The Secret to Beating The Smart Money In a Crypto Winter (and BTC)

It’s an open secret: the main way to beat the “smart money” is to avoid holding cryptos while the winter persists.

In our case, the smart money is represented by three of the largest and most widely recognized crypto investment funds in the world: a16z, Binance Labs, and Coinbase Ventures.

Here is how our portfolios–which don’t just buy and hold cryptos–and theirs stack up over this year.

You can see how none of the smart money portfolios are beating the benchmark (BTC). It might be a little hard to conceptualize what’s going on with the numbers, so here’s an alternative presentation of most (not all) of that data.

As you can see, a16z, the darling of the crypto investing world, isn’t doing that well. In fact, just buying and holding Ethereum would have saved you more money.

Let’s look at two of the specific strategies we’ve been using to beat the benchmark (BTC) and all of the smart money. 

The first is the crypto maxi strategy. We explain the logic of this strategy as lesson 16 from The Art of the Bubble. This first image depicts how the crypto maxi strategy has performed starting with the 2018 crash (strategy in yellow).

And here is how the crypto maxi strategy has performed year to date (in yellow) vs BTC (the benchmark, in white)..

What’s interesting about this strategy is that it always holds cryptos. It never cycles out to hold stable coins. Even still, it’s massively outperforming BTC in this environment and all the smart money.

Our next strategy is the crash cost averaging strategy–first explained as part of the Absolute Beginner’s guide. This first image shows its performance since the beginning of the 2018 crash (in purple) vs the benchmark (BTC, in white).

Here is how that strategy, which does hold cash when the market is terrible, has been performing this year.

Basically, it’s flat for the year. But that’s still outperforming the benchmark by 60% and the smart money by about 70%.

In sum, this quick update shows you that pursuing a strategy that rotates out of cryptos when market conditions are terrible really does outperform. We have our own paid services for that here, but we invite you to learn the principles for free starting here (with Lesson 1).

Happy Trading!!.

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Disclaimer

This piece of content is provided for educational and entertainment purposes only. Robin Technologies and Analytics LLC is the firm that distributes 1.2 Labs products. The firm does not provide individually tailored investment advice and does not take a subscriber’s or anyone’s personal circumstances into consideration when discussing investments; nor is Robin Technologies and Analytics LLC registered as an investment adviser or broker-dealer in any jurisdiction.

You should expect no financial returns one way or another based on statements contained herein. These points hold equally for any statements that could be attributed to The Art of The Bubble or any related business entities or personnel operating in association with Robin Technologies and Analytics LLC.

If you decide to buy or invest in anything, then your returns and potential losses are your own. No statements about taxation are taxable advice and you are encouraged to consult your own tax professional. You are also encouraged to do your own due diligence before investing in anything.

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