Over the last 3 months, I increased my Crypto Gaming portfolio by 400%. 

All of it was due to 50+ hours spent reading and watching the top online Crypto Investors.

When it came to selling, the biggest mental shifts were:

1. Buying should be hard, selling should be easy. You get into trouble when you get religious about your investing & begin preaching. - Alex Becker

2. The most successful Alt Coin investors understand that gains get made in micro-caps but long-term value is held in long-term holds (BTC, ETH, etc.). - Cobie

I’ve broken down the exact tactics they teach below: 

Successful Micro-Cap Investors Know When to Sell

Micro-caps are often pre-revenue and in alpha. They get priced on narratives, not product value. 

Investors value them by Market Cap (referred to as MC) by looking at other successes in your niche. Every token is “the next X.”

• AVAX ($22.5B MC) could be the next Solana ($46B MC). 

• Illuvium ($500M) could be the next Axie ($5.2B).

So, on any investment, track the 'success story' in your narrative. The closer you are to your ceiling, the more reason to de-risk before it overheats.

Best case, you called it perfectly and it begins to dive. Worst case, you’ve taken hefty profits and can always reinvest into a new narrative. 

Successful Micro-Cap Investors Have A Pre-Set Selling Plan

Alex Becker - Being exposed to the micro-cap market for a long period of time is the riskiest way to trade. It always eventually cycles down. 

Cobie - “In general, the most successful altcoiners I’ve met have used the metagame to increase their value-holdings over time (ie. trade meta to stack BTC or ETH)”

Your job is to understand a niche's narratives or 'meta'. Focus on consistently good bets -> de-risk into long-term holds. Avoid the eventual volatility that WILL hit your micro-caps.

Strategy 1 (CryptosRUs): When You 2x, Sell Half. 

• If your investment goes to $0, it doesn’t hurt you at all. 

• If your investment goes to the moon, fantastic. You covered the downside.

Method 2 (EllioTrades): 4X or more -> use the 10/20/30/40

• 10% BTC HODL [Invest in Long-Term Holds. Doesn’t have to be these]

• 20% ETH HODL

• 30% USDT or ETH (for new opportunities)

• 40% moonbag

Successful Micro-Cap Investors Treat Investing Like A Game

There’s a meta to the game. Certain narratives are growing in popularity and raising all of their constituents (like Crypto Gaming in Q4 2021). 

Your job is to step away from the voice in your head telling you that you’re going to miss out and study that meta. Moreso, to understand that the meta is going to change and you need to get out before it does and find the next one. 

Remember, the name of the game is survival, not trying to hit the lottery.

Over the last 3 months, I 4xed my Crypto Gaming portfolio. All of my gains were in micro-caps (under $50M market cap tokens) and thanks to hours of Alex Becker's educational (and hilarious) investing videos.

In this post, we'll cover what it means to:

• Watch the Market: Get in a little late. Get out a little early. Reduce risk, stay in the game.

• What to Buy: Buying the Narrative in a space where fundamentals barely exist.

DISCLAIMER: Micro-caps are hyper risky. 60% of my portfolio is still in the top 25 coins. For those who want to dabble, these lessons have served me beautifully.

Now, let's dive in.

Bitcoin leads. Alt Coins follow a few days/weeks later.

Watching the patterns of the market over the last year, Alex makes a clear note that Bitcoin pumping or dumping leads to all Alts following with a slight lag.

Get in a little late. Get out a little early. Reduce risk, stay in the game.

Your goal is to reduce risk and maximize reward. Aim for consistent GREAT gains when the whole market is heading up, not unreliable long-shot bets that might leave you with nothing.

It's perfectly fine to sell after a 5x pump, even if a coin might continue to pump. Profit is profit. You're aiming for consistency. Here's how:

1. Watch Bitcoin. When it begins a clean reset, money will begin to pour in, Alt Coins will follow with a small gap time. Look at AXS, ILV, or SAND as examples from the last run.

2. This gap time is your golden period. Have a watchlist of projects with solid narratives. Go through your list when Bitcoin pumps and pick the ones up still at dumpster prices. Profit.

Always have a watchlist of solid projects when things are down. Pick them up when Alt Season starts.

Cultivate reputable information sources (EllioTrades, Alex Becker, etc.) in your niche. Listen for their call-outs on reputable projects / do your own research.

You should be noting them down and making a watchlist for yourself.

Buy the Narratives. You're Too Early for Sound Fundamentals.

Since almost all projects at this point in their lifecycle are in alpha or pre-revenue, you're looking at their marketing. Not their product.

• Do they have beautiful gameplay videos or character art?

• Do they have a memorable message? (i.e. The Steam of Crypto. The First AAA Crypto Gaming Title)

• Do they have a strong, active community of ambassadors (i.e. Crypto Raiders)

Understand the overarching narratives in your niche. They sell. Crypto Gaming, for example:

• Ultra -> Steam of Crypto

• Gala Games -> Platform for producing high-tier games

• Illuvium -> The First AAA Play-to-Earn Game

• Zed Run -> The Crypto Gambling Pioneer

Get these right and you'll realize there's a science to the madness. No more FOMO apeing in.

And with that, I wish you happy hunting, and please share your wins with me!

In November 2021, I began investing in micro-caps (under $50M market cap). In the 3 months since then, I've 4xed my microcap portfolio.

Below is Part 1 of 3 on how Alex Becker's Micro-Cap investing strategies helped me achieve that. This part will be on understanding the investing mindset. If you want to keep following for the rest, subscribe to my substack!

Trading Crypto is risky, period. It's not like top 25 coins don't drop 40%. Microcaps just have massively higher rewards (if you're willing to put in the work).

So, with that in mind, a few points to establish baseline:

• If you put $50 in Bitcoin at the start of 2021. At Bitcoin's peak, you would have had ~$100 in your account. You wouldn't have made life-changing wealth. However, if you're looking for safe 2-3x returns and a lot less headache following a niche, the Top 25 cryptos make a LOT of sense.

• Micro-caps allow you to work with a lot lower capital. To make significant returns in the Top 25, you need big chunks of money put away in them. For Micro-caps, you can begin growing your portfolio with smaller $500 / $1,000 bets.

• I still have 60% of my total Crypto portfolio in the Top 25 to manage risk. But all my portfolio growth has been through micro-caps, even through the correction.

The following are the main mental models you need to know when investing in micro-caps:

Mental Model 1: Micro-caps are trading sentiment. Not value investing. Invest accordingly.

Alex's first lesson is that majority of micro-cap tokens are for projects that are either making no money or in alpha. The token barely correlates with the company's value.

Therefore, you must know:

• You are trading on investor sentiment for a project. So you have to be looking at the factors that drive that sentiment (Marketing, Visuals, Community, Narratives).

• Selling doesn't mean you don't have faith in a specific company. The token is purely speculative.

• Buying needs to be hard. Selling needs to be easy. If you're up on a coin 2x, it never hurts to take profit. You can always find another promising project.

Mental Model 2: Micro-caps require you to niche down and pay attention.

To find high potential micro-caps, you need to understand a niche well enough to pick up on trends and sentiment early.

Alex likens it to watching storefronts at a mall. If you're only looking at one door, you're obviously going to understand what people are buying and what they're stocking. If you're trying to watch the whole mall, you're going to do a lot of walking and get very little insight.

Pick your corner. Study it. Ignore the rest as an investor.

Tomorrow, I'll share how to look at buy opportunities and when to time them.

He took that 1 ETH (~$4,000) and multiplied it to nearly 5 ETH (~$20,000) before we saw the major correction near the end of 2021. 

Here are some of the lessons he learned along the way. 

Early Information is King. Live on Discord & Twitter.

You can't keep up with everything in the NFT space. You need to focus on your niche. Then, find all of the relevant sources of information on Twitter & Discord around it.

Zeneca’s underlying success was in keeping a close eye on community sentiment around projects on Twitter and Discord.

How can you do that? 

1. Look at the accounts Zeneca follows and add all of the relevant ones to your own Twitter NFT list. 

2. Read Zeneca’s guide to discord and learn how to scout informational channels to keep an eye on.

#1. Always be Liquidating. Momentum is key.

With a small amount of money to invest, you need to focus on consistency over home runs. 

1. Whenever you can take a 20%+ return on a flip, do it. Just make sure where your next investment will be. 

2. Every day you hold on to a project hoping for it to go up, is a day you can’t invest in another project that might net you another 20-30%. 

3. One of Zeneca’s biggest mistakes was getting over-excited about an NFT that was 45% of his total portfolio. Leading to him having to heavily slow down his investment momentum. Don't over-invest your bankroll on one project.

#2. Bid Below the Floor Price on a Wide Spread of Projects

One of the best ‘slam dunk’ ways to flip a small bankroll up is to convert your ETH to WETH on OpenSea and make bids on lots of items at well below floor price. 

1. Find collections that have stable floors & bid 20-40% below the floor price. 

2. The more bids you place, the more likely you are to have one hit. 

3. Just landing one hit here will mint you a significant return.

#3. Look for Stable but Thin Floors for an Easy Flip

1. Keep a daily eye on the floors of trustworthy projects.

2. Find 'thin' floors; meaning buying a few of the bottom-priced NFTs would significantly raise the minimum price of the collection. (~.45 ETH -> ~.6 ETH)

3. Buy up the ‘thin’ NFTs and reprice at the new floor. Easy 20% returns.

Using these strategies, Zeneca was able to take a 1 ETH (~$4,000) stack and bring it to nearly 5 ETH (~$20,000).

Follow the lessons learned and go make your own gains.

As a quick refresher, here are the big metrics:

1. How large is the gaming industry really? - $336 billion.

2. How large is the actual audience for gaming? - 2.8 billion people strong.

3. How much of that audience actually buys in-game items? - About $40B worth.

4. How many of those buyers wish they could sell their items for real money? - 81%.

Today, our focus is on the benefits that both gamers and developers are going to be able to see by entering the movement and what it’ll mean for the industry. 

First, we need to understand the current selling points of NFTs.

Right now, art NFTs are:

1. Unique - Each of them is made as a singular piece of art. 

2. Scarce - There is only one of each variant, so to have the ‘first 100’ of a popular collection gives exclusivity, for example.

For the buyers and sellers of art NFTs there are two major benefits:

1. Bragging Rights - A lot like the actual art market, having a piece from the Bored Ape Yacht Club is like having your own piece from Monet or Picasso. You're associated with brilliance or quality, and so you get status for being part of an exclusive club of owners. 

2. Resale Value - A lot like Supreme or any other prominent streetwear bread, there’s only so many of your specific collection out in the world, and you already have exclusivity built into the product. So, like Supreme, you also buy in knowing that you have significant resale appreciation over time (on a successful art NFT project).

If you notice, this makes Art NFTs almost solely collectibles. Their inherent value is in the story they tell. The reputation they give to the owner. The dollar value is derived directly from that association and exclusivity. 

How does gaming evolve the usefulness of NFTs? How is it uniquely positioned?

Gaming adds the third and all important layer necessary for NFTs to have inherent value. Utility. We already live in metaverses inside our virtual worlds. We already use virtual items as gamers. 

The most you can do with a BAYC (Bored Ape Yacht Club) NFT, for now, is put it as your profile picture and show it off. 

NFTs in gaming can be USED. That is on top of them having the stories, uniqueness, and resale values of art. 

They can be armor with actual stats in World of Warcraft. 

They can be Axies that you can collect and use to battle with other players. 

They can be limited edition skins that an artist makes for League of Legends but you can actually wear and use every single time you go into a game. 

Why are gamers, themselves, primed for adopting these NFTs?

#1: Our Expenses Become Assets: What is now us burning $10 for a League of Legends character or Valorant skin, will become something we own, can trade, and can appreciate in value. That, in itself, means we’re most likely going to be more willing to pay more for something we know can appreciate in value AND is unique. 

#2: Our In-Game Items Will Have History: Imagine being able to buy and own the exact skin that Faker used to win Worlds in League of Legends. Just like a signed ball from Lebron James, you own a piece of history that can always be traced back to its origins. But unlike that basketball that would be ruined if you play with it, you can use your skin every single day in-game. 

#3: If the Game Grows, We Benefit: Right now, a game exploding and growing in popularity really has very little benefit to the gamers playing it. Imagine a world where we participate in the economy of a game we love. We own a part of that game and as revenue explodes, we take a share through tokens. 

Why is it such a high-value play for developers in the long-term?

#1: Growing the Pie of Gamers Spending Money: Right now, less than 2% of players actually purchase in-game items [1]. And they drive a $40 billion market [2]. By making expenses into assets, like we talked about above, there’s a much higher likelihood of growing that pie of spenders. 71% of those who already buy have said they’d be willing to spend more for assets if they were actually sellable [3]. Blockchain gives them a reason by providing them with assets and a sense of investment in their in-game characters or accounts. 

#2: Healthier User Bases for Games: Axie Infinity, the current leader in the Blockchain Gaming movement, has astounding retention numbers. With almost no fall-off between 30 day and 90 day player-base retention [4]. When you share a portion of the game economy’s profits with players, your cost of acquisition goes down, retention goes up, lifetime value goes up, and players go from users to advocates. 

#3: Making Players Advocates: Roblox gives 20% of their revenues to creators and they’ve become one of the largest, stickiest games in the video game industry. Imagine what metrics would look like for a game that gives much more of that to their creators and players through active marketplaces and royalties on the Blockchain. 

#4: Kill the Grey Markets: Game developers make closed looped games, currently. In most cases, they try to prevent all trading, selling, and sharing of assets like skins, characters, and accounts between different players. This is because they don’t get any of the benefits from these ‘grey’ transactions. While in a Blockchain Game, MOST of the value comes from allowing for markets that do all of this directly in-game through NFTs on-chain. And developers get to take a cut off of every transaction (Axie gets 4.5% per sale). 

What are the larger issues that are still going to serve as barriers to entry for publishers? 

#1: High Gas Fees: In their current stage of development, most blockchains have pretty significant activity constraints that haven’t caught up with the burst of products being built on top of them and people beginning to interact on them. This leads to a much higher cost per transaction (gas fees) to trade, buy, or sell within games. Sometimes as high as ~$200. This leads to a lot of profit being wiped out for players and makes it hard for them to infuse more capital into the game economies. 

#2: High Switching Costs for Successful Traditional Developers: Like every major innovation, the long-term benefits for exploring the power of NFTs to create a whole new scope of game is pretty clear. The hard part is the short-term losses established players would have to take to make it happen. 

Long term, they would have broader user bases, be able to incentivize more of those users to join the game economy, and have a deep-seated alignment with their player base. Meaning, publishers would have advocates who play their game, align their profits with those creators & players, and have long-term staying power. 

Nonetheless, the short-term disadvantages are also clear. 

• They would have to switch from a model where 100% of in-game economy sales go to developers to one where a much larger percentage of the pool is shared. 

• Moreso, developers need to become very familiar with the blockchain and spend the time/money to launch and manage their Blockchain economies. That shift in expertise isn’t cheap.

#3: Giving Up Control in Game Economies and to a degree, Game Design. 

In the current gaming space, developers have almost complete control over all activity within their game ecosystems. For example, Riot Games, controls the gameplay, character development, eSports scene, and creator scene in the League of Legends, Valorant, and Teamfight Tactics ecosystems. 

In a world where their games would be on the blockchain, they would have to forfeit some of that control. They would have to go from being the only suppliers of new skins to allowing players to trade amongst themselves. They would have to allow for the market to price itself. Furthermore, they would eventually want to build in incentives for users to even be able to create things like skins in the game, removing some of their game design control. 

Amazing Sources To Learn From:

Nansen.ai 

Website

Twitter

Article 

With their article, The Compelling Case for NFT Gaming, Nansen articulates a lot of the essential arguments for why blockchain adoption makes so much sense in the gaming world. Their content also is a perfect launching pad to dive into a lot of other great sources discussing the space. 

BITKRAFT Ventures 

Website

Twitter

Article 

These guys are a brilliant and really experienced group of investors/researchers who helped immensely in giving me a 360 degree view of the space as a whole. Their article, Gaming: A Potential Driver of Blockchain Adoption, is a solid source when diving into the industry problems and potential solutions.