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- 📝 How to 5X your BTC-ETH-SOL gains
GM everyone. This is 2036. We scroll for gems all day so you don’t have to.
Here’s what we’re serving up today 🍲: You can hold bitcoin, Ether and Solana. Or you can squeeze some extra juice out of it. Here’s how.
Let’s dig in.
Two weeks ago, I talked about increasing your crypto returns by moving out on the risk curve.
I mentioned two options: on-chain (the “true” crypto) and off-chain (e.g. in your brokerage account)
The risk curve looked something like this:
On-chain: bitcoin → ETH → Solana → blue-chip NFTs → other Layer1s → >$1B market cap coins → all small cap coins & NFTs
Off-chain: bitcoin/Ether ETFs → $COIN → other crypto stocks (e.g. $GLXY, $GDLC, etc.) → bitcoin miners → options
The theory is simple: the more risk you take, the higher your potential return.
Now - going out on the risk curve isn’t advised in down markets. Bitcoin and Ether were almost the only things that protected you from total annihilation.
But with bitcoin at $40,000 - it might be time to move one step out on the risk curve - and squeeze some extra rewards out of the market.
This is not financial advice, but a quick run-down on how to do it on bitcoin, Ether and Solana.
1/ Bitcoin.
Bitcoin is both a reliable and boring crypto. In each cycle, it typically goes up the least of all major coins - but is the only coin still standing 15 years in.
But you can get exposure to the price of bitcoin - with a little extra juice in it.
One of the ways is to own Bitcoin Layer 1s like Stacks ($STX) - a DeFi/NFT protocol on the bitcoin blockchain.
But another (and probably better) way is by owning bitcoin miners.
Bitcoin miners are like call options on bitcoin.
As bitcoin climbs, miners climb exponentially.
That’s because their profitability increases nonlinearly as the price of bitcoin goes up.
At $40,000 bitcoin, miners are somewhat profitable. But at $70,000 bitcoin - they’re really profitable.
Wall Street hasn’t woken up to the reality that Bitcoin will (probably) rise above $70,000 next year. So, miners are still cheap.
Sure - since I wrote about them in October, $RIOT is up +63% and Cleanspark - $CLSK - is up +183%.
But bitcoin miners still have a long way to go.
You can pick individual miners or simply buy the index of miners in your brokerage account $WGMI.
2/ Ethereum.
If Bitcoin is like the Catholic Church - mostly devoid of innovation - Ethereum is like New York City: the biggest city with the most expensive property, banks, and neighborhoods.
As Ethereum grows, the assets on its network grow in value too.
That’s why I’m bullish on Ethereum NFTs.
As Ethereum gets more attention thanks to the upcoming Ether ETF and the upgrade to the network - NFTs on Ethereum should outperform Ether itself.
Now - I don’t recommend buying just random NFTs.
You’re probably better off buying established blue-chip collections.
As I mentioned last week, my favorite of these is Pudgy Penguins - and their cheaper cousins Lil Pudgys.
Lil Pudgys can be had for ∼1.15 ETH. But if you spend time digging around (and reading 2036), you might come across a few more gems…👀
3/ Solana
Solana’s been the big comeback story of 2023.
Its ecosystem is exploding. Protocols are dropping airdrops worth tens of thousands of dollars to each user.
And some NFTs on Solana are already worth about the same.
With that said, I still think that with airdrops - NFTs are the best way to juice your SOL returns.
Solana NFTs have more trading volume than Ethereum NFTs.
And eventually, they might catch up in value to some of the biggest ETH collections.
For now, it looks like the most likely collections to do that are:
You can buy these on Tensor - and qualify for the Tensor airdrop in the process. Two birds, one stone 🐦
You’ll also find high-risk gaming NFTs on Solana. But they’re the topic of another newsletter.
For now, as the crypto bull market heats up, it might make sense to take some extra risk.
