Adrian Reid contrasts two broad crypto investment approaches: buy-and-hold (a "forever" portfolio) and systematic trading. He warns that long-term holders must be prepared for extreme drawdowns (he cites 60–70% drops) and that systematic trading requires strict rules for buying and selling and discipline to follow them. He recommends keeping a separate capital allocation for each approach to avoid undermining either strategy.
Chapters
Unless you are a systematic trader, the answer is mostly going to be or. My investment thesis is probably pretty shaky. If you're truly honest with yourself, if you've just bought bitcoin and you're a bitcoin believer and you're holding forever, okay, maybe that's a little different. But you've got, if you're going to do that, you've got to be ready for your account to swing by 60, 70% down before it goes, continues up. And that's really hard. That's hard for people. Like, imagine you had $100,000 and it dropped to $30,000. Well, you've got to be a real believer. Imagine you had a million and it dropped to 300,000. I mean, that's real stomach ulcer type stuff. Now with the systematic approach, you've got rules that tell you when to buy and rules that tell you when to sell. And you have to stick to those rules. You can't say, okay, it says buy, but you know, I really don't like this token right now, so I'm going to sell it instead of buying it, or I'm going to buy a small amount instead of the normal amount or I'm going to go big because I really love this one. You can't do that. You've got to operate according to the rules of the strategy. But what you can do is say, I've got my forever portfolio and, and I've got my systematic portfolio. There's one approach, one set of rules for this and a certain amount of capital. And there's another approach, the systematic approach, with a certain amount of capital for that. And you can operate two separate portfolios according to two separate strategies, provided you keep them separate. Don't try and overlay this on that or overlay this on that because you tend to get the worst of both. You don't want to kill a great strategy with something that's incompatible. That's, that's probably, that's. I think that's an important message.
