A lot of people have recently lost hope that this bull cycle will continue.

Given that many top altcoins are down over 60% in the past months, you can’t really blame them. It’s hard to survive in this market during dips like this.

Yet there are a lot of things that indicate that this cycle is not over.

Of course, nothing is guaranteed to happen in financial markets. But I do believe that the risk/reward of being bullish here is very attractive.

In this issue, I’ll cover why I expect an altseason to happen later this year and what I’m doing now to maximize my profits during the next parabolic phase.

Let’s dive in👇

Why I remain bullish on crypto

There are lots of reasons for this.

But in short, these are the main ones:

• The stock market is at all-time highs
• FED rate cuts are expected later this year
• The total stablecoin supply keeps increasing
• The main US presidential candidate is now pro-crypto
• TradFi institutions (👋BlackRock) are starting to pay attention to crypto
• ~$16b in cash will be distributed to the FTX creditors in the next months - and many of them will likely deploy this capital into the market

Q3 is historically the worst quarter for crypto, and this might explain the recent dip.

Source: CoinGlass

Yet I’m very excited for Q4.

With the US elections, FED rate cuts, and FTX cash redemptions scheduled for Q4, I can’t imagine a scenario where BTC has already topped.

So far this cycle, BTC dominance has gone up only. An altcoin season generally starts when this trend reverses, and I think this could happen in Q4.

THE NEXT-GEN CRYPTO WALLET

Let’s be honest:

To onboard the next 100M users, crypto needs way better wallets.

The launch of hundreds of different L1 and L2s has led to a very fragmented on-chain user experience, making it very hard to bring new users on-chain.

Enter Ctrl (formerly XDEFI) - The web3 wallet built to offer the best user experience

Its team has spent the past years building a new wallet from scratch that offers:

• An unified portfolio — manage all your assets from all your accounts, on all chains
• Gas Abstraction — pay for all on-chain fees across all supported chains from a single balance of $USDC or $XDEFI
• Lightning fast setup — Get started on Ctrl using social logins in less than 15 seconds

XDEFI Wallet has recently rebranded to Ctrl, an accessible brand for everybody with a design-led and user-focused product.

The mobile beta for Ctrl is now open for sign-ups.

Betting on the right projects

Now that I shared my bull thesis, I also want to talk about my strategy for identifying tokens that could be top performers during the next market phase.

A great method to become a better investor is to study the market's past.

For example, the best way in my opinion to learn how to catch 10x gems is to first analyze what the tokens that have already done a 10x had in common.

In the last bull market, these 5 coins delivered more than 100x returns:

• SOL - The coin of Solana, the most popular non-EVM blockchain
• LUNA - The coin of Terra Luna, the project behind an algorithmic stablecoin experiment that ended up going terribly wrong
• MATIC - The coin of Polygon, one of the most popular Ethereum L2 projects
• SPELL - The token of Abracadabra.money, a DeFi lending platform that enabled some very high yield degen strategies
• FTM - The coin of Fantom, the blockchain with one of the fastest growing ecosystems during the 2021 mania phase

I believe their huge success can be attributed to a few main factors:

• Cult leaders - Do Kwon was the cult leader for LUNA. Andre Cronje was the cult leader for FTM. Daniele Sesta was the cult leader for SPELL.

All these 3 people were charismatic and managed to build a strong community around their projects. A founder with a strong good media presence and a great personality can significantly contribute to the success of his project.

Retail loves the idea of investing in projects with strong cult leaders.

Most projects with cult leaders don’t do well in the long run - but until the bull run ends, you can make huge amounts of money by betting on those.

• Innovative product

There’s no need for a new Uniswap fork.

Your best chance to make it is by betting on innovative projects that keep pushing boundaries and don’t just copy-paste their competitors.

This doesn’t mean they must build something completely new.

But ideally, you want to bet on a project that is building a product 10x better than its competitors and is also shipping at a much faster rate.

A good example that comes to my mind is Pendle.

Pendle was the first yield trading protocol that enabled trading airdrop points, and it massively benefited by making this possible for the first time.

And the fact that its team is constantly announcing integrations with trending protocols has helped Pendle to remain the largest yield trading protocol.

• Partnerships with web2 and/or web3 giants

Retail investors love to see their projects announcing collaborations with other big web3 projects or highly popular web2 companies.

Polygon, Solana, and Terra Luna attracted a lot of attention by doing that.

Partnership announcements can lead to some big token pumps during a bull market.

• Decent token utility and low token emissions

SOL, MATIC, FTM, and LUNA were all used for paying gas fees and securing blockchain networks, while SPELL had a revenue-sharing model.

Simple governance tokens like UNI also did well in the first part of the 2021 bull run.

However, I believe that most outperformers from this cycle will not be simple governance tokens and will have some additional utility.

A few examples of potential token use cases:

• Fee discounts

• Revenue sharing
• Paying network fees
• Buyback & burn mechanisms
• Boosted rewards for the protocol users
• Access to exclusive products (e.g. access to web3 launchpads)

Memecoins are obviously an exception to this rule and they can perform very well even without any utility. But besides memecoins, I generally avoid buying coins that don’t have some kind of utility.

The vesting schedule is also important to check. You don’t want to buy a token with a circulating supply that will increase by 300%+ over the next 365d.

Major token unlocks can significantly affect the price of a token as has happened many times this year. You can use a tool like Token Unlocks to monitor the upcoming unlocks and the vesting schedules of 100+ tokens.

A high % of a total token supply already being in circulation is a good thing.

• Major catalysts on the horizon

A few examples of catalysts that can positively impact the price of a token:

• A big protocol upgrade
• A tokenomics upgrade
• Token Listing on a big CEX
• The launch of a new product
• A fundraising announcement
• A major partnership announcement

Catalysts can significantly boost a token price performance, and that’s why I generally try to invest only in projects who have a big catalyst in the near future.

One question I always ask myself is the following:

Why would someone buy the same token as me but at a higher price?

If I can’t find at least one great reason, I no longer buy that token. High-conviction bets are the ones that can truly make you rich.

My plan for this cycle is to hold up to 10 coins that meet the above criteria. Over-diversification is not worth it if you know what you’re doing.

Airdrops: Are they still worth farming?

A lot of people have been disappointed by several hyped airdrops lately.

LayerZero is a recent example. As airdrop farming gained more popularity over the past years, many airdrop opportunities are now highly diluted especially due to the appearance of industrial farmers.

As a consequence, nowadays most airdrops have a linear distribution and are no longer based on a tiers system (like Jito) in order to avoid rewarding industrial farmers.

Is a linear distribution for airdrops a bad thing?

The issue is that whales are the ones who benefit the most from airdrops with linear distributions, which is not great for users with low capital.

Turning $1k into $50k by farming airdrops is now almost impossible. But I believe you can still make some good money by farming the right ones.

The main criteria I’m looking for in tokenless protocols are the following:

• Strong community - the more active a project’s community is on X, the higher the valuation of its token could be
• Has raised money from VCs - the more money its team has raised in funding, the higher the valuation of the protocol’s token will likely be at launch
• Has a low TVL / Total Money Raised ratio in comparison with other tokenless projects - The lower it is, the better, as a high ratio might indicate that a certain airdrop opportunity is overfarmed

Polymarket is a great example of a protocol with an excellent TVL / Total Money Raised ratio.

Ideally, farm the airdrops of protocols that people use because they find them genuinely useful, rather than solely for airdrop farming purposes.

What about taking profits?

Every bull market creates a new generation of millionaires.

Yet data shows that 90%+ of these ppl end up giving most of their profits back to the market because of greed. That’s why you need a realistic exit plan.

For long-term positions, I take profits primarily based on fundamental triggers.

Whenever I start seeing multiple top signals that have indicated a top in the previous cycles, I begin selling using a Reverse Dollar-Cost Averaging strategy.

Reverse Dollar-Cost Averaging is the opposite of dollar-cost averaging - and it involves selling the same amount of tokens at regular time intervals.

A few good top signals I pay attention to:

• Jim Cramer is continuously shilling crypto
• Coinbase becomes the no. 1 app on App Store
• Your friends and family start talking about crypto
• Several celebrities are starting to launch their own coins
• People are flexing Rolexes & expensive cars on your X timeline
• Useless projects raise dozens of millions of dollars in funding
• Financial YouTubers are starting to talk about crypto very often
• Google Search Traffic for “crypto” skyrockets and hits new ATHs
• Ponzi Farms which offer 5-digit APY rewards are attracting billions of $ in TVL

The only top signal we’ve seen this cycle so far is celebrities launching memecoins. This makes me think we’re still early.

Taking profits when BTC or your altcoins hit certain price levels can also be an effective strategy. But it’s much harder in my opinion to identify the right price levels where it’s indeed a good idea to sell.

I wrote more about taking profits in this issue:

Closing thoughts

I always try to be realistic, so here’s what I think:

Making it in this bull market will likely be way harder than making it in the past cycles. A reason for this is that the no. of crypto tokens skyrocketed.

Source: Miles Deutscher

It’s becoming more and more complicated to find good investments.

On top of this, the price discovery for many new high FDV coins is now happening in private VC markets. It’s becoming harder for retail investors to find tokens that can do a 20x or a 50x due to the outrageous launch valuations of most new tokens.

This doesn’t mean that there are no longer opportunities in crypto.

But you have to put in way more effort and time to identify them. If you’re willing to do that, there’s a pretty good chance you won’t regret it.

That’s all for now.

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Until next time,