51. If Your Crypto Portfolio Is Down, Here's How You Can Turn It Around

And this is the number one mistake that we see people make. People only invest when the markets are skyrocketing. So as the markets go up, people get excited, they get fomo, they think you can make all this money. But buying when the market's going up really rapidly is the absolute wrong time to be buying. Welcome back to another episode of the Benneberg show, where we talk everything, crypto, business and personal growth. And today we're talking about a common problem we see that's happening to a lot of crypto investors that invested at the wrong time and their portfolios are down 50 to 75%. We've both been there, we've been in crypto for a long, long time. But there's some common problems we're seeing with investors when they are seeing their portfolio down this amount of money, they don't know what to do. There's some common mistakes and then there's some solutions that they're probably not aware of that we thought would be an amazing opportunity to share those lessons in this episode. And we're getting a lot of this feedback from our members. And also we do a lot of strategy calls with a lot of different investors. So. And we've got a lot of data. And today we're going to really share some potential solutions to help you if you're down in your crypto portfolio.

Absolutely. And big not financial advice warning on this one. So this is not personal advice. It is not financial advice. Please seek that of your financial. Yeah, well, your financial planner advisor, registered person. And again, these things can be valuable to you because this is what we're seeing from a lot of people and the things that we've learned and take those to your professionals and, yeah, I reckon you'll be doing well.

So the first thing you need to understand, if you're new to crypto or if you're down, you know, a considerable amount of your portfolio is that crypto runs in cycles just like any other market. Although in crypto, it's a lot more volatile. So you get a lot deeper bear markets and you get a lot more bullish bull markets. And right now we're in a pretty deep bear market. We have been for about a year. So, you know, if you're down 50, 75% in a bull market, I'll probably be a little bit more concerned. But the reality is, like, we've. We've both been in crypto for a long time now. Your portfolio does go down quite considerably in a bear market. Yeah, that's just a part of the game it usually runs on these four year cycles every four years is a bitcoin halving, which basically means that the amount of bitcoin that is produced by the blockchain halves every four years, which reduces the supply of bitcoin coming into circulation. And usually about six months either side of that bitcoin halving produces some bullish sentiment and the market starts to return. Now we're about a year ish away from that. It's happening early to mid next year, so we're on the downwards slope for that. But that's not to say that your portfolio might not be set up for success. We're going to talk about a few of the common mistakes I'm seeing investors make. Anything else on the cycles there that I missed?

I reckon you will see the means everywhere about Diamond Hands and this is why. So if you hold through multiple cycles, we've seen over time and you're accumulating along the way, it's a very decent strategy. It's challenging and this has happened to all of us because it's either your first investing experience or it's hyper volatile where you'll buy something, it'll be down 50%, you'll be like, oh, this is going to zero and I'm going to sell. Happened to me. Happened to you. I wish I held all that, held it for a longer time and understood longer term market cycles.

Yeah, it's a good point. And this is the number one mistake that we see people make. People only invest when the markets are skyrocketing. So as the markets go up, people get excited, they get fomo, they think you can make all this money. But buying when the market's going up really rapidly is the absolute wrong time to be buying. That's the time to be selling.

That's exactly it. And the classic quote is be greedy when others are fearful and fearful when others are greedy. So if your mates are starting to talk about crypto and your Uber driver and you're starting to wonder which boat or house you're going to get, maybe it's time to start averaging out how.

To say it and not getting too caught up in the fomo. If you're not, you know, especially with altcoins and stuff like, if you hear all these stories, people making all this money, remember that's only 1% of the. The story is probably 95, 99% of people, they're actually losing money. You only tend to hear the good stories of the bad ones.

And that's it. People can be making money on paper, but have they sold? And if people are telling you they've made money, okay great, but who are they selling to make sure that person isn't you, make sure you're not on the other side of that trade spot.

So look to dollar cost average and build your portfolio in the bear markets like now. Right. So a lot of people that are down this size portfolios actually haven't bought anything in the bear markets. I've only bought in the bull markets. Right. So you need to consider potentially like do you need to add more capital to your portfolio? Decide to buy lower asset prices. The idea of, you know, investing is buy low, sell high. Easy said than done. But you know, if you're buying hide and not buying low and you considering selling low, we're doing the absolute opposite of what you should be doing.

Exactly. And a simple use case, if you bought Bitcoin at 60 grand, it's now 20. If you buy another bitcoin, the average price comes out somewhere in the middle and you buy another one, it comes lower, lower, lower and more. If you buy a 10 bitcoin, let's say you're really rich by 10 bitcoin, that price is much closer to 20 grand than it is to 60 grand when you first bought.

Yeah. Next one. People buying cryptocurrencies blindly off someone's recommendation, usually friends or influences. Now not to say that we haven't been there because I certainly have back in when I first started and I can guarantee you it is the worst thing to do.

Mate, the amount of a hundred dollar Ethereum I put into ICOs is now worth zero. If I would have kept that shit mate, I'd be retired.

Everyone's got the latest coin, everyone's got the latest ethereum killer. All the influencers got their latest coin that's going to 50x100x. Most of that information, most of that advice is complete bs, right? The reason it's BS is because it's not research backed. It's very sentiment driven. Some of these people are probably being paid to promote that token as well. You don't know about it.

Look, they're always being paid, always. Let's, let's be honest, promoting a token, you always need to think what is this person's incentive to talk about this token? Yeah, Are they holding bags? Are they being paid? What is it?

And if you don't know how to do the research on that token, then following someone's advice is even worse.

Yeah, don't do that. Go to collective shift where they actually do the research process for you and they go to all those different areas. And look, when I do research I like to answer two questions. One, what are they trying to do and is it bullshit? Yeah, and the first thing is I'll read this is personally I'll read their white papers or white papers, I'll look at their GitHub like give book like where they write about it, I'll go to their community. All this takes under an hour to do to see where they're at and if they're actually executing. And then is it bullshit? Does it need to exist in the world? Can they actually execute? Can they achieve their vision? Because everyone's like the next ethereum killer. We're 10 times faster. We're this, we're that. It's like great, but how are you going to kill Ethereum when everyone's operating over there? People aren't going to come to your chain and then your heaps faster. What are you sacrificing? Guess what? Security. So you really need to understand that. And if you don't start off with us, I highly recommend collectorship, even though I work there. Right, because the analysts go through, they know what to do and they'll go to all those places and give you summaries and you have a huge head start. They don't, they don't think for you. They'll give you the information you need. Yes, they'll have their own opinion at the bottom, but giving you the hard facts that you can click and you can verify before you start investing.

It's the reason we created collective shifts, because we know a lot of you are busy, you've got lives, you're busy professionals. Maybe you run a business and you don't have the time to go and do all the research yourself. So the reason we this was me, I didn't know how to do the research myself and I was bloody busy and I wanted to learn about this. So we developed a team, we developed a platform we could have experts and analysts go through and actually break it down simply for you to fast track all of your research to help you make a better decision. So yeah, I highly recommend going over check it out.

It's why I joined as a customer and now I work here.

Yeah, there you go.

That's the legit truth.

Yeah. Next one. Holding 75% or more of your portfolio in altcoins. Oof, this is tough. Usually what we see here is like someone's gone really heavy in an altcoin that they really like or like a friend told them that they like. This is really risky. We, we tend to say that holding any more than 5% of a particular Altcoin is getting really risky.

Yes.

Altcoins, just as much as they can go up, can just as far the way down, they're very risky. Bitcoin, Ethereum is risky, let alone going down the market cap list.

You're way out of the risk curve, right?

Yeah. So if you're holding more than like 20, 30% of your total portfolio in altcoins, by Altcoins I mean anything that's not bitcoin, I also say Ethereum in there as well. So like, you know, if you're holding more than 30% in altcoins, you're way out on the risk curve. And you really need to consider building out your Bitcoin Ethereum because a lot of the value is being driven towards Bitcoin, Ethereum. Everything valuable, I'm seeing most of it anyway, has been built on Bitcoin, Ethereum and I think that's where the value will continue to accumulate over time.

Exactly. In terms of assets you can invest in, crypto is one of the most risky. And then if you're starting to go to Altcoins, you're way out on the risk curve. And the traditional investing example of this is imagine your portfolio, your share portfolio, let's say you got a hundred thousand and seventy five thousand is in speculative mining stocks that just spun up because I had a prospectus and they're talking to some African government, there's three guys with shovels, it's like a 20 year thing. Most of them go bust and only the directors make money. And you really need to think, okay, should I be investing in more longer term blue chip things or potentially ETFs or RIO, BHP if you're into mining, those kind of things. And if you look at your portfolio and you've got heaps and heaps of risk, you need to understand that it could all go to zero. It is very risky. Yes, you might have some wins. What do you do when you have those wins then? But understand your risk profile and if your portfolio matches your risk profile.

Yeah. And the last one we see mistakes people make is they're just investing more than they can afford to lose. Like you've gone too far in, you've levered up, you take out a loan, you've sold something, you take out your family savings to buy crypto, now you're down, that's going to add a lot of stress and you're going to make poor decisions. Right if you had that sick stomach feeling, and I've been there, I went too hard. When I first started, when I was like, investing and we had that dip back in sort of early 2018.

Or you're like, I had an uncomfortable amount.

XYZ, I'm uncomfortably long.

It can, depending on who you are, really add a lot of stress. It's like trading. Trading isn't for everyone because it adds a lot of stress and anxiety. So you really need to be careful.

If you. And the telltale signs here are if you're constantly thinking about it, you're constantly checking price. If it's keeping you up at night, you're wondering what happens if it goes down another 10% or it goes to zero. And the general thing people say is only invest what you can afford to lose. That's a very privileged thing to say.

Yeah.

But it rings true, especially in crypto. If you need money for. To live, for your mortgage, for your family, for food, put those priorities first. Potentially look at less risky investments as well. And then look at crypto as well, but as a smaller percentage of your portfolio.

Yeah, totally.

Great.

Okay, so if you're down 75%, maybe you made some of these mistakes, you're not really sure what to do. There's a couple of things you can think about. So one big, big tax warning, big.

Tax, not tax advice. See your bloody account. Call Adrian from Crypto Tax Australia. He's the man to this.

So, number one, you can consider selling some of your altcoins into blue chip assets like Bitcoin Ethereum. I've done this in the past where I had a few altcoins I wasn't really liking anymore. I thought their value proposition changed. They weren't delivering what they said. I rotated some of those altcoins into Bitcoin Ethereum, and for most of you, you can actually lock in those losses as a capital loss and offset any gains in the future. So let's say you're down $1,000. You can lock in that loss, you put in Bitcoin Ethereum over the next two years, you make $2,000. Now, you owe tax on the $2,000, but you can actually lock in the loss that you had on that thousand dollars and deduct off that $2,000 gain. So you can actually use losses that you've done in the past to offset future gains 100%.

If you want to Google this, you can look at things even like loss harvesting. Yeah. Is a good thing to look at. And in Australia, you can carry for. In General terms, you can carry forward your capital losses indefinitely. So you can have it this year, you can carry forward the next year, the year after, the year after. So it's always good practice to do that. Don't let shitty things hang around in your portfolio. Think about the opportunity cost of rotating those in to high quality assets.

Yeah.

And also remember that if you, and again, in general terms, if you hold an asset for more than 12 months, there's a 50% capital gain discount on that. So generally you pay your marginal rate of taxes. I have a thousand dollar. When you pay 30% taxed, that'll be reduced to 15%.

Yeah, you've touched on a good one there as well. Burges is like, you know, understanding the assets, that is worth your own and reviewing the cryptocurrencies you have. Maybe you have 20, 30, 40 altcoins, like that's a lot. Maybe it's time to, you know, you know, really dig a bit deeper. Stop listening to influencers, stop listening to your friends that are telling you to buy more, more, more by, by having 40 different coins with 100 bucks each isn't necessarily going to give you the wins that you need, right? Having conviction and listening and actually understanding the assets and you know, and you have conviction in them long term for me is a much better, more confident strategy than just like basically gambling across a bunch of different tokens.

And for me, it was very hard to do that to sell those because I'm a kind of buy and hold kind of guy, right? I'm like, this will come good. But then I, someone said to me, it's like, hey, if you've got a bunch of friends and one friend's a real asshole and they're hanging around, they're real dickhead, they're always drunk, they're causing you stress, they're ruining your life, why would you keep them around, right? You would have that conversation, you would cut them, right? You would take that action. And it's a similar approach to investing. If something's not performing, that's okay, it didn't work out, get rid of it. You don't always have to win. Put your ego aside and do what's best for you long term, mate.

And the last one, which we touched on back at the start, is you actually add more capital. So let's just say you bought a Bitcoin at $60,000, it's down at 20. If you have more capital and you're willing to invest more and it's not more than you're willing to Lose, then you can actually invest more into bitcoin and lower what's called your average buy price. So let's just say the first bitcoin you bought was 60, the next one you bought at 30, 30,000. Well then your average buy price is going to be somewhere like $45,000. Right. So you're bringing that average buy price down. So bitcoin, the price of the asset doesn't have to go as high for you to become profitable.

Exactly. And I've had to manage my psychology a lot around this where Bitcoin 60k now is 20 and immediately just because the price. But then I have to step back and say, hang on, when I was buying it at 60, what did I believe? Are those things still true? Yes, I believe it. Hey, it's now on a discount. Why am I not buying this? Because that you have your investment thesis still rings true and the vision is still there that the things that you think are going to happen are still there. The landscape is still the same and it's cheaper. Why are you not buying it? It's a Black Friday sale. That's what's happening. If things have fundamentally changed, then that's a different story. Time to change.

Yeah. And think about when you're investing. You need to think about what assets you're buying in and when. So for example, the latest craze has been like crypto AI far.

By the time this sort of stuff comes around. Like, you know, by the time, usually 90% of the time, by the time you're ready to invest into these seeds, they've been in corn. Yeah. You need to be investing ahead of time. You need to be investing in these things before they happen, not when they're happening. Because you gotta be too late. And you're going to be buying overpriced assets into people that are selling their profits.

Exactly. Or realize it's a sentiment run, like that's what it is. Recognize it for what it is. And just briefly, on crypto AI, I've run a lot of AI projects. It is fucking hard. Then you want to add crypto into it. Building utility, run tokens and run a thing on a blockchain. Get the fuck out of here. Like, it is so super hard. It is so long term. The majority of the projects I've seen don't need a blockchain. You're just adding complexity. You need fast servers that are somewhere else. Really look into those. Or if you want to, if you're a trader and you understand that it is a hyper, just based around sentiment and things that are going on in, you know, general markets. Just appreciate it for what it is. Don't go in because you think crypto plus AI is going to be amazing. Really do your research there.

Yeah, totally. Hybrid assets hold for a long period of time. It's tried and tested. Don't try and get rich quick or you're going to break everything and lose money just as fast.

That's it. And we say all these things and people want to get rich quickly. No one wants to get rich slowly. But you'd be surprised how fast your life goes by and time goes by and everything's compounding for you. The more you can automate, the better. The more you compound, the better.

Yeah, spot on, man. So if your portfolio is down 50 to 75% or you're just down in general and you wanted some strategies, hopefully that's been helpful. If you have any friends or family too that are down in crypto that maybe bought the last bull market, they don't know what to do. Please share this episode. I think it would really help them out and we'd love for your feedback. If you like these episodes, please leave us a review on Spotify or Apple Podcasts and Berg's cracking episode. Hope that's been helpful for you, for everyone.

Absolutely. And again, if you are holding crypto, you are down. You're not sure what to do. Go to the Collective Shift website. You can sign up as a member or you can jump on a call with Ben as well.

Yeah.

So Ben's doing free calls at 15 minutes and he will talk you through it and just get you right.

Yeah, yeah. We're offering these complimentary strategy calls, limited time. Callum's booking up. Super buzz I've had about it is shitloads. Yeah, yeah, yeah, yeah. Sorry. If you, if you need some help, how to jump on a quick 15 minute call, help you walk through your portfolio and give you the right strategy so you can invest, be set up for success.

Sensational, mate. What a cracking episode.

Cracking episode. I hope you enjoy, guys. We'll see you next episode. Thanks.

See you later.