

🧩 The Anti-Rules — What I Never Do

  • Never round-trip a full cycle without taking profit. The 2021–22 lesson, in one line.
  • Never buy alts I can’t explain. No Luna, no “next 100x”, no late-cycle narratives.
  • Never use leverage. Liquidation turns a survivable drawdown into a zero.
  • Never chase a green candle or an influencer call. Schedule and plan decide entries, not FOMO.
  • Never try to time the precise top or bottom. I scale out and scale in over ranges, in tranches.
  • Never confuse a bull market for skill (Investing Psychology — overconfidence). The cycle did the work.

🧩 Take-Profit Plan

The single most important fix. A pre-committed ladder so I sell into strength mechanically, while it’s emotionally hardest:

  • Scale out in tranches across the distribution phase (e.g. sell a fixed % of the position at successive targets / on successive indicator signals), rather than one all-or-nothing exit.
  • Bias toward keeping a BTC core through the cycle (Phil Konieczny’s “return to Bitcoin”), trimming the rest.
  • Decide in calm what % I’m willing to ride down, and route taken profit to cash/ballast in My Investment Strategy.
  • replace Define the exact ladder — trigger levels (price targets and/or MVRV-Z / Pi-Cycle signals) and trim sizes. Until this is written, the strategy isn’t operational.

🧩 Security & Custody

  • Long-term BTC/ETH on a hardware wallet (Ledger) — keys offline.
  • Spread custody (the one thing I got right in 2021–22): not everything on a single exchange.
  • Exchange only for active buying/selling; sweep to cold storage after.
  • todo Seed-phrase backup & inheritance plan — make sure the family can recover holdings (ties to Die with Zero’s “give while alive” point).

🧩 Open Decisions

  • replace Exact take-profit ladder (the priority — see above).
  • replace Target crypto weight as a % of total portfolio, and the max I’ll let it grow to before trimming.
  • todo BTC vs ETH split — decide a target ratio and whether to rebalance between them.
  • todo Where taken profit goes — cash cushion, dividend ETFs, or back into the next accumulation. Tie to My Investment Strategy.
  • todo Stablecoin / off-ramp plan for the distribution phase — how I actually hold proceeds without round-tripping back in on FOMO.

📖 Further reading/watching

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