A Helpful Tip for Riding Crypto’s Volatility

The importance of position sizing

Reading time: 1.5 min

The market had a major pullback this week.

Bitcoin dipped 15%, which caused most altcoins to drop by 30% or more. If you freaked out while looking at your portfolio or panic sold—this is your wake-up call.

Pullbacks are normal. And if this spooked you then you probably:

  • Don’t have a plan

  • Have too much invested

  • Have too short of a timeframe

  • Don’t understand what you invested in

Or all of the above.

I get it. The meme coin frenzy has been insane recently. I’ve been feeling a bit of FOMO myself.

While it’s tempting to dump a lot of money in for the potential payoff, it’s a recipe for disaster if you’re not prepared to handle the downside.

Meme coins (and altcoins in general) are highly risky and volatile. They can easily dip 50% and then bounce back in a week, as we’ve seen recently. The worst feeling is panic selling and watching it rebound to record highs.

Position sizing is essential in investing and helps you avoid these situations.

Not everyone has the stomach to toss thousands into some meme coin. And that’s fine.

You need to find your comfort zone and size your investments to match your risk tolerance.

Putting $100 into a coin may not seem like much compared to someone else. But if that amount allows you to be comfortable with holding through the ups and downs then you’re in a much better position than putting in $1,000 and panic selling.

My personal position sizing rule is 1-10% of my portfolio to a single altcoin. This is what I won’t lose sleep over and it allows me to hold through the volatility to reap the upside.

Crypto is one of the biggest and most exciting opportunities of our generation. But that opportunity doesn’t matter if you panic sell at every dip.

This bull run is far from over and there will be more pullbacks along the way. Position sizing is your key to staying in the game.


Fifty Sat


After writing this newsletter for 66 weeks straight, I’m taking a little break!

Ya boy is going on a much-needed trip and I’ll be back with another newsletter on Friday, April 12.

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