Some of you are here to get rich quick and make it in one bullrun. While there is some success stories, there is survivorship bias.This means you’ll only hear the success stories. For every success story there might be 5 sad stories.
Gem hunting is fun, but risk management is key
Common Mistakes for the Gem Hunters:
- Too Aggressive, not hedging their portfolio with stablecoins or blue chips
- If BTC dips 30%, your micro cap sh*tcoins can dip 80%
- Understand where you are in the cycle before aping into high risk high reward micro caps
(infographic by @secretsofcrypto on twitter)
- Don’t rely on other people and ape blindly
- Develop your own intuition, your edge is built by becoming an expert
- Cultivate your Inner Ape
- Be sure to sharpen your risk management simultaneously
- Don’t be afraid to lose money, this is Ape to Learn
- You’ll get rugged & REKT. This is inevitable. If 2 out of 10 do a 10x but you get rugged 8 times, you still doubled your money. Can’t stress this enough: Risk management is key.
Does anyone remember this guy?
He turned 8k into 5 billion.
While that may be the best trade in history and not a realistic goal…
The point is being early to new crypto projects can be life changing!
Finding these projects early is a skill and can be learned. Over time you will get a nose for hunting alpha. It will take time to become a proficient hunter. Don’t get wiped out before develop your edge.
Here are the things that will help you develop & improve this skill:
- Get comfortable with DEX’s
- (Whale) Wallet Watching
- Become a Twitter Expert
- Stalking Discords
- Resources for Finding New Listing
- Leverage your Attention
- Understand Meta Game
- Evils vs. Good Seed Investors
- More Resources on Wallet tracking & Watching
1. Get Comfortable With DEX’s
Coins that are listed on a Centralised Exchange (Binance, FTX, Kraken, Coinbase) usually already have a pretty high Marketcap. Decentralised Exchanges (DEXs) is where it’s at. Why?
The law of big numbers:
Law of large numbers in Finance is a concept related to the growth rates of businesses.
The law of large numbers states that as a company grows, it becomes more difficult to sustain its previous growth rates. Thus, the company’s growth rate declines as it continues to expand. The law of large numbers may consider different financial metrics such as market capitalization, revenue, and net income.
Since investing in small sh*tcoins is basically similar to investing in start-ups the same rule applies. If Bitcoin has a marketcap of 1 trillion, it needs 99 trillion to do a 100x.
Some sh*tcoin with 1 million marketcap will need 99 million.* That can happen in a couple days in crypto.
*This is a bit of a simplification, more important is liquidity. So technically you can get a 10x of a 1million mc sh*tcoin with a lot less than 99million.
So following the rule of large numbers you need to take into account that if you want to make it quick in crypto, you need big multiples. These big multiples with a mid/large cap coin take more time as the growth rate slows down (on average, crypto is a physics defying place sometimes).
Don’t want to get involved in Dex’s and still find gems? Kucoin is your best bet. It has the most and wide array of low cap. These will be low caps in the 10–100million marketcap range.
2. (Whale) Wallet Watching
Last year I was watching whale wallets & youtube influencer wallets. I had notifications set-up for every movement. A famous youtube influencer bought an unknown token that just launched called $OHM. It had a marketcap of <30million. I aped first, to research later. I knew the influencer was gonna talk about it in one of his next youtube videos. Thinking I was gonna flip it for a 2–5x in a couple days, I patiently awaited the next video. In the meantime I read through docs on discord for my due diligence and became intrigued. The video dropped, the influencer talked about $OHM, I hit a 3x. But at this point I was captivated by the 3,3 ethos and proudly called myself an ohmie.
It then became my biggest portfolio booster with a 40x during mini bear in May ‘21.
To start whale watching I suggest you start with Arkham Intelligence, they are by far my preferred OnChain Sleuthing Platform. The best thing is they are free and you can sign up immediately without a waiting on the waitlist using this link here.
I use that in conjunction with Etherdrops, you can use that for 20 wallets for free. If you need more wallets, then sign up with a 25% discount using my referral link here.
2. Become a Twitter Expert
- Advanced Search on Twitter is Your Best Friend
- You can search for your favourite (recent) sh*tcoin, e.g. hyped token $XYZ
- Choose a date range of ~ 1st month of token launch
- Order search results chronologically
- You’ll find the FIRST people who EVER shilled it on twitter
- Follow them for future alpha drops & Whitelists
- Follow enough of them and you’ll basically be part of insider circles
Found a new Listing or promising gem?
Check out twitter. Who are the followers? Are there big names in there, VCs? Big names in DeFi?
Less than 10k followers?
You’re still early anon…
👉 Check out their discord next
3. Stalking Discords
Because I was early to $OHM and there was a big community of innovators in DeFi hanging out in Discord, I found out about $KLIMA and $TOKE early.
Spending time in discord can be time consuming. Find vibrant communities early and you’ll find that will lead you on a trail of other gems.
Finding the first one is the hard part.
4. Resources for Finding New Listing
https://tokensniffer.com/
https://dexscreener.com/
- @discobot3 on twitter/discord put notifications on, it will notify you on new listings
- @alfalfaleeks.
The alfalfaleeks Bot will let you know if newly deployed contracts suddenly has a high inflow of money in a short amount of time.
Do a quick due diligence and APE!
https://twitter.com/alfalfaleeks/status/1492027297280376837?s=20&t=d3FtERsRBOrz6O1EIPRJVQ
If you learn about a listing, you can quickly do your due diligence:
- Check Twitter
- Do pulse check in Discord (search bar is your friend)
- Tokenomics?
- Watch on chain for red flags (% held by team/founders/whales)
- Partnerships
Next level MICRO gem hunting:
This legend @sh*tc0in finds tokens a couple hours old less than 200k marketcap.
To do a few more checks to minimise chance of a rug, check out this thread:
https://twitter.com/sh*tc0in/status/1491711618597720074?s=20&t=d3FtERsRBOrz6O1EIPRJVQ
5. Leverage your Attention
Your time, energy & attention span is limited each day. Don’t rely 100% on yourself to find gems. Work in groups and frens. Don’t have those? Use twitter! Your network makes you aware of new alpha. If you follow 100 quality Crypto Twitter Alfa Hunters, you now have another 100 pairs of eyes searching discord and twitter for you. Focus your twitter feed, discords, etc. on one specific sector, that may help get a better grasp of things. Crypto is getting too big for one person to keep up-to-date with. Cut the noise, get rid of useless accounts. Low caps your thing? Pursue that solely. NFT’s? Follow every project and try to immerse with those accounts. Get whitelisted early.
Information overload happens on the daily. Between all the charts, twitter, discord, telegram groups, find a balance, know when to chill and take a time-out. The markets will always be there, and in the case of crypto an exhausting 24hrs, 7days a week. Every month new opportunities, you don’t need to get them all.
6. Understand the Meta Game
Understanding the $OHM fork narrative last year was extremely profitable.
What does that mean? Let’s break that down:
- Understanding what Olympus DAO offered early and why it was revolutionary.
- Understand that people were forking the code and putting it on different chains, which was subsequently successful. Wonderland ($TIME) was the first clue.
- The third step would be to find new OHM forks that were going to be deployed on other chains early and trying to get whitelisted for those.
Individuals who managed to identify this trend and come to 3) conclusion early were extremely profitable.
This is a wonderful read on how to play the meta game:
https://cobie.substack.com/p/trading-the-metagame?s=r
7. Evils vs. Good Seed Investors
Sometimes being early is still not early enough. Often times Venture Capital Firms will get the juicy deals for bringing a lot of capital early. So before the token launches officially these VC’s already secured their allocation. It’s good practice to figure out if the seed and pre-seed investors have their token allocation vested, or can they dump on you right after launch? This will help you answer the question:
To flip for a quick profit or to hold (a %) for long term?
Some ‘good’ VC’s invest for the long term.
Other ‘evil’ VC’s have no thesis, vision or conviction.
They fund short-vesting projects with a goal to quickly flip and extract value from a bull market.
So if you find which VCs funded the project, here is a list with VC’s and where they lie on the spectrum of good/evil that can help you make your decision.
8. More Resources on Wallet tracking & Watching -
- Etherdrops — Best in the game for Onchain Alerts
- Arkham Intelligence — Best Onchain wallet watching dashboards
- Etherscan.io
- @nansen_ai
- @zapper_fi
- @DeBankDeFi
- @ape_board
- @zerion_io
Want to find out more about Whale wallet watching to get an edge?
Check out these two articles I wrote on the topic:
- https://medium.com/@DeFi_educator/on-chain-analysis-whale-edition-a8ce173b423f?source=user_profile---------6----------------------------
- https://medium.com/@DeFi_educator/outsmart-whales-evade-dumps-with-alerts-ced6082039ee
