I’ve been in Buenos Aires for over two weeks now, nerding out on crypto and dialing in on my trading strategy. I’ve rented a one-bedroom apartment in Palermo Soho, and my days have consisted of going to the gym, reading, analysis, study, and trading. During this time, I’ve deployed the majority of the funds from my recent property sale into the market. Aside from three stocks, it’s all gone into crypto. This has been the largest amount of capital I’ve ever deployed at once, so I’ve put a lot of thought into my approach and strategy, which I’ll cover in this post.
As I’ve mentioned before, when I take a position in an asset, I classify it as one of two types of trades. Some positions are short-term, while others are long-term (6 months or more). I track my shorter trades in my Trading Portfolio and my longer-term positions in my Holding Portfolio.
The weightings between the two portfolios depend on the macro environment. The Holding Portfolio aims to capture more value but carries higher risk, as my risk management is looser. For example, I enter positions without stop losses and hold through market volatility, resulting in wild swings iat times.
Entering a short-term trade carries less risk because I have strict risk management. I always set a stop loss, which limits the downside. However, this also means I’m only capturing a portion of the upward move, and at times, I get stopped out, missing the move entirely.
So how am I weighted right now?
I recall reading a post from a highly successful commodity trader who primarily traded options on a short to medium-term timeframe, consistently delivering impressive returns. However, in 2020, with prices so low and setups so favorable for certain stocks (especially Uranium miners), he shifted all his capital into long-term positions. He believed that no short-term trading strategy could outperform simply buying and holding over the next year, given the prices he was able to secure.
This stuck with me and has influenced how I’m positioning myself right now. I believe we’re at a point in the cycle where the macro setup is so favorable that I’m currently 98% weighted into my Holding Portfolio. If I’m right, and we enter a bull market, then buying and holding these assets at the levels I’ve entered should return more than I’d achieve with my short-term trading strategy over the next 12 months.
However, I will be taking profits at certain levels from positions in my Holding Portfolio and reallocating that capital to my Trading Portfolio, where I trade with strict risk management to limit downside risk. As the bull market progresses, I expect my portfolio weighting to gradually shift from Holding to Trading.
The next three months are shaping up nicely. Bitcoin is attempting to make a higher high at the time of writing, which would confirm a new uptrend. My only concern is another scare with the USD/JPY carry trade, which I covered in my post Market Turbulence. I don’t think we’ve seen the last of this issue, but I believe when it does unwind, it will be short-term pain followed by Central Banks stepping in and injecting more liquidity into the market. There’s no point in trying to time it, instead just be prepared for it.

Position allocations within my Holding Portfolio
50% of my portfolio consists of my two core bets of Bitcoin (20%) and Solana (30%).
The risk-to-reward on Bitcoin right now is the best I’ve ever seen since I entered crypto. Yes, the price is much higher than in previous cycles, but the risks are significantly lower now that it’s being recognized as a legitimate asset by major players. Much of the FUD (fear, uncertainty, and doubt) from previous cycles (i.e money laundering, regulation, environmental concerns) has been debunked. Bitcoin is at the very beginning of its institutional adoption and has even entered the political arena, with Donald Trump discussing the idea of holding Bitcoin as a strategic reserve for the U.S.
I’ve already covered my analysis of Solana in a previous post here. The bull case keeps getting stronger. The protocol continues to gain adoption, and Solana Labs consistently delivers with protocol upgrades. The annual Solana Breakpoint conference is currently underway, and they’ve announced some exciting partnerships and upgrades. You can check out key takeaways here. I still believe Solana offers the best risk-to-reward of all digital assets right now.
The other 50% of my portfolio is allocated to altcoins. These assets are riskier and much more volatile, so a 50% allocation is considered very high risk. I wouldn’t recommend this to anyone who isn’t involved in the space daily, as I am.
My process when I take a position in an altcoin.
Whenever I take a position in a digital asset, I start with a theory (or trade idea) about why I believe the asset will outperform. I then analyze the chart to identify a technical setup that provides a favorable entry point. However, sometimes I’ll enter a position even without a technical setup if I expect an upcoming catalyst that could quickly drive the price up.
The size of my position and how long I intend to hold it often depend on the fundamentals, which I’ve outlined below. Since analyzing each aspect takes time, I usually enter a position first based on the trade idea and chart setup. Afterward, I research the project in-depth, which often leads me to adjust my position, whether adding, reducing, or exiting altogether. Here’s a summary of my process:
Trade Idea / Thesis
Chart Setup & Catalyst
Enter the position with an appropriate size based on steps 1 & 2
Analyze the following fundamentals:
Competitors & point of difference
Token utility & supply dynamics
Active users & growth
Team, developers, partners, & community
Product Market Fit, industry disruption & potential
Adjust the position based on the analysis: add, reduce, or exit.
Navigating the Altcoin Landscape
With thousands of projects to choose from, my approach to selecting altcoins starts with identifying the sectors I’m most bullish on. Some examples of sectors include Layer 1s, Real World Assets, Decentralized Infrastructure (DePin), Gaming, AI, Meme Coins & Culture, and Decentralized Finance (DeFi). DeFi itself has numerous sub-sectors, such as Decentralized Exchanges (DEXs) and Liquid Staking. I might also focus on specific ecosystems like Solana or Ethereum Dapps.
When focusing on a sector, I usually start with projects I’ve already heard about through market analysts I follow. From there, I compare those projects to others with the largest market caps within the sector. I’m specifically looking for upcoming catalysts, unique points of differentiation, or a disconnect between market cap and fundamentals.
The sectors that I’m most bullish on for this cycle!
Emerging Layer Ones
I covered Layer One smart contract platforms in my Solana post. I believe the winning smart contract layer ones will capture the majority of value in crypto, as they form the base layer that all decentralized apps (Dapps) are built on. However, this is the most competitive sector, and I expect many Layer One platforms to underperform this cycle. Solana is driving much of the adoption, and many of its competitors don’t offer enough differentiation to capture significant market share.
Despite this, I’ve taken two smaller positions in projects that I believe could find product-market fit as Layer Ones for Gaming, Real World Assets (RWA), or AI. One is SUI, where I’ve allocated 5% of my portfolio, and the other is APTOS, with a 2% position. Both are third-generation, ultra-scalable blockchains capable of handling tens of thousands of transactions per second. They’re designed with the Move programming language, which supposedly enables unique capabilities that could be well-suited for AI and Gaming.
APTOS may be positioning itself as the chain for RWAs, with rumored Traditional Finance (TradFi) partnerships. They’ve also announced a partnership with the Ignition AI Accelerator, backed by Nvidia. Meanwhile, SUI is making strides in the Gaming space, showing early signs of adoption with a notable increase in users. Recently, it has taken the spotlight with its price performance, already rallying 60% from my entry point just nine days ago.
I expect both market caps to exceed their actual fundamentals due to speculation, as crypto investors search for "the next Solana" of this cycle. I believe both projects are well-positioned to capture that narrative.
Decentralised Infrastructure (DePin)
DePin refers to crowdsourced physical infrastructure connected through a software layer that’s secured by cryptoeconomics, providing incentives and trust. This is the sector I’m most interested in, and I’ll be doing a separate post on it next week, along with the projects I’ve invested in. DePin is an incredible innovation that solves many real-world problems, particularly in compute and data storage for AI.
Artificial Intelligence (AI)
AI is the current hype, so it’s crucial to be selective when investing in this sector, as many projects are simply capitalizing on the trend. However, blockchain addresses serious issues within AI, and there will undoubtedly be some major winners in this space. One of the most exciting and ambitious projects is Bittensor, with its native token TAO, in which I hold a 4% position.
Bittensor aims to solve the problem of centralized control and limited accessibility in AI development by creating a decentralized, open network where anyone can contribute to or benefit from AI models and computational resources. This approach tackles challenges such as restricted access to advanced AI, monopolization by large tech companies, and a lack of incentives for independent developers to share their innovations. By decentralizing AI, Bittensor promotes collaboration, innovation, and more equitable access to AI technology. While ambitious and not without its critics, the market they are targeting is so vast that I believe it will be one of the sector's top performers, driven by speculation alone. I’ll be diving deeper into Bittensor in a future post.
Decentralised Finance (DeFi)
DeFi is perhaps the most obvious use case for crypto and one of its largest sectors. However, it has underperformed in recent years, primarily due to regulatory uncertainty. While DeFi holds immense long-term promise, I believe its short-term performance will largely depend on the outcome of the U.S. election. If Donald Trump is elected, DeFi could thrive due to his looser stance on regulation and the crypto-friendly position he has recently adopted.
One particular sector within DeFi that I’m especially bullish on is Decentralized Exchanges (DEXs). These protocols are among the most impressive in the space and are generating significant revenue. Some now offer user interfaces (UI) on par with Centralized Exchanges (CEXs). Many crypto users have been burned in the past by CEXs like FTX and Celsius, which mishandled or even stole users' funds. As a result, there is a strong preference for using trustless DEXs. Historically, DEXs have been held back by their UI, but this issue is finally being addressed. The long-term potential is also immense, as Real World Assets (RWAs) will eventually be digitized and traded on-chain through DEXs.
Of all the DEXs, I’m most bullish on Jupiter, the largest DEX built on Solana, which offers the best UI I’ve encountered. Jupiter enables swaps, limit orders, dollar cost averaging (DCA), and perpetual trading. They’ve also recently launched a mobile app and have a vibrant, active community. Like Solana, the Jupiter team consistently delivers upgrades, with the platform's total value locked (TVL) increasing by 46% last month. I hold a 6% position in their governance token, JUP.
Real World Assets (RWA’s)
RWAs refer to physical or traditional financial assets that are tokenized and represented on a blockchain. This tokenization allows these assets to be easily traded, borrowed against, or used in decentralized finance (DeFi) platforms, providing greater liquidity and accessibility. RWAs bridge traditional finance and blockchain technology by digitizing assets like real estate, commodities, stocks, bonds, or even physical goods, making them accessible to a broader range of investors.
There are plenty of ways to gain exposure to the RWA sector, such as through DEXs, Layer Ones, or specialized protocols. However, I see a significant opportunity at the infrastructure layer. A crucial component of blockchain infrastructure that enables RWAs to go on-chain is Oracle Networks. These oracles act as bridges between the blockchain (where RWAs are tokenized) and the real world (where the actual value of these assets resides). Oracles provide decentralized, secure, and verifiable data feeds that bring off-chain information, such as asset prices, legal statuses, and real-time data onto the blockchain.
Chainlink is the leading decentralized oracle provider, but it is facing increased competition from PYTH Network, which has grown its Total Value Secured (TVS) by 46x in 2024. PYTH is a newer project with superior technical capabilities, enabling ultra-fast, high-fidelity data feeds that are critical for financial markets. This is largely due to its integration with Solana.
At its current price of $0.32, I think PYTH is great trade opportunity, as I expect it to continue outgrowing Chainlink. There's a significant market cap dislocation, with Chainlink having a Fully Diluted Market Cap (FDMC) of $11.3 billion, while PYTH's FDMC stands at $3.2 billion.
Gaming
Gaming is a huge and exciting sector within crypto. Blockchain makes sense for gaming because it enables true ownership of in-game assets (like skins, weapons, and characters) and introduces Play-to-Earn features. While I think the potential is massive, it's a sector I’m personally less interested in, and I’ve invested less time into learning about it. As a result, my positions in gaming-related projects are small and based on recommendations from analysts I follow and trust, rather than my own research.
However, gambling and prediction markets, perhaps a sub-sector of gaming, are areas I am more interested in. There are a few projects in this space that I plan to explore in the near future, and I’ll report back with my findings.
Summary
I hope you found this post insightful. If you're interested in deeper analysis on individual projects, I’ll be posting more regularly on X. You can follow me at @therealjsmith88
Next week, I’ll dive into the DePin sector and cover some of the exciting projects I’ve invested in.