Home > Daily > 🥛 The secrets to picking winners in crypto investing
April 27, 2022

🥛 The secrets to picking winners in crypto investing

GM. This is the Milk Road, we tell you what’s going on in 5 minutes, so you can spend the rest of your day figuring out who closes the bus door when the bus driver gets out. 

Catch up on everything we got today in just 2 minutes and 49 seconds:

  • 💰 Lessons from a top crypto investor

  • 👀Bitcoin meets retirement plans

  • 🍗 Quick nuggets

  • 😂 Meme of the Day

LESSONS FROM A TOP CRYPTO INVESTOR

Richard Chen is a prolific investor for 1Confirmation. They’ve done investments in big projects and companies like Opensea, Polkadot, and a bunch more. 

Here’s a few of his key points on investing in crypto companies: 

1) Beating ETH is all that matters

The easy move is just to bet on ETH and chill. 

If you’re going to “actively” invest, you better believe you’re outperforming ETH (and measure performance as “returns above ETH”) 

Last year, ETH went up ~15x. So it was pretty damn hard to beat. Most people are better off just buying ETH and holding. 

2) Look for “Dialectics”

A dialectic is when there are opposing truths at the extremes. 

For example, in crypto investing, the best risk-reward is very early or very late. 

Very early lets you get in at a cheap valuation. Unproven, but good valuation. 

Very late lets you get into the obvious winner, and even though it seems expensive, it’s likely a good bet. An example here is OpenSea. The series A valuation was $100M. It seemed a bit expensive, but in retrospect, that was a steal. it was the obvious leader of NFTs and is now worth $10B+ 

3) The golden question: Ask the founder to walk you through “the idea maze” 

In a hot industry, you will see 50 founders working on similar ideas. How do you pick the winner? One way is to ask them to walk you through the “idea maze.” If you haven’t heard this term, check this out. The idea maze is the journey someone goes down while figuring out the right solution to a problem. 

Founders with shallow thinking are just copying other people. They haven’t gone through the idea maze the same way as a founder who is really living & breathing this space. 

Oh – and he ends the post with a take so hot, it burnt my lips: 

He says that all the crypto VCs showing huge paper gains right now are going to underperform ETH by the time those gains are realized. 

If you want to read the whole thing check it out here.

BITCOIN MEETS RETIREMENT PLANS

Fidelity announced it will let people put up to 20% of their retirement savings allocated to Bitcoin through their 401k plans.

It’s called the Digital Assets Account (DAA) and will be available later this year. 

Michael Saylor announced that MicroStrategy will be the first company to use the new product. 

But they aren’t the only ones interested. 

Anthony Scaramucci also tweeted out that his company, SkyBridge will also offer BTC as part of its 401k program soon. 

He also had this to say:

The Milk Road's Take: This is massive news. There are ~23,000 companies that use Fidelity for their retirement plans. They hold ~$2.4T in 401k assets, which is about ~33% of the market. And 401k investors are inherently “buy and hold” investors. This is big for Bitcoin! 

TODAY'S MILK ROAD IS BROUGHT TO YOU BY FTX US

I’m sure you’ve heard of FTX US by now, whether it’s because of all of the new products they've launched (we talked about their white label product here), their Super Bowl commercial with Larry David, or their Founder, SBF, on Twitter.

FTX US is a safe, regulated way to buy Bitcoin and other cryptocurrencies, plus you can trade crypto with up to 85% lower fees than any other exchange on the market. You can even buy NFTs on the FTX app from top ETH and Solana collections without getting hit with fees. 

Simply put, FTX gets it and makes crypto exposure accessible, easy, and secure.

Download the FTX app on your phone today, use code MILKROAD for free crypto on every trade over $10, and start building your portfolio in less than 3 minutes. It’s that easy.

Sign up here!

QUICK NUGGETS

Optimism officially announced the details of their upcoming airdrop.  The cool thing is they're gonna have a few more airdrops that you can still qualify for.  Check out how here.

USDC.Homes completes the first uncollateralized crypto mortgage loan in Austin, Texas. They’re a company that offers unsecured DeFi mortgages. The new owner took out a $500,000 USDC stablecoin mortgage on a condo valued at $680,000.

Topps, the trading cards company, is releasing their new MLB NFTs on 4/28 at 1 pm EST. There will be 25k standard packs ($25) and 11k premium packs ($150). 

GamerGains, a play-to-earn gaming platform, raised $5.8M. The cool thing about this is that gamers can earn crypto rewards by playing popular games like Elden Ring, Grand Theft Auto, Apex, and more. Just connect your Xbox or Playstation to their platform and start completing challenges to earn money!

Fort Worth City Hall is gonna mine some bitcoin. They’re launching a pilot program to set up 3 mining rigs in Fort Worth City Hall. They’re expecting mine enough bitcoin to cover their electricity bills!

Chess.com is releasing a new NFT marketplace called Treasure Chess. The platform lets users turn a chess game played on treasure.chess.com into a Treasure NFT that can be minted and sold.

MEME OF THE DAY

Fun story. I tried to give my cousin 2 ETH back when it was ~$130 for his wedding, but my mom told me that was weird and to just give a normal gift. Fast forward 3 years, and now he’s still got a nice knife set instead of $6K! 

CHART OF THE DAY

Someone once said follow the developers to find gold, so check this out:

See ya tomorrow!

Shaan "Chocolate Milk" Puri and Ben "2% Milk" Levy

A Review from the Road…

What'd you think of today's email?