tl;dr
The carnage continues!As we continue to watch crypto plummet we can point to a few factors. Right now we are experiencing the impact of liquidations, margin calls. People like Michael Saylor that do not sell their crypto, but borrow against it could be facing margin calls. Why is that? Well, when yo...
The carnage continues!
As we continue to watch crypto plummet we can point to a few factors. Right now we are experiencing the impact of liquidations, margin calls. People like Michael Saylor that do not sell their crypto, but borrow against it could be facing margin calls. Why is that? Well, when you put your crypto up as collateral for a loan and that collateral falls in value as much as cryptos have over that past few days, you have to put more up for collateral whether that is more crypto that can bring the value back to where is was agreed or you have to pay money, margin calls. If you don't have any money to put in, you will get liquidated.
What are the advantages to borrowing against your crypto, you ask? Well, it is a way of accessing some of the value of your crypto, usually up to 50% without having to pay taxes on the gains. Slick, right? As you can see, there are major risks to putting yourself in a position where you can be overleveraged and have to add to the collateral or suffer from liquidations. Mind you, I am not saying you shouldn't take loans out on your crypto. What I am saying is there has to be a mitigation plan to respond to realized risk.
So, what I am doing right now? Like I said yesterday, I am waiting until I can get an idea of what comes out of the FOMC meeting happening on Tuesday and Wednesday. That said, I have cash at the ready to immediately move when I do see how the market starts to react.
I am not talking about dollar cost average where you're diving the amount you are willing to invest and make incremental investments over regular intervals. In this case, I am talking about something more acutely focused on macro and micro events that can be acted upon outside of your DCA strategy.
So, what current holdings am I looking at?
1. DOGE - Even though I still see this is a meme coin, DOGE still has a upward potential as it has found its way into the hearts of its ever-expanding community. Almost more importantly, it has Elon and if he says something while the market is on an uptrend, DOGE has the potential to skyrocket.
2. SHIB - I am also looking at getting into SHIB since it is known as the DOGE killer and has as strong community supporting it as well. In addition, it has real utility, and the project is looking to continue adding to that utility going forward.
3. MATIC - this is because Polygon is one of my favorites because it is what I call connective tissue. They have a huge portion of Web3 projects on their platform.
4. GALA - I firmly believe in this gaming platform and think it will grow. Getting more at their low point would do well once the crypto space goes back up. I would be looking to skim when it does go up.
5. Crypto.com - this is an obvious choice since I think this is a long-term opportunity that can bring a multiple to my earnings.
6. SOL - Solana is an emerging NFT platform in addition to other uses. Being very much under $100, this is a serious discount. That said, given the price, I would only get a percentage increase on this investment. So, I would consider getting in at the lower price, but put the bulk of my investment in lower cost coins.
7. VET - Remember, I just got into VeChain, but would gladly get more once the bottom is established. Again, I think this project has a future and that could mean a very good upside and they begin to move upward and get back to where they once were, $.26.
8. BTC - Of course, I would pick up some more Bitcoin as this is how I would snatch up some of the other coins. For example, some coins have a higher percentage of negative movement versus BTC. This means I would get more bang for my BTC when I use it to purchase other coins.
9. ETH - much like Bitcoin, Ethereum has fallen less than other coins I can purchase with it. I would also hold on to a bit to capture some of that upward gain. Mind you Ethereum is in a position where Solana could gain even more market share. The same can be said about Polygon.
My bonus pics are Cardano and Fantom.
🔴Full Disclaimer: This video and its contents are for informational purposes only and do not constitute an offer to sell or trade, a solicitation to buy, or recommendation for any security, cryptocurrency, or related product, nor does it constitute an offer to provide investment advice or other related services by Eddie Jay on Crypto. Eddie Jay on Crypto may have a financial investment with the cryptocurrencies discussed in this video. In preparing this video, no individual financial or investment needs of the viewer have been taken into account nor is any financial or investment advice being offered. Any views expressed in this video were prepared based upon the information available at the time such views were written. Changed or additional information could cause such views to change.