Expert tips: an investor who got in when Bitcoin was $10

Ray Tong’s favorite trade
He knows it sounds crazy to some people, but Tong hasn’t sold any Bitcoin since 2014. At first it was simply because he didn’t know how to handle the tax implications of taking profits, but as Bitcoin’s potential as a store of wealth emerged over the years, it became a strategy. “I just kept buying and held off selling,” he says, laughing. “Which obviously helped tremendously with the 2017 bubble. So the best trade I’ve done is probably literally doing nothing.”
Resist FOMO
No matter how good your timing is, you’re never going to be perfect. You’ll regret getting into rising coins late and not abandoning sinking ones sooner (or leaving a position that later rebounds or a whole host of other scenarios). Even Tong, who got into Bitcoin when it was less than a tenth of a percent of its current value, remembers feeling like he had missed out because he didn’t buy sooner. “One thing that helps is setting targets,” he says. “Say Ethereum is $500 now. Set a target to sell maybe 10 percent of it when it hits $1000. And 10 more percent when it hits $1500. Having that kind of framework is really useful.”
Set boundaries
Sometimes friends ask Tong to suggest a good amount of money for them to put into cryptocurrency, but he thinks they’re asking the wrong question. Instead, they should be thinking in terms of the percentage of their own investment portfolio (and ultimately net worth) they want to devote. “Once you've come up with that number, you can break it down even further into three buckets — the percentage you want in Bitcoin, the percentage you want in Ethereum, and the percentage you want in all the other coins.”
Track your holdings
Tong suggests either making a spreadsheet or using one of the free tools available online to keep track of your holdings and make strategic decisions. He uses a web and mobile app offered by the crypto market-info site CoinGecko. “They provide literally every coin and every ticker symbol,” he says. “And you can just manually type in how many coins you own and quickly see how they’re performing against each other.”
Research, research, research
Tong reads the major online cryptocurrency publications like Coindesk and Mercari, but says the only source that moves at the speed of crypo is Twitter. Among his favorite follows are people from major funds who have access to vastly greater analytical resources than any individual trader. A few of his suggestions include Three Arrows Capital founders Su Zhu and Kyle Davies and the Spartan Group. “I also follow pretty much the whole team at Paradigm – they’re brilliant and the stuff they post is super technical,” he says. “If I read their posts and don’t know what they’re talking about, it forces me to dig in.”
Think Bitcoin, not dollars
It’s not easy to do, but Tong suggests shifting your mindset so that Bitcoin or Ethereum becomes your crypto portfolio’s base currency, as opposed to always thinking about its value in U.S. dollars (or whatever your main fiat currency happens to be).“Try to find the currency you believe in the most and make that your base currency,” he says. “So don’t worry as much about your holding’s value in dollars [from day to day], worry about making trades that ultimately result in you getting more coins. A lot of big firms are actually starting to do this.”