How to invest like a robot in the crypto market?
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How to invest like a robot in the crypto market?
Some cryptocurrency investment rules and principles to help you conquer the next bull market.
Navigating Web3 tides with focused insightsWritten by: Jake Pahor
Compiled by: TechFlow intern
I apply the same framework to both my crypto and stock investments, though with slightly different approaches. Here’s an article breaking down some of my cryptocurrency investment rules and principles—to help you conquer the next bull run!
I like to think of investment decisions in terms of "if," "or," and "then"—almost like programming code. Below are my six crypto rules.
1. Understand the macro environment
Take time to analyze the market and where we stand in the cycle. As the saying goes, "Don’t fight the Fed."
- if central banks are raising interest rates and selling assets to combat inflation, then we’re in a typical risk-off market
-then, play defense: hold more cash and focus on fundamental crypto projects with positive cash flow or strong backing
- if central banks are cutting rates, buying assets, and promoting inflation, then we're in a typical risk-on market
- then, you can focus on larger crypto projects with higher risk/reward potential
2. Create a market watchlist/scanner
Maintain the habit of creating a watchlist on Coingecko for all the projects you're interested in. @thedefiedge shared a great post explaining his token evaluation framework. Below are key research points you should pay attention to:
- Are they generating revenue?
- What's in the protocol's treasury?
- Locked value (TVL)?
- Utility and use cases?
- Roadmap?
- Team and funding?
3. Time your buys
I have three simple steps to determine whether I should buy a token.
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Has the project passed all checks from step two (i.e., met my investment criteria)?
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Look at the chart from a technical analysis perspective—use whatever TA method you prefer.
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Only allocate what you can afford to invest, then buy!
4. When to exit
Selling your tokens can be extremely difficult—especially during a booming bull market. It’s crucial to set clear rules and target prices before you buy.
For $BTC and $ETH (moderate risk), here’s a simple example using BTC:
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Initial investment = $100,000 (bought 5 BTC at an average price of $20,000)
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Target price 1 (2x) = $40,000 → sell 1.25 BTC (25% of initial position)
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Target price 2 (4x) = $80,000 → sell 1.25 BTC (25% of initial position)
Total profit = $100,000—the return of your initial investment.
Given my long-term confidence in BTC and ETH, once I’ve recovered my initial cost basis, I’m happy to hold the remainder.
Here’s a brief example for an altcoin (high risk):
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Initial investment = $100,000 (bought 5,000 tokens at an average price of $20)
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Target price 1 (2x) = $40 → sell 2,500 ALTS (50% of initial position)
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Target price 2 (4x) = $80 → sell 1,000 ALTS (20% of initial position)
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Target price 3 (6x) = $120 → sell 500 ALTS (10% of initial position)
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Target price 4 (8x) = $160 → sell 300 ALTS (6% of initial position)
Total profit = $202,000—more than double your initial investment! Due to the higher risk, I prefer to take profits incrementally on altcoins.
5. Diversify and scale
It’s important not to put all your eggs in one basket, so here are some simple rules to manage your portfolio:
- No more than 35% of your portfolio in BTC or ETH combined
- No single altcoin should exceed 15% of your portfolio
- Diversify across multiple sectors (L1s, GameFi, NFTs, DeFi, etc.)
- Limit degen tokens to around 3–5%
6. Re-evaluate your rules
This is the most important step. Investing is a journey. As you grow and gain experience, you’ll need to adjust your investment rules. Given how fast crypto evolves, staying agile is key—don’t get locked into a fixed mindset.
Summary
These are rules I've developed based on my own investment style, financial situation, and risk tolerance. Everyone is different, so defining your own rules is essential!!!
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