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📝 How we gamble 10% of our portfolio

📝 How we gamble 10% of our portfolio

PLUS: ETF decision delayed

Alex M.
September 27, 2023

GM everyone. This is 2036, the crypto newsletter that pays you.

Here’s what we’re serving up today 🍲: bitcoin can 5X in the next bull market. Ethereum - 10X. But there’s another coin institutions are looking at that could 50X.

Let’s dig in.

🥔 Today’s meat and potatoes

Get smarter on crypto in 2 minutes

We’ve said many times that the best portfolio for most people is:

50% BTC
50% ETH

But let’s be honest: a lot of us love to gamble.

Just a little bit.

To take that one shot to make 1,000X.

The point is not that we can’t gamble at all. It’s that we keep gambling to a small % of our portfolio - for the trigger-happy days when we feel like we can take on the world.

Because when crypto explodes, that’s how you’re going to feel.

Luckily for us, there is a way for us to do that while minimizing our downside.

In short, you change:

50% BTC
50% ETH

into:

45% BTC
45% ETH
10% other coin(s)

… and voila. You have room to gamble (a little bit).

The mistake 90% of us make is that we get too excited and instead do something like:

0% BTC
5%ETH
95% coin we think it’s going to change/save the world/1,000X/[insert your rationale here].

We get caught in the hype, and if our optimistic scenario doesn’t pan out (e.g. Dogecoin to $1), we ride all our profits back to 0, hoping for a recovery. Don’t worry, I’ve been there too.

[You can read exactly what that looks like in yesterday’s newsletter.]

So how do we invest the last 10%?

We don’t actually ‘gamble.’ We take calculated bets with a lot more upside than downside.

And if you speak to institutions today about what token has the highest upside relative to its downside (that isn’t Ether), only one comes up consistently: Solana.

You see, Ethereum is slow and expensive but home to some of crypto's most valuable and secure transactions and assets (e.g. NFTs).

Solana, on the other hand, is a blockchain designed to be incredibly fast and cheap.

Now - Solana’s come a long way. 2022 was tough on everyone, but particularly on Solana:

The network was down more than 14 times
It was the darling coin of Sam Bankman-Fried, founder of FTX
The token plummeted by 93%

… but it looks like things are getting better.

Solana has had 100% uptime since February. More and more people are staking their coins for yield (approx. 6.7% today).

And more importantly:

Visa partnered with Solana to process payments faster
Shopify integrated Solana to enable payments in USDC (a $25 billion stablecoin)
Maker (creator of another $5 billion stablecoin) is exploring deploying the protocol on Solana

i.e. if Solana actually pulls it off and becomes the de facto cheap and fast blockchain, it has a bright future ☀️

Today, Solana is worth just ∼4% of Ethereum’s total market cap. It has a ton of space to grow.

But that doesn’t mean Solana is risk-free.

Some of the best-performing coins of the next cycle have likely not launched yet. Solana could face some serious competition we’re not aware of - and become irrelevant.

On top of that, the FTX estate still holds over $1 billion in SOL tokens, which will need to be sold over the next 3 years.

But if Solana does become the go-to blockchain after bitcoin and Ethereum, it could repeat ETH’s performance in 2018 - in which it 47X’d.

If that’s the case, even a 10% allocation would almost 5X your entire portfolio.

It’s a bet that could be worth making. It could satisfy your desire to gamble while limiting your downside.

And that’s what we’ll pay you to do today.