21 Crucial Lessons for Successful Crypto Trading and Investing

Here are the key lessons from my experience in crypto:

1. Understand the myth of crypto cycles.
2. Follow the trend when investing and trading.
3. Don't let choppy markets destroy your confidence.
4. Compare your altcoin's value against Bitcoin for better judgment.
5. Learn trading basics and technical analysis.
6. Use reliable coin tracking apps for research.

I have made millions of dollars investing in crypto over the last 6 years, but before I made the millions, I also lost it all multiple times. If there had been a video like this that existed when I first started trading in crypto, I would have saved and made so much more money.

So here are the 21 most important lessons I've learned about crypto trading and investing over the years and how you can use these lessons to make more money and lose less.

Welcome back to the Virtual Bacon Channel! My name is Dennis, I'm a crypto investor for the past 6 years, and I have invested in over 100 crypto startups. On this channel, I share views on market trends and investing strategies to build wealth in crypto.

Let's get down to it. You want to start investing in crypto to make life-changing money and start trading right away. But you need to understand first how the crypto cycles work, and that's my number one lesson: understand the myth of crypto cycles.

You see, crypto markets come and go, but they are not exactly four-year cycles each time. When beginners first get started, they try to follow this exact timeline and use it to predict where Bitcoin will bottom and where it will top. This is a terrible way that can lead you to ruins.

Back in the 2021 Bull Run, there was this super cycle thesis, which essentially was that all the money printing because of COVID and crypto adoption would lead to a massive pump that causes crypto to run for multiple years and completely forgo the bear market. This thesis looked so real, especially in the second half of 2021 when Bitcoin had the second wave up.

Even I got trapped in this narrative, and this has led me to hold way too many positions all the way down until Bitcoin bottomed out at 16k by the end of 2022. The real lesson here is that the bull run patterns following every four years with the Bitcoin halvings are mostly just coincidence. The real deciding factors are the macro liquidity cycles, which clearly ended in summer of 2022.

These are the real metrics you can track with things like M2 Global liquidity and how the FED is increasing or decreasing their balance sheets. You can learn more about these real liquidity indicators by going to my video about the myth of the Bitcoin cycles.

The number two lesson, which closely follows that, is the trend is your friend. When you are investing and trading, think about this scenario. They always tell you to buy the dips even when markets are going down consistently, so you end up buying the dip, buying the dip, buying the dip, but each dip becomes lower and lower.

This is because buying the dip only works in an uptrending market structure. Similarly, when the market structure is trending sideways, you want to avoid trading. When the market structure is trending downwards in a downtrend, you don't want to buy the dips; instead, you want to sell the rips or sell every time price bounces.

This way of trading is called Trend Theory and following trends. We have a full course on this in the Coiners community, which is linked down in the description. The most important takeaway here is that you need to know at all times if the market is in an uptrend, sideways trend, or downtrend. You want to focus on following that trend, whether that's buying the dips on an uptrend or selling every bounce on a downtrend.

Now, what if the markets are choppy and only going sideways? This leads us to the third important lesson: don’t let the choppy markets destroy your confidence. You want to avoid trading when the market is doing nothing.

From March 2024 to October 2024, Bitcoin has been trading completely sideways. This is what we call the chop, and it ranges from 55k to 70k. If you zoom out and look at this period, Bitcoin is essentially trading at the same price that it was at 7 months ago.

However, many traders are losing their confidence because they keep trying to outperform the market and trade when there is nothing going on. This also leads you to lose confidence in some of the strongest altcoins that you should be holding for the long term.

For example, after the major run-up on Phantom to $1, it came all the way down to 31 cents, and so many people lost confidence in this coin right around the bottom. Now you see this is ticking back up again. Similarly for Superverse, after it rallied to $150, it came all the way down to 40, and a lot of people sold in this last phase before now it's back up to $140.

We all know that the bull run is coming, and we all have long-term positions that we want to hold on to. So why are people giving up now when Bitcoin is at the exact same price as 6 months ago? Protect your psychology and don't lose confidence from overtrading in the choppy markets. Psychology is the number one influence in trading and investing. Without a plan, the volatility will make you trade and take the trades that you wish you hadn't.

Pro traders are comfortable doing nothing when the market doesn't give them any direction.

The fourth important lesson is is your altcoin going up in value versus Bitcoin? When beginners first get into crypto, they usually only look at coin prices in dollar terms. However, comparing your altcoin's value against Bitcoin actually gives you the full picture.

For example, here is the chart of Ethereum versus Bitcoin. You see, even though Ethereum has gone up in value over the past two years in dollar terms, it has actually gone down in value in its ratio versus Bitcoin. This means you were better off holding Bitcoin, which is arguably lower risk, and you would have made more money while taking on lower risk.

On the other hand, here is the chart of Solana versus Bitcoin, and this is a completely opposite picture because Solana's ratio has been going up against Bitcoin. This means it made sense to hold Solana up until this point because even though you're taking on higher risk, you received higher rewards and your portfolio went up faster than if you had just held Bitcoin.

Now, that's not to say Ethereum is going to go down against Bitcoin forever. At some point, it should bounce, but this is a common way that you should check for the assets you're holding over the long term. One simple way to check this is to go on CoinGecko and under the settings here, there's something people really don't know often, and that is the currency settings.

You want to go in here and instead of choosing dollar, you want to choose denomination in Bitcoin. This will change all the pricing, market cap, and price movement percentages to be compared versus Bitcoin. Now you see the full picture. As you scroll down this list, all the green numbers you see on altcoins are actually altcoins that are going up in value versus Bitcoin.

I remember when my portfolio first hit 100 Bitcoin in 2021. I just kept playing and trading in the market until the end of 2021 and early 2022, but my portfolio number never got back above that 100 BTC number anymore. Instead, it only went up slightly in dollar terms, but not in Bitcoin terms. This means I was actually losing opportunity cost versus if I just held Bitcoin.

Because of this, those portfolio gains also came crashing down when the altcoin cycle died along with Bitcoin.

In order to outperform the market, you can’t just rely on historical data and crypto cycles. Instead, you'll need to get the up-to-date information for those quick trades, so you need to learn how to use the most important tools in crypto. This brings me to my number five important lesson, which is that everyone needs to know the basics of TradingView and basic technical analysis.

Beginners usually skip this part. When they hear about TradingView and look at this interface, they get really overwhelmed. They think they either have to go all or nothing and have to become a full trader, creating all these chart patterns on the chart. In reality, it's just important to note the basics of how to use this platform because it applies on all exchanges in every coin you trade.

If you don't know how to read the chart, you won't be able to identify the basic support and resistance levels. For example, here's the price of Solana. When you look at this chart, you should be able to clearly see: okay, Solana was consolidating and trading sideways from November 2022 until October 2023 before it finally started its new run.

Because the lowest level that Solana got to was only around $12 to $13, it kept bouncing from this level even with all the major crashes from FTX and from Luna. Chances are this was near the bottom for Solana, and this isn't complicated day trading TA. This is looking at a long-term chart and finding value ranges.

Similarly, now you can see Solana has been testing around that $125 level multiple times this year, and every time it goes there, it tends to see a bounce. This is a clear support level that people can pretty easily identify. These basic levels of technical analysis are actually the most useful, and it applies to all charts.

You don't have to believe technical analysis can predict prices over multiple years in the future, but knowing these basic chart patterns is super important for all crypto investors. In the Coiners community, we also have a free course going over the complete step-by-step guide on how to do technical analysis, and you can check that out by going to the Coiners.io.

Now, I get asked so often where to find a coin that I have mentioned. Where can you even buy it? This is the sixth lesson I want to teach you guys, which is learn how to use a coin tracking app like CoinMarketCap or CoinGecko.

So many times I see people commenting, "Why is xxx coin not on Coinbase or Binance? I can't even buy it." This is a feature and not a bug because all cryptos trade on multiple exchanges, unlike the stock market where you can have one main broker to access all available stocks. To find the exchange you can buy a specific coin, it's very simple. You go on CoinMarketCap or CoinGecko and search for the coin you're looking for.

For example, this AI coin Human AI. I know for a fact it's not trading on many exchanges. Then you go to the markets tab by scrolling down, and you see here are the exchanges that have it to trade: Kcoin, Uniswap, Mexe, Gateio, Osmosis. If you can buy coins before they list on major exchanges like Binance, Coinbase, Upbit, or Bybit, this can present a great opportunity to get in early.

CoinMarketCap and CoinGecko are also really strong at tracking categories and finding similar altcoins in the same category. For example, if you like this Human AI coin and you know it's an artificial intelligence altcoin, you can go to its categories and click on this tag, and you see all of the top ranking AI altcoins by market cap. You can go down this list and find other altcoins that you can do research on.

This discovery part of CoinGecko is also very important. Now, don’t be intimidated by all the exchanges that exist in crypto. Beginners complain that they always get into the altcoins too late, but at the same time, they only want to trade on Binance and Coinbase and don’t want to sign up for any other exchange. The top exchanges will always be late to listing the new altcoins.

The altcoins that have higher potential and start at a lower market cap. This is because the top exchanges have to do a lot more due diligence and can only list these coins once they are already at a high valuation. That's why the number seven lesson I want to tell you guys is that using many exchanges is a good idea.

Be ready to use many exchanges. This is an important tool for more profits in crypto; it’s not a hindrance. Every time you go on a new altcoin and you look at the markets tab and you don’t recognize any of these exchanges or you maybe don’t have accounts on any of them, don’t be afraid to sign up for one of them.

The more you do this process, the more access you’ll have to more altcoin selections. Look at all the top crypto exchanges and the number of coins they have to offer: Binance only offers 428 coins, and even the largest list on a single exchange is at Mexe with 2,500 coins. But consider there are over 5,000, probably 10,000 altcoins out there trading that are decently okay and could have potential for investments.

Especially if you're looking for low-cap altcoins, you simply cannot find that by only using one or two exchanges. Not even all the exchanges have all of their coins overlapping, so even some coins that are listed on Binance would not be listed on Coinbase. I have a full video on the best exchanges to use for trading crypto based on your needs, and in here we also cover the exchanges with the largest altcoin selections, so make sure to check that out. Link in my description.

Another tip about exchanges is that decentralized exchanges are just as important. The number eight lesson I want to tell you guys is that don’t be afraid of DEXs; they are your friends. They are not scams and they are not by default only trading scam coins.

Decentralized exchanges are very easy to use. You just need to learn this one main interface that is invented by Uniswap called the swapping feature, and it applies to all decentralized exchanges on all different blockchains for all tokens. The cool thing about decentralized exchanges is that the moment a token is created and can be transferred, it will be available for trading on a decentralized exchange.

This is because anyone can add the liquidity and create that market right away, even if that token is not listed on any major centralized exchange. This means it’s almost guaranteed that you can have the earliest access to the token before centralized exchange listings. Of course, this also leads you to higher risk because anyone can create a token and have it listed on Uniswap for trade.

But you should not avoid decentralized exchanges for this purpose. By using them as a tool, it opens you up to a much wider variety of altcoins you can get into. For example, Xborg is a gaming altcoin that we got into a couple of months ago that has been already up more than 3x since we got into it on YouTube in our portfolio.

Decentralized exchanges are also the go-to place if you want to trade meme coins at all. Look at MOG coin; this coin actually launched even in August 2023, and for all this time, it was trading at a very low market cap in the $10 million to $20 million range. It was only trading on decentralized exchanges, so anyone could have gotten into them before they got listed on major centralized exchanges like Bybit, Gate.io, etc.

With that being said, there is the other side of the equation, which is that crypto is full of noise and scam projects, so you need to learn to read the data that matters, and this can help you to avoid the most obvious scams. The ninth lesson, especially for meme coins, is that you need to learn how to value tokens correctly.

In 2021, many people called for Dogecoin to go to $1 simply because the unit price was cheap. This was around the time when I was making a lot of TikTok videos, and I got so much hate for telling people that Dogecoin is already at multiple tens of billions of dollars in valuation, and the chance of it going to $1 is very slim.

Now, Dogecoin did manage to go to 60 cents, mainly because this isn't as bad a case. Dogecoin has been a very long-running meme coin with not that huge of a supply of 150 billion tokens. But still, most people only looked at the unit price of Dogecoin and thought it was cheap because it was trading at just a few cents versus Ethereum, which was at multiple thousands of dollars.

What they don't understand is that Dogecoin has a massive supply, and this makes it very high in market cap and already in the top 10 crypto rankings in 2021. Market cap and fully diluted valuation are the two main metrics that actually matter and determine the value of a crypto token.

Just look at this comparison when you look at Dogecoin versus Shiba Inu. Why is Shiba Inu's unit price so much lower than Dogecoin? This is because Shiba Inu has more than 1,000 times the supply of Dogecoin. So even though Dogecoin is trading at 11 cents and Shiba Inu is 0.0018, Shiba Inu is already near the same price level, so to speak, or market cap level as Dogecoin.

Here’s another example for two meme coins: Dog with Hat versus Bonk. Because Bonk has such a bigger supply than that of Dog with Hat, that's why Dog with Hat trades at over $2, whereas Bonk trades at this tiny, tiny unit price. Just because you can own millions of tokens of a meme coin doesn't mean those tokens should be worth anything at all.

That’s why you have to be extra careful when you are playing meme coins, and if you don't know how to read the market cap and fully diluted valuation and compare them, you are in for a lot of pain.

The other important metric for a crypto's fundamentals is its supply, specifically its tokenomics, which dictates the circulating supply versus the total supply. This is the tenth lesson I want to tell you guys: you need to learn how to spot good tokenomics.

Tokenomics refers to numbers like the total supply of a token and how much of that token supply is currently in the market versus how much more is potentially coming onto the market where investors can sell those tokens for profit. You often hear of this word VC coin, or high FDV coin, or low float coin. All of these sayings simply mean that you have a very low circulating supply versus the total supply.

Now, a rule of thumb is that when you see 25% plus of the total supply circulating, chances are those tokenomics are okay. Most of the time, the investors would not control more than 25%. However, when you see a newly launched altcoin that has less than 10% of the supply circulating, like for example here on Igen Layer, chances are the investors still have a lot of tokens to be unlocked, which can add to the sell pressure, and that means price cannot go up that easily.

Here’s another example of Celesia, where it launched with less than 10% of the token supply in circulation, and after this initial run-up, it had a very long drawdown. Finally, price is starting to bottom out as more and more of the token supply is coming out.

Another good example is Toncoin. Remember how everyone all of a sudden were really bullish on Toncoin? This is because Ton had its market cap go up from $1 billion to $25 billion, doing a 25x and this made it go from top 70 coins all the way to top 10. However, from this one and a half year period, the price growth of Ton was only from $120 to $7 to $8, so that was only a 7x gain in price, whereas it was a 25x gain in market cap.

So people didn’t make generational wealth on Toncoin, but yet the coin itself went up a lot in rankings. This is because a lot more tokens got released to the market, and investors were actually able to take profit.

You can also compare tokenomics side by side for similar projects. For example, here we have Igen versus Aptos. We all know Igen is the hottest new layer one coin right now, and its supply circulation is okay at 27% of total tokens circulating. However, when we look at its closest competitor Aptos, we actually see that Aptos has much superior tokenomics because 46% of the token supply of Aptos is already circulating, so there is a lot less sell pressure coming for Aptos.

That’s why even though Aptos and Sui are both around the number 25 in top coin rankings and they have a similar circulating market cap, their fully diluted valuation is actually 2x away. So you can think of it like Aptos has twice as much growth potential in its fully diluted market cap versus Sui.

This is how a VC investor will see the projects, and this is the real metric that matters to follow the tokenomics of a project. You need to track the circulating supply versus total supply on CoinGecko or CoinMarketCap and also find out how to use a tool like Token Unlocks, which is now called TokenNist.

There are thousands of cryptos to trade, and if you don't know how to choose which ones, you need to learn how to research legitimate projects and how to pick winners. This leads me to my 11th important lesson: major exchange listings are still the best indicator for strong fundamentals of a project.

If a token is listed on Binance, Coinbase, Upbit, or OKX, typically they are of the highest caliber and are not scams. Bybit is the next option up, but they do have some sketchy coins on there. Now when I say use exchange listings, I don't mean for you to go on the exchanges and look for which altcoins have just newly listed on that exchange and you buy it right away. This is the wrong way to do it.

When an altcoin first launches on the biggest exchanges, even for things like Binance, they usually launch at a very high valuation. You can observe most of the projects on Binance Launch Pool. Most of these altcoins don't go up in price right after launch; they go through a downtrending period before eventually finding a floor. Instead of hunting new listings, what I like to do is I go on CoinMarketCap or CoinGecko, I use some other search mechanism, and I find the altcoins.

Then I go to their markets tab and figure out which exchanges have them listed. If it's an altcoin that's not that often talked about and it looks really bottomed, but it's already listed on Binance, Coinbase, Upbit, Bybit, etc., chances are these are quality altcoins, and they just haven't started a major marketing push. That is usually a sign that these projects have gone through tight due diligence and likely are not scams.

A very good example recently that I have just picked up is Orion Protocol. This is a project that had a lot of traction in 2020 to 2021 as a DeFi project, but now they're rebranding their token to a new name called Lumia. Instead of doing purely DeFi, they're doing centralized exchange and decentralized DeFi together, targeting RW. As you can see, this coin is pretty much bottomed out over the past two years, and the fact that it's already listed on Binance and Coinbase is a very strong sign that this coin will come around again in this next cycle.

The next important lesson, the 12th lesson, I want to teach you guys is to bet on the market leaders instead of the copycats. Take a look at the RWA category on CoinMarketCap. You see the top coins' performance here. Let's expand this, and here are the top RWA coins. You see here only a couple of them really stand out in terms of performance.

Over 30 days and over one year, it's even more apparent. The biggest winners here are number one, Mantra, and number two, Ando. In most altcoin categories, there are only one, two, maybe three top runners that will outperform everything else, and all the liquidity goes into those top coins.

This effect is even more apparent in older narratives like gaming that have existed for multiple cycles. Here are the top coins' performance in gaming. Let’s take out Not coin because that’s not a gaming coin, and Flaky is also not a gaming coin. You look at the rest of the top seven in market caps and see most of the gaming coins are not up; they are actually sitting flat on the floor over the past year. The strongest performer by far is Superverse, up over 1,600% over the past year, while IMX is up 184% and Gala is up 57%.

So you don't need to diversify into 10 other different gaming coins; that actually hurts your gains. You want to continue to bet on the market leaders, one to three of them in each category. In the layer one category, this is even more obvious. If you just bought Solana, you would have outperformed every single layer one out there except for S, maybe Aptos. That’s about it.

All other altcoins have not run faster than Solana. This same effect also applies to meme coins. Each ecosystem may only have two to three major meme coins maximum. When you look at the top meme coin rankings, you have Shiba Inu, Paye, and MOG being on the Ethereum chain. You have Dog with Hat, Bonk, and Popcat being on Solana. You have Flaky on BSC, and you have Brett on BAS; that’s about it. All of these others that are trying to come up will have hard competition going up.

That’s why in crypto, bet on market leaders instead of copycats. You have to understand why we talk about so many buzzwords: real-world assets, gaming, AI, layer ones. Why do people use these buzzwords all the time? This is because crypto investing is all about investing in the right categories, not in specific projects.

Let’s take a trip down memory lane. From the summer of 2020 to the beginning of 2021, the hottest category of altcoins, in fact, all altcoins that were going up the most were DeFi altcoins. As you can see, Maker out of one of the top 3 DeFi projects out there, gone up exponentially over that period. If you had been around at that time, you would know that if you launched a DeFi altcoin or if you just went on the DeFi category and picked any altcoin, you would have had 3x to 5x gains over that few months period.

Then fast forward to summer 2021. This was when Axie Infinity was going exponential from $5 all the way up to $150. This was the gaming and gameFi and metaverse hype wave. If you just threw a dart in the gaming category, all of your altcoins would have gone up 10x plus right after that. By the end of 2021, we also had the layer one wave, namely Solana, Avalanche, Luna, Phantom, a bunch of other layer one networks that were all going up a lot in price.

If you went on the layer one category during this time and picked just any altcoin, you would have had 5x plus gains in a matter of 3 months. Last but not least, in Q4 2023, when ChatGPT really became popular, AI projects like Bit Tensor started to go parabolic from $70 to $700. Again, if you had just gone to the AI altcoins and you picked anyone, it had gone up more than 5x, often 10x within a matter of 4 months.

The lesson here is that it's much less important to pick specific AI altcoins that can outperform the rest or specifically the best gaming coin. It's much more important to know which altcoin categories are strong and have a narrative going for them and will likely run during certain times, and usually these are bull market times.

Beginners will buy coins from very old narratives because they think they will make a comeback or they might buy very obscure narratives, and I have fallen trap to this before, like heavily investing in layer twos, or in social fi, or in NFT ecosystems. But if those have not shown strength in a previous uptrend, chances are they are not going to outperform other categories.

There’s a very handy tool you can use on TradingView. Under their main products, you go to the screener and you go to crypto coins screener, and on here you can filter by the altcoins with the strongest performance over 6 months, 12 months, or multiple year periods. You just need to glance over the categories, and you'll see there are only five main categories that most of these strong altcoins belong in.

These five categories are gaming, AI, meme coins, layer one, and RWA. These are the five categories that I will be heavily focusing on for this cycle. I have made multiple videos about my thoughts on this, that you can go ahead and check out on the channel, with the best altcoin sectors that I’m investing for 2025, as well as the most popular narratives for the 2024 cycle.

This next advice really applies to traders, especially swing traders: information advantage is key to crypto. This is the 14th advice I want to give you guys. You need to learn to look in places where it’s not obvious. If you’re curious about when the project drops its next release, you’ve got to search in its Discord. Someone might have asked if you want to buy the token in a pre-sale, but it’s not available on their Twitter. Go into their docs. Chances are there’s a private whitelist that you can sign up for.

Here’s a swing trade example that we have taken using this exact approach. Last month I was building a long position on Worldcoin, not only because of TA but also for a couple of different catalysts. Number one, there was the AI hype wave; we saw Bit Tensor was already running in price. Number two, OpenAI was about to announce a massive $6.5 billion fund raise, which they have announced a couple of weeks ago. Number three, Worldcoin was likely going to have some form of announcement in October.

This information was not immediately obvious everywhere, however, if you just look a little bit on a tool like CoinMarketCap or CoinMarketCal, you’ll see Worldcoin had their World Chain announcement planned for October, and this has been planned for multiple months already. Two weeks ago, Worldcoin started to make this announcement very public, and they even added that Sam Altman will be speaking at this event, and they will release something big.

So combined with all of this, we were able to take a swing trade setup on Worldcoin with average entries in the $1.7, $1.8, $1.9 range. We kept averaging down as prices went down, and now, obviously, this news is propagating to the retail audience, and Worldcoin is above $240.

The lesson here is that beginners usually wait for the price spikes and when the news actually breaks in order to enter positions, but one of the most underrated ways in crypto to invest and trade is to find these events early.

You don’t need to look that much further if you think there's an AI hype wave and Worldcoin has a release potentially in October. You just go into their Discord or their Telegram. Chances are people have asked those same questions, and their team will have answered. This is only possible in crypto because there is not that strict regulation about what you can and cannot tease to the public.

One of my most underrated videos is this one on how to do research using these top six crypto tools, and make sure to watch this video. I'll likely make a follow-up video to this on how to find catalyst events that you can trade around using swing trading.

Now, when you are deciding which altcoins to pick up and trade, you have to know one important rule of thumb. That is the 15th important lesson: new projects typically outshine the old projects. Again, let’s take a trip down memory lane and look at the historical data snapshot of CoinMarketCap.

Here we have the top altcoin rankings on CoinMarketCap on February 4th, 2018. This is the peak of the bull market two cycles ago. Anyone remember some of these altcoins? NEO, this was dubbed the Ethereum killer—none of them have killed Ethereum; in fact, all of them are out of the top 30 crypto rankings now.

Fast forward to February 2021, we have again the peak of another bull run. Here are the top coin rankings. Remember Polkadot? Everyone was calling Polkadot the Ethereum killer. Everyone was super hyped up about Cardano. Chainlink was still a top 10 coin because DeFi was apparently going to change the world.

Then finally we have February 2024, and now you see we have the new Ethereum killers, the new L1s, Solana, Cardano is still kind of up here, Avalanche gaining a lot of market share. Now, I'm not saying Solana is the next Cardano or the next NEO or the next whatever Polkadot.

I'm just saying even within the same category of layer one blockchains that aim to tackle Ethereum, this is not a new narrative. This is a category of altcoin projects that have existed for over 7 years now, and the stats show us that usually in the same category, the newer layer one projects will perform better than the older layer one projects.

That’s why you see Polkadot taking the place of NEO and then Solana now taking the place of Polkadot. The reason behind this is that new projects usually have stronger technology that they have adopted over the years, and because blockchain projects are inherently very difficult to iterate upon, if you start at a very base level, if you want to evolve your NEO or your Polkadot into the stage that Solana is at, you have to completely rewrite the blockchain, and most of the time that's not possible.

There’s also the side of token supply and what the founders have already achieved. New projects still have token supply to be unlocking, which means the project founders haven’t released all their tokens yet, and they haven’t received all their payout, and they will likely want to keep building a solid project, keep increasing the token price with whatever releases marketing that they can do in order to earn more.

This gives them vested interest in the company, versus if you're running a very old coin and you don't have any coin anymore because all the supply is circulating, you can't do much. Even if you keep pushing that project forward, you don’t make more money, and that's why a lot of these project founders give up.

So remember, new projects typically outshine old projects. You want to bet on the new ones instead of the super old legacy ones.

The 16th important lesson: crypto tokens go up in price from user attention, not based on project revenue or technology fundamentals. Let’s look at three coins in comparison, and I think these really represent three distinct categories. First one we have is Igen Layer. This is one of the most innovative projects in terms of technology; it's able to take Ethereum staking and apply that to reaking and allows anyone to launch layer 2s or different infrastructure projects by picking back off of Ethereum's security and that staking power.

Now that sounds very cool because I can summarize it, but I doubt that there are more than 10 people really in my YouTube comments that really understand what Igen Layer does and know how to use it. I don’t claim I can do that either. This is a classic case of the project fundamentals being too complicated while most people cannot understand it and they cannot really put a narrative buzzword on top of it like gaming, AI, meme coins, or RWAs.

Conversely, here is the exact opposite side of the spectrum with the Paye coin. There’s nothing technologically advanced about this; it's just a picture of a Paye. It has very fair token supply with all of the supply circulating. Yes, it’s trading at $4.3 billion in market cap, but there are no teams that will dump on your head because nobody controls any more of the token supply.

So why do people buy this coin? Well, some people will say, why would I buy this? There’s no utility. Other people will say the Paye meme is kind of funny. I can recognize what this is, and I can tell other people that this is funny. The fact that I know so many people around the world in English-speaking countries know about this Paye character, chances are they will look up the Paye name on Google; whatever they find, they might just buy some.

It's silly, I know, but hear me out. We’ll get into meme coins in a bit. Can you argue that this Paye coin is necessarily way worse and has no utility versus Igen Layer? You can’t, because Paye trades at $4 billion in valuation, and no matter how much Igen Layer brings in utility, if it doesn’t fit into a strong narrative, especially if the token supply is heavily controlled by investors, it's not going to perform well.

Okay, last but not least, the third L coin example I want to show you is Robit. This is a coin that I have mentioned multiple times on the channel, but I have given up on it in the first half of this year. TLDR: Robit is a crypto casino, and it’s one of the most profitable crypto casinos, and the RLB coin is their platform coin.

One of my core thesis was that the majority of the Robit casino revenue was going to be fed into this coin, but when everything pumped, their token was trading sideways and down. There is no reason for this to happen. In a traditional financial sense, if you’re investing in securities, you have full rights to the shares. You have legal rights, shareholder meetings, transparency reports.

You can calculate accurately earnings versus share ratio; you can calculate book versus share ratio. But in crypto, those numbers can be totally fake. Most of the time, coins don’t even distribute any revenue at all to their token holders. This is reasonable because most cryptos want to avoid being labeled as a security.

If you have a clear dividend structure, you fall into that category, and you have a lot of risk. So then the Robit project really tells us that the revenue focus and how you typically value a securities or stock-based business does not apply to crypto. Most of the time, you cannot look at revenue projection and think about how those numbers will translate to PE ratio, and thus the coin price going up.

That is much less important than the narrative of the coin and the tokenomics or the supply issuance of the coin. So the moral of this lesson: do not overanalyze project fundamentals. The only fundamental research that is worthy to do is when you’re doing due diligence on the project: is the team legitimate, and are the tokenomics sound, so the project will not scam?

Once the project passes the safety check when they’re listed on good exchanges and they have good tokenomics, that’s all that matters. You don’t want to overthink about the technology or the revenue projections; you want to focus on betting on the categories that matter and betting on the category winners by finding out which coins have the strongest performance.

Okay, like promised, we’re going to talk about meme coins, and my number 17th important lesson is: meme coins definitely have a place in the market. Remember, in crypto, a larger community equals more price growth. This means more people that see the coin and understand what that coin is, and especially if they believe that narrative is interesting, they are likely to buy the coin.

Meme coins, by design, are the easiest to spread to a wide community. At first, you probably think, it’s a meme coin, it’s a joke, it’s a picture of a dog, a Paye, a MOG with glasses—why would I actually buy it? In my opinion, there are two camps of meme coins.

The first category is just typically memes or cultural icons—things that you recognize. This brings us back to the Paye example. When you see the Paye, you know that this is an interesting meme. A lot of people will search for this, and a lot of people will recognize it, just like a lot of people have recognized Dogecoin and they continue to hold Dogecoin.

That’s the first category of meme coins overall that I like to think make sense. You have things like MOG, which is a very common saying in the new generation; MOG is like a slang word for flex in a very U.S. Gen Z type of way. Wojack is another example, one of the most OG memes on the internet, and widely used for multiple generations. You have many of these sayings like “lock in”—time to lock in; this is a very common saying people have on TikTok.

You have Aura: you have this aura around you, or plus aura, or I have the aura. These are all popular sayings in pop culture that people recognize, and thus they become meme coins and they trade at certainly high value.

The second camp of meme coins, I believe, falls into prediction markets or betting on things that you can spin up easily as a cultural icon. For example, political memes—going into the election, if Donald Trump gets more and more popular, chances are the Trump-related meme coins like MAGA are going to go up because people believe Trump will win.

Or whether they believe so or not, or they like Trump, they might buy his coin because they also believe more and more people will fall into this same belief. You have meme coins for Joe Biden, and as you can see, this coin peaked in April and has only been going down since as Joe Biden has dropped out of the candidacy and has been slowly deteriorating into an old man.

You also have K or Kamala Harris’s meme coin on Solana, and this one really started to pick back up when she was pushed ahead as the new candidate, and this made a peak in all-time high in July. These next things are pretty much like prediction markets, where anyone can get into.

Of course, it’s not completely obvious and completely fair like a real prediction market on Poly Market, but nonetheless, if you believe something is going to be interesting, you can make a meme coin about it. If other people also think it’s interesting, and especially if that circumstance becomes true or if whatever you’re trying to create in that meme coin's branding comes true, then that meme coin will be popular.

Just imagine if Trump wins the election—chances are the MAGA coin will continue to be pretty big, and if Kamala Harris wins the election, well, the MAGA coin probably will go down in price because you don’t have a president’s coin; instead, you just have Trump’s coin. Conversely, if Trump wins the election, Kamala Harris is going to fade into complete irrelevance, and the Kamala coin is probably going to zero.

In that sense, I do believe a prediction market mechanism does exist for meme coins, and that’s a cultural value that you can assign to meme coins. There is a place for them.

Okay, but if you trade like a degenerate all the time, you will eventually get back all your profits. So in this next chapter, let’s learn the best strategies to protect your gains. The 18th important lesson is: you need to form your own exit strategy before the bull run starts.

Like I mentioned earlier, don’t fight the trend and exit the market when the time is right and when Bitcoin starts to show a downtrend. We can all look at those patterns now and say, yeah, I will do this. The problem is, by the end of the bull market, you're so used to the uptrend.

You’re used to way too many weird sayings like the super cycle or this time is different or the Fed and BlackRock is buying Bitcoin. Then you get a dip, and you think it will recover, but then it keeps dipping and dipping, and you’re fighting the trend because you don’t want to sell too early.

You need to set realistic expectations before the euphoria happens and know when to walk away. I have made two bull market exit strategy videos on Bitcoin already, and I made these videos last year way before Bitcoin started its run. You can check them out in these two videos; I’ll have them linked in the description. I go over my Bitcoin price prediction right around $200k to $250k, and I also have time-based exit strategies in case the bull run extends way into 2025.

I also want to limit myself for how long I stay in the market. Even if you are a diamond hands believer of some altcoin like I was, I was a big believer in EVM layer ones that were good for DeFi and gaming, and this has led me to hold on to three altcoins way too long: namely AVAX. I held it all the way from the top over $100 to the bottom at $10, and I held Arbitrum way too long because of the L2 hype.

I also held on to Polygon way too long from over $2, and I believe I exited when it was 70 to 80 cents. Don’t fight the trend. Have a strategy and know when to walk away.

The 19th important lesson that’s very related is: you want to always stay liquid. Crypto is all about accessing liquidity at all times, so you can buy and sell at any time using a decentralized exchange. If you want to cash out, never lock up your liquidity in a long-term product like passive income, time-locked staking, etc.

You can provide liquidity; you can do normal staking, but make sure you have the flexibility to withdraw at all times. I fell victim to this by the end of the 2021 bull run during the Polkadot crowd loans. Here I am hosting a livestream going over all the top Polkadot crowd loans. If you’re not familiar, this is a mechanism where you had to lock up your DOT tokens and receive these Polkadot parachain projects.

Most notable ones are Aala, MB, Moon River, etc. The catch here is that these numbers looked good then because Polkadot was at its peak of hype and it was trading at over $40, which meant all of these parachain projects were supposedly going to be very big projects as well. But as I have gotten to know multiple years after locking up my money in DOT was a terrible mistake.

Polkadot went down another 90%, and so did all these parachain projects. In the end, I didn’t even break even, and my money was locked up for 2 years. You can still find these old live streams on my channel from 3 years ago. You really see the full evolution of what I have gone through to make all these mistakes hands on.

That’s why it’s important to always stay liquid and don’t lock up your liquidity in a long-term position.

Finally, when you’re ready to create your portfolio, you can go on my channel and check out my portfolio videos. I just released my updated portfolio one month ago, going over 25 different altcoins I have on here.

For the second last important lesson, I want to recommend everyone to always have at least 50% of your portfolio in large caps—namely Bitcoin and likely Ethereum and Solana. For me, this helps curb the FOMO if the market starts to run hard.

For instance, for the majority of this year, even though most altcoins were going down, whenever the market pumped, Bitcoin was still going up, and Bitcoin was holding its floor relatively well. So you always have the steady gains from these established assets. Even if I lose hope and sell the altcoins, I still have my Bitcoin gains in crypto.

People think that’s a boring idea, but just look at the Bitcoin price growth from 2022 to now. It went from $16,000 to $66,000, over a 4x gain. These types of gains are crazy in a traditional investor's eyes. If you have strong conviction in crypto like I do and believe Bitcoin is heading much higher, why would you not hold Bitcoin?

I also encourage everyone to start denominating your portfolio in terms of Bitcoin. This lets you see the real picture. Are you able to outperform the price growth of Bitcoin, or is your portfolio actually going down in value versus Bitcoin? Imagine doing all this work finding gems just to get beat out by holding Bitcoin.

I also believe holding Ethereum and Solana covers you for most large-cap altcoin gains unless you really know what you’re doing, and you’re able to rotate between narratives all the time. You know exactly which narrative is going to be popular when.

Chances are your individual altcoin pick in the large cap rankings, I’m talking about top 30, top 40 altcoins, they are unlikely to outperform Ethereum and Solana by the end of this cycle. This is because most other altcoins are still fluctuating all the time.

So whatever gains you have made, you have to consider—you have to buy at a very good time and sell when that narrative gets unpopular, and rotate into something else. When you consider everything together, the high probability of Ethereum and Solana doing well in this cycle outweighs the rotating around you have to do in large-cap altcoins.

The last benefit of having a large percentage of your portfolio in Bitcoin, Ethereum, and Solana is that it helps reduce the panic if prices drop. These market leaders will not have unreasonable drops or liquidation wicks like the smaller altcoins do. Having these high conviction assets in your portfolio also keeps your sanity in check.

No matter how bad the market gets, most investors believe in the long-term growth of Bitcoin and can have the conviction to just hold through those choppy times no matter what.

Finally, my last important tip to protect your gains is do not forget about taxes. People think they can just stay on-chain and stay anonymous forever. This is very dangerous depending on where you are at. Not only are crypto cash outs into fiat currency considered taxable, but also now trading crypto to crypto on centralized exchanges and even decentralized exchanges are considered taxable.

Now obviously, you should consult a tax professional for actual advice, but I’m just saying do not forget about taxes. A lot of people get burned by this, especially in crypto due to the multi-year bull and bear markets. People make way too much money that they haven't seen before in the bull market, and they spend all of it or they get it all locked up.

What they don’t realize is that you could be owing a large amount of taxes in the year after, which is usually the bear market year. So what you end up having to do is you get hit by the tax bill, and then you have to sell all your coins at a loss that you haven’t realized in profit in that bull market year.

So make sure to plan ahead and know how much taxes you need to pay in your gains, and make sure you have that prepared in the bull market year so you don’t get burned in the bear market year.

Okay, these are all of the 21 most important lessons that I have learned over the past 6 years of trading and investing in crypto. Now you are a better crypto investor. If you like this content, make sure to subscribe to the channel, and also follow me on Twitter or X at @virtualbaconZX.

This is where I drop day-to-day alpha before I make them into these in-depth videos. Also, make sure to join our VIP program called the Coiners. This is our trading community that's completely free. You just have to sign up to one of our exchange partners.

We don’t force you to sign up with anyone; we want to accommodate everyone. In here, we have chats, my personal trade setups, signals, and five other different analysts. We’re hosting live streams, and we have free courses. I have made over 5 hours of course content that’s offered for free in our community, so sign up today. Go to the Coiners.io or go to the link in my bio.

Thank you for watching, and I’ll see you on the next video.