99. Top 4 Crypto Mistakes From The Last Crypto Cycle From Collective Shift Analyst

I'm so when I hear this because I look back on Covid and man, I was on it like was happening in Wuhan end of 2019. I was watching all the Twitter videos, I was like, this is massive. This is the thing. And I saw the sharp drop in our stock market here and I'm like, oh, it's go time. But I was shook and I was so emotional about it and I completely missed that I could have close to double my stack if I played that properly. And I didn't because I was too emotional. I didn't think in longer term market cycles. So when I look back, I'm still about it.

It's easier said than done. In the moment, it is difficult to understand where you are. Reflection and hindsight's a wonderful thing if you have conviction back yourself, especially if you're on the other side of the trade in the minority. That's where the upside is. So for the listeners, how would you do this again? Or what would you recommend them to do?

Welcome back to another episode of the Ben and Bergs Podcast. I'm Ben, your favorite high school dropout and founder of Collective Shift. Alongside me is Bergs, your favorite MBA and COO of Collective Shift, Australia's leading crypto portfolio insights company, providing professional analysis and portfolio strategies for crypto investors. Like you, we are a unique blend of the established and the self made. And we're here to break down crypto business and personal growth. But we're not here just to talk crap. We're giving you the insights you need to make better investments, build successful businesses and level up your life. And today we are talking about the top four biggest mistakes 1 of our analysts, Victor, has made over the last however many years he's been in crypto. Four or five probably, actually probably been six or seven now years. And he's one of the analysts at Collective Shift and he posted this article about a week ago to our members and I thought it was, you know, really eye opening. I think we can learn a lot from it. So, you know, really in crypto, in anything in life, I think learning from other people's experiences, especially if those people have done the thing that you want to do, is the best way I've ever learned. And I love hearing personal stories from smart investors, inside crypto and outside crypto, to really take those on and learn from those mistakes so we can, you know, not one, not repeat them, but to learn from them, actually take advantage of it. So we're going to walk through these four things. There's some Good ones in here. Some unique stuff we haven't spoken about. So stick on. If you're a new investor or you've been in crypto for a little while, this is going to be a real valuable podcast for you. We are in person again today. Burgs, how are you?

I'm good, mate. Good to see your face across the table.

It is, mate. Across the table.

Right. Reach over there and punch you is great.

You see me in 4k now, mate. Not, not 120p or whatever you see me in.

Usually I prefer the 120, mate.

Now, Victor is an analyst for Collective Shift. He's an absolute weapon. He's got four mistakes that he has made, how he made them and what he's doing this cycle to correct them. I have made all four of these mistakes and I'm actually still making one of these mistakes which I need to correct.

Yeah, yeah, me too. And look, I think, you know, the cycles in crypto.

I think people need to pay more attention to the cycles because it really just gives you a greater understanding of, you know, how and when markets come, when they go. And utilizing some of the things and tactics that he shares here will allow you to, you know, make more profits, make more money and be less stress and just understand, you know, where we are in the cycle. So it's kick off with number one, bugs, dollar cost averaging harder during depressions. So the first mistake Victor made, which was about four years ago in the very first phase of, you know, the bear market, he's saying here that he should have dollar cost average harder in those positions. So we are big proponents of dollar cost averaging. We love that, we teach that a lot to our members. And dollar cost averaging, you know, just really allows that unemotional investing, that automation, you don't need to think about it. And for high volatility assets like crypto and bitcoin, it's a really great way to ensure you don't miss out as prices move too quickly. Now, some areas of that real deep depressive state of the market, how can we understand when things are becoming oversold and we start to get those undervalued areas? Some examples of those are one, from a technical analysis standpoint, you've got the oversold on the rsi, we don't do a lot of technical analysis of collective shifts. So we look at things more like on chain activity, showing real boring or disinterest from investors, especially retail investors, excessive amounts of traders shorting the asset altcoins and bitcoin charts also showing the oversold overbought conditions on the US dollar and then also any sort of excessive monetary and fiscal tightening. And you know, and more to the point, I look at sentiment and just where we are in terms of, you know, who's buying, who's interested and when retail investors left the market, it's a really good position to start to dollar cost average. So going harder while the market's down is one of the biggest things to convert your cash into into bitcoin or crypto more regularly during those periods because you're going to get more of the asset obviously during those down periods, which is harder to do.

Absolutely. Be greedy when others are fearful. And we're definitely at that point in time now in the market. And I'll read from Victor's post here, I averaged into long term positions during the last crypto cycle as prices increased. This resulted in a less than optimal return. I should have paid more attention to the signals that were in a depression phase like where we are now and average into bigger positions. That's key. Where we are now average into bigger positions. For instance, if I had $3,000 and spent 1,000 when Bitcoin traded at 4,000, $5,007,000, I would have had 0.59 Bitcoin. At the price of $50,000, the value of 0.59 Bitcoin would have been about $30,000 or 10x my initial investment in contrast entering $500 at 4,000, 6,000, 8,000, 10,000, $12,000, $14,000, I would only have 0.398 Bitcoin or $19,000. When the price is at $50,000, this is about $10,000 less. And my 10x would have turned into a 6.6x. And his key takeaway was moving forward. I will stop dollar cost averaging when we come out of the bear period and convert any excess funds into my trading portfolio. So recognize where you are in the cycle. And he said right now is that period where you want to be accumulating. And when the price action comes on, don't be on the buy side, start thinking about being on the sell side.

Yeah, that's a great point. And timing the market we speak about a lot but is really important because 90% of people only buy in bull markets. And that's why we talk about on our show are you on the buy side or the sell side? In bear markets you want to be on the buy side and in the bull market you want to be on the sell side. If you're chasing markets during bull market because you haven't gotten the positions you want. That's where you start to, you start to get emotional and you know you won't make money because you're still thinking about buying because you haven't made enough. You know, now's the time you want to set up your portfolio so you can get on the sell side as markets go up.

That's it. When people aren't active in the space, think ahead and make it easy for yourself.

100% right. Next one. Underutilizing macroeconomics and cycles. So Victor's a big macro guy. He's our macro analyst and he was sort of talking about here how he missed the opportunity during the COVID 19 pandemic. He should have ignored all the negative news on lockdowns, negative business fundamentals and the time it will take to return to normality and should have focused more on global liquidity injections and ignore the noise. So on the surface, liquidity injections were caused by COVID 19. But on a closer inspection, this happened during a phase down of global economic performance in aligned with the four year macro cycles. And moreover, Bitcoin has the four year halving cycle which has historically been positive on price when you combine these two forces. And it's been incredibly bullish on the asset class. So as we look here, there's a chart we're looking at here around that accumulation phase. And you know, from 2011 to 2013, 2014, 2017 and 2018 and 2021 were the three cycles before this one. We've, we've sort of finished the, the, the sharp decline bear market of 2022-2023. And we're now in that sort of accumulation phase right now before we head into the ball of 2024 and 2025. I remember back in Covid when Bitcoin dropped from, I think it was like 7 or 8,000 down to 3 or 4,000, I bought as much as I humanly could at that time. And going back to that dollar cost averaging strategy, what you're able to accumulate during when prices are down is astronomically greater than obviously in a bull market you need a lot more capital to acquire that. So if you're lower on cash, trying to take advantage of the down periods when most people don't give a flying Pahuza is really important. And understanding what we're in that accumulation phase now is pivotal in being able to actually execute and buy crypto right now, rather than waiting thinking it's going to go down further.

I'm so filthy when I Hear this because I look back on Covid and, man, I was on it, like, when that shit was happening in Wuhan, like, end of 2019, I was watching all the Twitter videos, people getting welded into their apartments and locked and dragged out. I was like, man, this is. This is massive. This is the thing. And I saw the sharp drop in our stock market here and I'm like, oh, it's go time. But I was shook and I was so emotional about it. I'm like, we're definitely going lower. But it was more of a short, sharp response where it was only months before it returned to where it was and even higher because so much money was printed and the government acted very, very quickly. And I completely missed that. I could have close to double my stack if I played that properly. And I didn't because I was too emotional. I didn't think in longer term, market cycles and everything aligning. So when I look at this and I look back, I'm still filthy about it. But honestly, like, Victor, I wish you were with us during COVID mate, because I would have read this, I would have made a lot more money.

I think, as well, like, you know, it's easier said than done in the moment. It is difficult, right? It is difficult to understand where you are. You know, reflection and hindsight's a wonderful thing. And I think we can all look back and go, should have, could have, would have. It is hard always. It is hard. But if you have conviction and you follow your nose and, you know, you back yourself, that's especially if you're on the other side of the trade, you know, in the minority. Where we are now, where most people think anyone in crazy is just anyone in crypto is crazy. You know, that's where. That's where the upside is now. Number three, going to degen at the wrong part of the cycle. I think we've all been here.

Oh, yeah.

So as a continuation of these cycles, you know, Victor's mentioning here how he invested in new and shiny projects throughout the last 40 cycles. And it was not an intelligent use of capital because anything he had invested in 2021 became challenging to manage and the risk was too high, valuations were excessive, and it was just unwise to invest without participating in launch pads. So, you know, and launch pads are, you know, different. Different mechanisms to invest in tokens that usually have high lockup periods. And it's very difficult to manage these investments during down periods because altcoins predominantly are hurt the most. You know, the downside risk of holding altcoins is that they get drawn out. You have these multi year bare markets and you know, some of these altcoins can go down, you know, 50, 70, 80, 90, 99% during bare markets. And that's why holding pretty predominantly bitcoin ethereum during bear markets is usually a better strategy and just to be patient during these periods. So if you're investing into assets with lockup periods, it can just really hurt your portfolio. One of the examples here that Victor was mentioning here was how he's going to avoid locking UP tokens beyond mid-2025 because the risk versus reward just doesn't make any sense. An example of that was that he locked up his polkadot tokens to participate in a parachain auction. Had he sold the dot, so he's polkadot and purchased parachain projects that he was interested in, he would have been substantially ahead if he was just to buy those tokens now. So yeah, buying and holding now versus maybe rotating into some stables or BTC and eth. Buying back in when the market, you know, is starting to return is something that you should consider, especially if you're holding a lot of altcoins.

When I look at this, I think about NFTs.

Oh yeah.

I think about like when things are hot and like, everyone's gonna own NFTs. Everyone's going to the pub, they're gonna have these special bloody bar cards. Like you're gonna get all this access, you're gonna get, you know, all these groups. We're gonna live in Discord, mate. I think about all my NFTs and going really degen. And then how do you manage all of that? You can't be in the discords every day. Somehow during 21 we were all in the discords. It could be like, you know, a Covid. Everyone's at home. You've got Discord open while you're working. Everyone was about that life. And you think about it now, you're like, bloody hell, how do I manage all that stuff? I don't even know which wallets they're in. I don't know how to connect them. And back then we were like, we had Discord bots. You would just like, you know, get access to channels. You would sign crazy transactions. It was unbelievable. And now I look back, I'm like, how do I even manage this? The majority of the projects are doing absolutely nothing. I wouldn't even know how to get across them. I don't even want to. I can't remember the last time I opened Discord. Like I opened it for collective shift to do, you know, to talk to our members. But all those other channels I just don't care about anymore. And when I look back, that was the completely wrong part of the cycle. That is when I should have been karma, when everyone was had a rational exuberance about what was happening in the NFT space.

Getting on the sell side, on the buy side, mate.

We learn the lessons over and over again, don't we?

I think that other piece here, there's a nice chart here for that we shared in this post around the global liquidity cycle. And you know, Bitcoin, if you look at, I think it's the M2 money supply chart, Bitcoin tracks that so well. So as rates decrease and money becomes easier access and more people are taking out loans and there's more money in the economy that finds its way to Bitcoin. But over the last year or two, rates have been quite high, inflation's high, like there's just less money, people have less money to degenerate and, and buy crypto. So we're going to be starting to come out of the back end of that cycle. I'd probably say, you know, maybe late next year into 2025. And then hopefully rates continue to tighten up, money becomes free and it finds its way into risk on assets.

Absolutely.

Now, the last but not least, most biggest. Sorry, Last but not least, top four biggest mistakes is going to too many wallets, which you just mentioned having too many wallets. Too much shit going on caused by mismanagement, no idea what's going on. And I think you can resonate.

This is the mistake that I'm still making. So I'm a tech guy, I like really good wallet hygiene and I don't like to, I like separation. Right. Because first of all, it's easy to account for. And then, you know, if something goes wrong, only that specific address is at risk for the contract that I've signed for that asset. But it makes it very difficult. Dear listener, you open up your MetaMask, you've got 15 different hardware wallets. You've got different one for your trust, one for this, one for that. And then you have to look at what's in each. And which transactions have you signed on, which type of hardware wallet, because they can only read certain ones. Like my Trezor won't read certain addresses and I have to blind sign, but my ledger will. And then you're like, oh my God, how do I account for this? What do I even have? How do I find it, which physical device is it on? Then what do I connect it to and how do I access it? Which chain was it on? And then it is just crazy. And then you have to go through and be like, okay, what contracts have I approved? I've still got the old OpenSea contract, the old contract here that can be exploited. You have to think about all these layers because you want the digital separation and isolation. But then those assets are still at risk and it just becomes unmanageable.

So for the listeners, how would you do this again? Or what would you recommend them to do? When getting into the degen world of crypto.

Mate.

What I would do is I've seen a really good one where people are using just software wallets to mint and purchase and then once they have those assets, they then move them across to a vault or an address for long term storage. And I think the space I was in, where I was connecting my wallet to heaps of addresses, accessing things, you know, getting drops, approvals. I'm not about that life anymore. Right. Like it has to be substantial for me to do that. I think that was a trap and the rewards just weren't there. I don't know anyone that got significant rewards apart from an airdrop. So that would probably be the only thing that I do. So I would have it in just a software wallet for minting, move it across to a vault on a hardware wallet and if I want to do things with it and have segregation or move it back to that software wallet for approval. Yeah, depending on how much the asset costs as well. I would just make things a lot more simple. Tooling is a lot better just in the last year and a half, two years as well, to actually facilitate that. And then you've got things like delegation where you don't have to approve. I've got what the correct term is. It's on, on the Ethereum chain now that they've just released in the latest update where you don't have to do an approval on an address. Yeah, yeah, yeah. So there's a lot more fancy things you can do now. But honestly for me it's just don't get in that position in the first place. That is the lesson that I have learned.

Yeah. And Victor's is the same here. So basically he's mentioning here this is the most embarrassing and frustrating aspect of his crypto journey. The smallest part of his portfolio went towards degen opportunities, but it took up the most time.

Exactly. And I look back on this and I'm like, I'm in these discourse, I'm spending all this time like when's the next drop going to be? When's the burn going to be? Will I get access to this next token that they have? Will I get this airdrop? What do I have to do? And the amount of time that I spent just monitoring it, trying to be a part of it, I'm like, this is not worth it. If you add up how much your time is worth, you are not getting a return. The majority of NFTs are down 99%. It was just a bad decision. It was ICOS all over again. I got sucked in again. Never again. That FOMO ate me up. I will not allow that to happen again.

Yeah, and you know, very resonating with Victor here around that, tracking wallets where the tokens were staked, also challenging. Then you missed them. Then it became a job of manually tracking everything, making and entering positions difficult. Then he missed opportunities. There was just like too many wallets, too many seed phrases, complex, way too hard lost access. Just massive lesson to simplify everything. So the recap here. Out of all four of his mistakes, to reiterate, he will have greater clarity in the crypto cycles by paying more attention to economic cycles. And he'll be better at averaging in and out of those positions, especially in his degen portfolio. He's going to look to simplify processes and reduce the number of things he participates in. And now there are no issues with being a degen, but a degen that cannot correctly track activity is destined to fail. So I hope that's been helpful for everyone. I think everyone resonated with this. A lot of our members love this post and it just goes to show, like, you know, at the end of the day, following those cycles, understanding the position you're in, taking advantage of those positions that we are in now, and holding on as the global liquidity comes back, the four year cycle comes back. You know, I'm more confident than ever that it's going to be exciting next 12, 18 months.

I am too. And the lesson for me is just to keep it simple, stay the course. Just make your life easy. Don't waste your whole life and all of your time. Keep it easy. Automate. Have a strategy. Practice your craft, spend time with your family and your friends and make some money along the way.

Love it, man. Thank you everyone for listening. Hope that's been helpful. If you have any crypto friends that you think would find this valuable, we'd love for you to share it with them. It's how we grow the podcast. And you know we love coming back to you each and every week, giving you the beans on our lessons and stories from Collective Shift and ourselves to help you win in crypto. If you want to follow us on Twitter, you got bergzabybackburg, myself en Simpsonau, and you can follow our Twitter Benandbergs on Twitter and we'll see you on the next episode.

Thanks, champions.