Transcription
So, first of all, I love DeFi cash flow. There is nothing better than turning crypto that you're holding into a daily, weekly, monthly yield, monthly cash flow. I am a cash flow investor. Everything that I invest in, I ensure that it brings me back more money.
But, the problem is when most people yield farm, they expect their actual DeFi portfolio to appreciate when the market appreciates. It won't. So, in today's video, I want to talk about those cycles, talk about our strategy, and what we're doing right now with where the market is at.
So, personally, I use the 200-week moving average a lot. You can go to tradingview.com. You can go to indicators up here, type in 200-week, and add it to your chart. Now, I know a lot of traders and short-term investors, and really just gambling, use the 200-day. But, if I look at the 200-day, like at best, you're thinking weeks, maybe months. As an investor, I'm thinking years and decades. I like the 200-week because we're looking at, you know, pretty much 4 years.
But, if I look at the 200-week and the 200-day, this gets really exciting. We're almost touching the 200-week, which historically we we don't really go under the 200-week. We don't go under the 200-week for very long. And we are below the 200-day. So, when markets do this, I like to start stacking. I like to start building my bull run bags.
Now, again, I can't predict when the bottom is, but I know we are much closer to the bottom now than when we were when Bitcoin was 100k and 90k. There were some really awesome opportunities at 65. Could we see 65 again? Probably. But, again, I'm not too concerned for the short term. I'm looking at the long term. I'm looking at you know, Bitcoin's going to be 200, 250, 300k. I want to stack it now.
So, what I do is I stack Bitcoin, then I put it on my cold storage, and then I slowly start putting it up as collateral on Aave. So, I have some of my blue chips deposited on Aave, and then I can borrow assets against it. Now, please understand health score, LTV. I'd actually be happy to do an entire lesson on LTV and liquidation. Most people get wrecked in a cycle because they take on too much leverage. You have to manage it. In fact, just leave LTV or loan-to-value ratio. Just let me know if you want me to do a master class on it. I will definitely film a video for you. And you have to like lock it in your memory because again, 80% of investors get wiped out because they don't understand leverage. Those who do don't just see a 3x or 4x in a bull run, they see a 5x, 6, 8 8x because they're using leverage wisely. And they're ensuring they're paying down the debt as the markets get more heated.
Anyhow, the more bearish the markets get, the more assets I start popping up on Aave or a lending platform, and the more I'll start borrowing against it. Now, what's really awesome is your loan-to-value ratio or your health factor gets healthier as the markets see more green. So, when I put this collateral up, it was worth around $180,000. It's now worth 196. I've made $16,000 off my BTC and ETH. So, I don't miss out on that upside. Then I can take the borrowed assets and do whatever I want with it.
In this instance, we've got a position open over on PancakeSwap. And I can take the 6k, which is actually low right now. This was averaging around 90%. It's pretty close to 10k right now. Volume's a little bit lower today. Totally fine. But, I can take my rewards, and I can do one of two things. Earlier in the cycle, which we're in right now, I want to buy more assets. I want to increase my collateral, which increases my loan-to-value ratio, which increases my health score.
But, as we get further into the cycle, which we're going to, and this is where most people get wrecked, I'm going to start taking my earnings, paying down my debt. And as I ladder out of these positions, I'm also going to take those profits and pay back my debt. And the more heated the market gets, the more I'll trim down my yield farming positions, and the more I'm going to sit on stable coins, which I still laugh at this.
So, I remember there's a there's a few videos on YouTube. You can find them. Just look for the end of 2025. I had some videos where I was showing on how much stable coin I was sitting on, and I was looking for stable coin yields. And there were so many comments being like, "What an idiot. This guy is telling people to invest in stable coin when right now we're about to hit the bull market, and and you should be buying XRP or whatever else they're talking about." Greed was at an ultimate high. Markets were at ultimate highs. And I just want to do the opposite of what the market is doing, and yes, I de-risk, and I sit on more stables. I was sitting on a record amount of stable coin here. Did I exit all of my positions? No. It's impossible to time the tops, but I was I was I had zero leverage. Where down here, I had a lot of leverage. I used that leverage to my advantage, locked in a ton of profit, and now I have a ton of stable coin to redeploy and start building back my positions so that when we see this again, yet higher, I can do another 4x, 5x, 6x of my net worth.
Now is not the time to sit on the sidelines. I am not saying deploy every dollar you have. We don't know what the market is going to do, but if you're sitting on the sidelines doing nothing, where I talked a lot of people, they were doing nothing, they were doing nothing, the markets got heated here, they were like, "Oh my goodness, maybe I should get in." They got in, markets dumped on them, they sold at a loss, markets got heated again, they were like, "Well, maybe now is my opportunity." They got back in, markets dumped on them. They're always chasing the market instead of being in front of it.
But, being in front of the markets takes courage because everyone else is doubting it. Fear is at an ultimate high. So, you have to go against that natural instinct of like, I need to stay safe right now. And vice versa, when the markets are really heated, everyone is greedy, no one wants to take profit, and it it takes courage, and it takes going against the grain to actually lock in profits, sit on a ton of stable coins. You'll have the feeling of like, "What if if am I missing out? What if Bitcoin goes XYZ?" But, you've got to lock in the profits. You've got to do the opposite of what most participants in the markets are doing. That is how you win.
So, just to take this home, I don't know what the market is going to do, but if I see another 68, 67, 66, I'm going to use a lot of my profits from the last cycle to be able to buy more blue chip assets, stack it as collateral, borrow against it. And I do around $25,000 chunks. So, I'll take 25k, buy blue chips, put them as collateral. Again, I'm dollar cost averaging into the markets. I don't know what the markets are going to do. All I know is that there's some really good deals to scoop up. There may be some better deals in the future, but I don't expect another, you know, 50% drawdown. And then I'm borrowing against my assets, creating yield, and then using that yield to buy more assets.
Really, really hope that helps. We actually have a free course on this. It's fully revamped. We just revamped it. There's 12 lessons. It'll take you about 2 hours-ish to get through. Each lesson is about 10 minutes. There's a ton of free tools to you. We look at the foundations, we explore DeFi, we talk about different strategies, and we look at the actual playbook. It's completely free. Just comment free course below, we'll get it to you.
And I'll just leave you with this. If we're looking at this 200-week, you can just think of it like this. When the 200-week was around $50,000, and the markets were super hyped, we were seeing around a 2.5x on that. So, the market was pricing Bitcoin at, you know, 125 or whatever, 130. If the 200-week is around 90,000, 100,000, 2.5 would be a 250,000 Bitcoin. Now, again, not saying that's for certain, but it's a way to look at it. The market fluctuates. We rarely go under the 200-week. Often times, we're bouncing way above the 200-week. So, the second an asset like Bitcoin gets close to the 200-week, I'm buying, I'm stacking.
Now, could we dip under the 200-week? Maybe. I don't know. Probably. But, it's a long-term game. I'm investing now. And the more quality assets I can stack, the more I'm going to profit when the bull run comes. And that excites me, and I hope it excites you. And with that said, happy investing. The opportunities are abundant. Have fun with it, and I'll see you in the next video. Peace.