🧘‍♂️ How To Win

He shares his simple success strategy.

Dear Meditators

🐦 If you’ve spent even a few minutes scrolling through Crypto Twitter, it’s likely that you will have come across an enigmatic avatar of a man in a dark grey hoodie AKA Devchart. 

🏆 From making his first $100K and beyond to being on of the earlier accounts to spot the change in sentiment and sell the top, Devchart shares his journey including why he is so transparent, how you can make your first $100k, and his advice to new traders.

✅ We share that journey today, as well as the usual crypto market news and education.

Read, enjoy and share with your network. Let’s all build wealth together.

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🏃‍♂️ In A Rush?

Here’s 5 things you need to know about the Crypto Markets:

• Ash Egan Launches VC Fund With $55M in ‘Inception Capital’ 💰
  Acrylic has raised $55 million from an array of funds and investors to bet on early-stage crypto projects.

• ‘Compliance is a journey,’ Says Binance CEO Amid Regulatory Scrutiny 👀
  The crypto industry has massively evolved since Binance’s launch four years ago, but it still needs more regulatory certainty, Binance’s CEO said.

• Israel’s New president will Receive an NFT of the Presidential Oath 📑
  The Israeli parliament has issued an NFT of the original draft of the presidential oath, which will be given to incoming President Isaac Herzog ahead of his inauguration. 

• Visa Plans to Build Out Its Cryptocurrency Ecosystem 🚀
  Financial services corporation Visa is set to build an ecosystem that will make crypto more accessible.

• Goldman Sachs Could See ETH Become Dominant Store of Value 💎
  Goldman Sachs says the popularity of Ethereum’s smart contracts means it could overtake Bitcoin as the number one crypto by market cap soon.

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🎯 How to Make Your First $100k with Devchart

1️⃣ How Devchart Sold the Top

For this bull market, Devchart attributes selling the top to a combination of luck and recognizing that the market was becoming overextended. He mentions how he noticed that when price would come up to resistance at, for example $60k, it would soon retrace only to break the resistance up to $63k, for example, before it retraced again all the way back to $48k. After seeing these wicks along hyper bullish Crypto Twitter sentiment which showed many were confident on the supercycle along with altcoins pumping parabolically, it made him “slightly uncomfortable.” As soon as it dropped below $55k, he became confident there was a drop coming and he decided to take profit on about 80% of his holdings.

2️⃣ Spotting a Change in Sentiment

Devchart mentions how he is a “pessimistic trader” which means he looks at the worst case scenario first. He mentions how the sentiment in 2021 reminded him of what it looked like in February and March of 2018, when big money was saying that Bitcoin would trade at $40k by June and would eventually go to $100k or $200k by the end of 2018. Anybody who was around in 2018 remembers that it was this time period that marked the cycle top. This time around, Devchart mentions how it seemed retail traders expected the resistance to break whilst large firms were being publically vocal about a supercycle.

3️⃣ How Devchart Made His First $100K

“The first $100k that I made in the market was due to pure luck. It was also due to me being early.” Devchart joined the crypto space in early 2017 and initially began buying Bitcoin and Ethereum. Around September of 2017, however, he started buying a variety of altcoins that were the talk of the town on Crypto Facebook. Due to Bitcoin, Ethereum, and of course his portfolio of altcoins pumping parabolically soon thereafter, his profits surged past $100k. He admits that during this period it’s easy to feel like “you’re a genius” and that the next step is hitting the seven figure mark. What Devchart underplays, however, is that he managed to secure and keep profits before the parabolic pump took a harsh turn to the downside. 

By the end of 2018, Devchart began trading (rather than buying and holding) with small amounts. It took him about 7 months to grow “a few thousand dollars” into $100k trading altcoins on spot, not leverage. He has tested leverage and decided that, although he could hypothetically have grown the account to $100k+ in a few weeks, the slow process actually helped him understand a few things.

4️⃣ A Learning Experience

Devchart explains how one of the most underrated lessons is the “power of compounding profits.” He mentions how he believes that if most people truly understood the power of compounding profits, they wouldn’t bother with 50x or 100x leverage. Another key lesson Devchart learned was “learning how to lose small.” The crypto markets afford traders and investors the opportunity to make life changing amounts of money. The crypto markets also, however, are notorious for taking this life-changing money away if you’re not aware of how to keep your gains. Devchart explains how “losing should not affect your overall trading” because topics like invalidation zones and stop losses, for example, allow you to continuously grow your portfolio without suffering massive drawdowns.

5️⃣ Strategies for Anyone to Make $100k

If Devchart had to start from $0 and make $100k as quickly as possible, how would he do so? If you’re a new investor, he does not recommend trying to make your first $100k using leverage. For new traders and investors who are willing to exercise their patience and want to truly build wealth not just today but for the long term, a great way of making your first $100k is by trading altcoins. Trying to grow $1k to $100k using only spot is challenging, but by going through this process you will learn things about yourself and your trading systems that will build a complete foundation to help you survive in this game long term. 

6️⃣ Devchart’s Advice to New Traders

Although many people may consider this piece of advice controversial, Devchart explains how people should rethink the idea of HODL. When you think of the word HODL, people will always default to the example “If you bought BTC at X price during Y time, you would still be in profit today.” What people fail to realize however is that the majority of investors on Twitter, TikTok, Reddit, etc, are not buying Bitcoin or Ethereum. They are looking for the next 100x or 1000x altcoin, especially when you have a small portfolio or are constantly surrounded by stories of coin X or coin Y going parabolic. Everyone is looking for that magic coin, which leads new people to buy obscure low cap coins. During a bull market this can be very profitable. When markets downtrend, however, it is these coins that will crash 90 to 99% first. So what’s his advice? HODLing is fine, but learn to understand trends and always set a profit target and invalidation point.

Many concepts and terms were referenced in this conversation with Kaleo. Here are further resources for those who want to learn more about: 

• Finding Your Trading Style

• Technical Analysis

• Risk Management

• Trading Psychology

• To hear more from Devchart, check out our podcast #82 How to Make Your First $100k with Devchart

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🚀 BTC Mining Profits Are Soaring

Source: Blockchain.com

Bitcoin miner revenue jumped after the network saw its biggest ever difficulty drop, data shows. According to figures from monitoring resource Blockchain.com, daily revenues have surged by over 50%.

“We have a very interesting dynamic where approximately 50% of the hash power is currently offline and incurring a great number of costs due to logistics and just simply not hashing, having hardware that’s not currently working, and the other 50% has essentially seen half their competition drop off the network” – Glassnode

For active miners, profitability has reverted to around the levels seen when BTC/USD traded at $55,000–$60,000. Part of an uptrend that continues despite the drop in price, which has also reached over 50%. Perhaps this goes to show that there is always opportunity, if you know where to look.

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🎲 Yes or No? – The Wrong Question.

Does alien life exist? Will my business succeed? Will Ethereum hit all time highs again this year? These are all questions that don’t have clear answers. Answering yes or no simply would not be appropriate given our lack of information. So how can we approach these questions in a more suitable way? The key is not to think in such a binary manner but instead, to think about probabilities. This way of thinking is often referred to as probabilistic thinking.

To leverage an example, should you prepare for an alien invasion? 

• There either will be an invasion, or there won’t and we will not know whether it will happen in our lifetimes until it does or we reach the end of our lives. 

• However, even if we believe in aliens, how many alien invasions have there been to date? None. 

• So whilst we do not know whether aliens will invade, it simply doesn’t make sense to prepare for it.

The importance of this is stressed when we examine some of our biases. First is our systematic overconfidence that we actually know the truth which can lead to over-precision in our judgements1. When we view these biases in the context of the Illusion of Control2 – that we believe we have far greater impact on final outcomes than we actually do – we see that humans are prone to making overly precise, binary decisions that we think will result in a specific outcome with utter confidence! In reality this is rarely the case.

Developing a probabilistic mindset is not easy. Firstly we must understand basic concepts of probability. If you aren’t familiar with these, check out Khan Academy’s introduction. Then we must consciously ask ourselves not will this event occur but instead, how likely is this event to occur3. We can use prior data, such as how many times has this event occurred before, in an attempt to help inform the probability; however sometimes this information is not available and we have to use our subjective nature to guide the process. After establishing our initial framework we can then use bayesian updating to update our probabilities when receiving new information. 

To improve our ability to make decisions even further we are then able to attach outcomes to our probabilities to calculate what is known as expected value. As Warren Buffet summarised: “Take the probability of loss times the amount of possible loss from the probability of gain times the amount of possible gain. That is what we’re trying to do. It’s imperfect, but that’s what it’s all about”. If you want a more detailed explanation, check out Sam Trabbuco of Alameda Research’s breakdown.

Whether it’s trading, running a business or deciding whether we should prepare for an alien invasion, probabilistic thinking is an essential part of making good decisions in an uncertain world. Get to grips with the basic principles of probability, ask yourself how likely an outcome actually is and stop answering simply yes or no.

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Not financial or tax advice. The content in this newsletter is for informational purposes only. Nothing in this email is intended to serve as financial advice. We are not financial advisors. Every investment and trading move involves risk. Do your own research when making a decision. See our important security disclaimers here. 

Disclosure. Some of the links we’ve included are affiliate, they give you rewards and discounts and earn us a commission. Additionally, the Market Meditator writers hold crypto assets. See our investment disclosures here.