Today I wanted to talk about something a lot of people tend to forget: greed and profit-taking. The world of crypto is densely populated with optimists, myself included, however, we should not lose touch with reality and acknowledge that sometimes things can go wrong.

I came into the world of crypto from a finance background. That previous education came with a lot of advantages and drawbacks when it came to correctly judging risk VS reward in crypto. Nonetheless, 2020, as well as 2021, has seen unprecedented growth, not only in crypto but also in the stock market. I do not want to go into the macroeconomic reasoning behind those returns but I think we need to keep in mind that the markets can go down (yes really).

I believe that most people are aware that a bear market is coming at one point, although nobody seems to know when. Crypto soothsayers have been calling for an end of the bull run since May 2021, but have yet to be correct. However, this leads me to believe that there is also a good amount of scared money in the market.

As you can see from the chart above, the average “age” of a Bitcoin holder has been on the decline recently, seemingly indicating: long-term whales are not selling anymore which seems to coincide with the growing number of addresses with over 100k, and that current price action is rather dominated by short-term holders and traders.

So we know a lot of people seem to be preparing for a correction, but don’t want to miss out on any last-minute gains. At this point, you need to ask yourself: what is my goal? Is it to squeeze as much profit out of the crypto markets before the music stops or is it to build long-term wealth. If your answer was the latter then you should be taking profits, which coincidentally is the next part of this article.

When I talk about taking profits, some of you might think that I am talking about selling your crypto back into fiat money but that’s not the whole truth. Certainly, it is a way to take profits, but it’s far from being the only one. The following list shows different ways of taking profits from least risky to most risky. Be conscious that more risk also opens you up to more gain.

• Selling back into fiat is your safest option. By that I mean going through a Centralised exchange, selling your crypto into fiat money, and transferring it onto your bank. However, you are sacrificing a lot of return on that money since most banks offer sub 1% interest on your deposits.

• Farming stablecoins on Anchor yields an amazing risk/reward ratio and is a very popular option. You’re able to gain roughly 19-20% APY on your UST. The main downside to this is that anchor is on LUNA, which might be a chain you don’t use.

• Active stablecoin farming is the next logical step. Instead of putting it into a pool with a lot of TVL and 20-25% APY, you instead actively search for pools with APY’s higher than 50%. The trade-off for the increased returns is that you’ll have to move your money every few months as well as invest in more unproven protocols.

• Taking profits into ETH and BTC can be an option for long-term investors. Since those coins still dictate where the market is headed, they can almost be considered like index funds. However, it should be noted that even if ETH and BTC are less volatile than smaller caps projects, they still open you up to considerable risk.

• Leveraging long-term positions and borrowing against them on protocols like AAVE or Mai Finance allows you to gain more out of your long-term positions. I usually recommend not borrowing over 60% of your collateral and using the money to just farm yields on stablecoins.

• Buying a miner can be very risky but also very profitable, especially in the long term, especially during a bear market. Now I am not talking about traditional PoW mining (like BTC or ETH), but rather newer ways like Helium, Planetwatch, Akash etc. These will allow you to mine and accumulate coins over a bear market and sell during the next cycle.

Over the past month and a half my DeFi portfolio has wildly outperformed BTC as well as ETH. I believe the reason for that is that I always had a sound profit-taking strategy. If you look at the image below, specifically the Allocation over Time chart, you’ll notice that the amount of stablecoins I’m holding (the red area) shrinks during dips and grows during upswings.

My end goal is to have a significant amount of money in stablecoin farms, which would allow me to generate enough passive interest to focus on doing the things I love. So don’t ever forget to not be too greedy and to take profits.

Today I wanted to talk about something a lot of people tend to forget: greed and profit-taking. The world of crypto is densely populated with optimists, myself included, however, we should not lose touch with reality and acknowledge that sometimes things can go wrong.

I came into the world of crypto from a finance background. That previous education came with a lot of advantages and drawbacks when it came to correctly judging risk VS reward in crypto. Nonetheless, 2020, as well as 2021, has seen unprecedented growth, not only in crypto but also in the stock market. I do not want to go into the macroeconomic reasoning behind those returns but I think we need to keep in mind that the markets can go down (yes really).

I believe that most people are aware that a bear market is coming at one point, although nobody seems to know when. Crypto soothsayers have been calling for an end of the bull run since May 2021, but have yet to be correct. However, this leads me to believe that there is also a good amount of scared money in the market.

As you can see from the chart above, the average “age” of a Bitcoin holder has been on the decline recently, seemingly indicating: long-term whales are not selling anymore which seems to coincide with the growing number of addresses with over 100k, and that current price action is rather dominated by short-term holders and traders.

So we know a lot of people seem to be preparing for a correction, but don’t want to miss out on any last-minute gains. At this point, you need to ask yourself: what is my goal? Is it to squeeze as much profit out of the crypto markets before the music stops or is it to build long-term wealth. If your answer was the latter then you should be taking profits, which coincidentally is the next part of this article.

When I talk about taking profits, some of you might think that I am talking about selling your crypto back into fiat money but that’s not the whole truth. Certainly, it is a way to take profits, but it’s far from being the only one. The following list shows different ways of taking profits from least risky to most risky. Be conscious that more risk also opens you up to more gain.

• Selling back into fiat is your safest option. By that I mean going through a Centralised exchange, selling your crypto into fiat money, and transferring it onto your bank. However, you are sacrificing a lot of return on that money since most banks offer sub 1% interest on your deposits.

• Farming stablecoins on Anchor yields an amazing risk/reward ratio and is a very popular option. You’re able to gain roughly 19-20% APY on your UST. The main downside to this is that anchor is on LUNA, which might be a chain you don’t use.

• Active stablecoin farming is the next logical step. Instead of putting it into a pool with a lot of TVL and 20-25% APY, you instead actively search for pools with APY’s higher than 50%. The trade-off for the increased returns is that you’ll have to move your money every few months as well as invest in more unproven protocols.

• Taking profits into ETH and BTC can be an option for long-term investors. Since those coins still dictate where the market is headed, they can almost be considered like index funds. However, it should be noted that even if ETH and BTC are less volatile than smaller caps projects, they still open you up to considerable risk.

• Leveraging long-term positions and borrowing against them on protocols like AAVE or Mai Finance allows you to gain more out of your long-term positions. I usually recommend not borrowing over 60% of your collateral and using the money to just farm yields on stablecoins.

• Buying a miner can be very risky but also very profitable, especially in the long term, especially during a bear market. Now I am not talking about traditional PoW mining (like BTC or ETH), but rather newer ways like Helium, Planetwatch, Akash etc. These will allow you to mine and accumulate coins over a bear market and sell during the next cycle.

Over the past month and a half my DeFi portfolio has wildly outperformed BTC as well as ETH. I believe the reason for that is that I always had a sound profit-taking strategy. If you look at the image below, specifically the Allocation over Time chart, you’ll notice that the amount of stablecoins I’m holding (the red area) shrinks during dips and grows during upswings.

My end goal is to have a significant amount of money in stablecoin farms, which would allow me to generate enough passive interest to focus on doing the things I love. So don’t ever forget to not be too greedy and to take profits.