I will 100% admit that I did not see the dramatic Algorand price increase coming.
The price as I write this is sitting above 26 cents, but Friday night we touched awfully close to 33 cents.
That’s right, we hit the “Scaramucci level” (a phrase I coined based on Anthony Scaramucci’s call last year of a 30-cent top for Algorand, which you can see below):
Inevitably, someone in the YouTube comments pointed the pullback out. “Dumping again today.”
To which I replied, “Yup, that’s how it works.”
What do I mean by that? There is a kind of myopic viewpoint you see in crypto that you don’t see in other investing circles. And I think that’s because, for a lot of people in the crypto space, it’s the only investment they hold.
While it’s nice to get a pump right now - the returns from my liquidity pools has been stellar - it’s important to realize that we’re still very early in the investment cycle.
So with that, I want to share a few words of advice for those new to investing:
Stay patient: Altcoins last bull run took off mostly starting in February. In fact, the real run didn’t happen until September. And when it rains, it really pours. It won’t seem real. Until then, stay patient, and have a plan to take profit. Which leads to my next point…
Take profits: Currently every bit of Bitcoin I own is profit. It was up to close to 300% until the recent pullback which I would guess shaved 10% off of that. That’s because I take profit along the way. At this point, I have taken out everything I put in, and what’s left in BTC is pure profit (NEAR too, and I’m close on Solana). Now, note, that doesn’t mean I sell everything off. I sell a small percentage as it ramps up. This is called de-risking - during a bull run, it’s a great idea to start locking in profits because you will never call the top, and you'll question whether every pullback is the end, or if it’s just a pullback. I set price targets based on my rough estimation of how much I think the coin will grow. Usually my first is around 2x, and I pull out 10-15%. That leaves enough surface area to benefit from future growth.
You probably should avoid lane-changing: When you see another coin has been running and you missed it, while the coins you hold are struggling, it can be tempting to switch them. Generally speaking, I would avoid this. Looking back at the last altseason, a lot of coins popped off in February 2021, but others went earlier, and some didn’t until April. I think of the opening scene of Office Space, in which the character keeps changing lanes only to watch the one he just left start moving. Better to have bought a good-sized basket of crypto - 12 is the optimal range of any asset class to have enough diversity to manage downside risk - and enjoy the gains. Some will do ok-ish, some will go great, and if you’re lucky 1-2 of them will be mind-blowing.
As I type this, Algorand is already starting to go the right direction. There will be more pullbacks. Best to chill, keep the bigger picture in mind and hang on, because altseason hasn’t even truly begun yet.
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