Risk/Reward
As I have mentioned before, I am primarily focused on identifying alpha, as opposed to “safer” and more modest gains, which are typically found in investing in blue chips. To be fair, BTC and ETH are perhaps the only two real blue chips at this stage. However, I am going to use the term a little loosely and incorporate the Top 20 Crypto projects, by market cap, into this particular categorization. In many ways, these projects are relatively solid, and so, are on their way to hopefully attaining true blue chip status.
Solana is primed for monstrous adoption. However, the project has faced several challenges, and to be fair needs time to establish a strong case and prove that it has indeed triumphed over, and definitively dealt with these issues. That being said, let’s begin with Solana. My approach to Solana is not in the form of typical accumulation. I am choosing to gain exposure to Solana-based projects instead, as well as building leveraged positions.
Projects such as BONK, Raydium, and DIO are where I am Focusing. In terms of leveraged positions. This strategy was initiated below $20, and so I have managed to gain a somewhat unique way of profiting from Solana’s rise. This ultimately removes the need to hold SOL, so, I will not be accumulating SOL. I am however accumulating Cardano. The ADA I accumulate will then be used as collateral for inverse perpetual futures positions.
In other words, I am holding ADA, but simultaneously utilizing the coins as collateral to earn even more ADA. As I have mentioned before, where possible, it is best to use Crypto assets as collateral for trading purposes. This is however only applicable in a bull market. It creates a double-whammy effect in that you earn on your trades while simultaneously increasing the value of your collateral. This dynamic unfolds as the price of ADA rises.
Polkadot is another Top 20 project I am looking to modestly accumulate. Essentially, I believe Polkadot 2.0 is going to have a profound impact on the price of DOT. Secondly, DOT appears to be heavily undervalued, in my opinion, and thirdly, it offers a whopping staking reward of 14%. There are several projects within the ecosystem that I am also looking to build positions in over the next year or two. I think the idea of DOT reaching $100 is not far-fetched at all.
This is especially true when you consider that Polkadot’s all-time high price is just north of $50. When it comes to Polygon, I have chosen the same approach as Solana, and so am not actually in the process of accumulation, but rather, exposed via leveraged positions. I am using 10X leverage, so there is scope for some decent returns. These positions are currently well into profitable territory. However, I am very careful when it comes to protecting my entry, and ultimately, liquidation levels.
I can tell you now, that not many traders know how to apply leverage together with solid risk management. For many, it’s just gambling. However, leverage is a tool and needs to be handled appropriately. When it comes to Avalanche, I have also chosen the layer 1 effect, as with Solana. This incorporates DEXs and gaming projects built on Avalanche. I might pick up a few actual coins if the market dishes out one of those historic 40% corrections.
Final Thoughts
As with every aspect of investing, diversification is always present when it comes to my exposure, as well as my approaches. I usually have a few positions that are significantly larger than the majority. In the last cycle, it was ETH. However, ETH is excluded for 2025, as there are better opportunities on offer, in my opinion. Anyway, these are my thoughts and approaches regarding Crypto’s Top 20. Enjoy the rally and see you next time!
Sapphire Crypto 