Cooper Turley is an investor and advisor who was on Fortune’s 50 most influential people in NFTs list.
When trading cryptocurrency, he recommends ‘buying the rumor, selling the hype.’
Turley says it’s okay to sell tokens when you’re up big even if it goes against your plan.
If you’re new to crypto, it’s hard to know where to start.
Whether it’s an overwhelming amount of information, an inability to find credible sources, or a general feeling of being lost — this guide looks to help you avoid some of the pitfalls I went through when I got started 5 years ago.
Since then, I’ve been lucky enough to find success in crypto. I co-founded a project called Friends with Benefits — a tokenized community which recently raised $10M led by a16z. I’m a venture partner for a seed-stage investment fund called Variant . I’ve helped launch a dozen plus successful tokens, including ENS ($ENS), SuperRare ($RARE), Gitcoin ($GTC) and Audius ($AUDIO) — all of which in aggregate are worth more than $10 billion at today’s prices.
But, before all that I was a trader. I’ve traded hundreds of tokens — and learned about the trials and tribulations of everything from Coinbase to Uniswap and OpenSea.
Through my journey, I’ve found that the best way to learn is through action. While these tips will get you halfway there, expect to put a meaningful amount of time, effort and energy into becoming a part of the crypto community before you find any significant success.
Detailed below are a series of ways to better allocate your capital in web3 — or the growing ecosystem of crypto-based products, services and protocols. These are tactics I learned throughout many years as a trader, contributor, collector and investor.
If you find them helpful, follow me on Twitter to keep up with the latest and greatest projects in web3. 1. Make convicted bets
The single biggest problem I had when trading was holding too many tokens.
Tokens are digital assets. Each crypto project has its own token, allowing you to invest in it’s upside,
In a world where there are thousands of tokens that exist, and hundreds launching every week — it’s easy to get spread thin.
As a good rule of thumb, never hold any tokens that consist of less than 5% of your total crypto portfolio. For example, if you have a $10,000 portfolio, and you hold $100 of a token (representing 1% of your holdings), that token will need to go up 10,000% to meaningfully impact your investment.
Instead, having conviction by only allocating positions with over 5% of your portfolio gives you a much higher likelihood of that token making a substantial difference.
Ask yourself whether you see yourself holding this token in 5 years from now. If the answer is no, don’t buy it. For most new traders, the best portfolio is as simple as holding BTC, ETH and one other token of choice. 2. Avoid token influencers
When learning about crypto, most people (myself included) will first see videos or tweets from those who are the loudest on media platforms like YouTube and Twitter.
It’s best not to allocate mindshare to anyone whose sole job is to share new tokens. Most of these people are full of shit, and chances are you will lose money more times than you make it.
In the current market, most tokens are going up. This does not make your favorite influencer a savant, it’s more likely that they already took a position or are being paid to talk about it.To the degree you can, look to avoid content which recommends that you buy any specific token, and instead rely on your own intuition and general community sentiment to make informed decisions on your purchases. Here’s my list of who to follow in web3. 3. Don’t chase the pump It’s easy to follow the crowd.With crypto, tokens appreciate faster than anything you’ve ever seen. A 100%+ gain in a day is pretty common, but for most new investors it can be shocking.If you find yourself watching a token which has appreciated by more than 300% in a week, be very careful about what you’re entering into. While there may be short-term profits to be had, most waves in crypto last a few days max.This means that if you buy a token by the time everyone is already talking about it, chances are you’re on the tail end of the upside opportunity.As a good rule of thumb — buy the rumor, sell the hype. 4. […]
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