Transcription
Whether your goal is $100 a month, $1,000 a month, $5,000 a month, $10,000 a month, six figure, whatever your goal is with your crypto DeFi portfolio, in today's video, I want to break down our three-layered approach that will help you get there. We're also going to do a bit of a side quest on how we actually select ranges and when we choose to be in LPs and when we choose to not be in LPs, or bonus points, when we choose to be in LPs on the downside, and how I think through, "Oh, I'm going to be in, you know, 80% of my portfolio was in LPs," or at times, sometimes only 10 to 20% of my portfolio is in LPs. Remember, you're building a crypto portfolio, and then you're cash flowing that crypto portfolio through DeFi, and I'm going to explain that in today's video, talking about the three-layered approach.
This conversation has been inspired by a post that we posted on YouTube. Matt, who is a member in the UIG, said, "I love the layered strategy. I have three layers, and at least two layers have always been in range." Now, what Matt is specifically referencing is the layered liquidity pool approach, which we can absolutely talk about, but as I really thought through it, it's like, yes, there's layered liquidity, but there's also a layered approach to building a portfolio. And don't forget, the whole point of a portfolio is to cash flow.
We're not talking Lambos and yachts and mansions, although I love cars, could care less for mansions and yachts. The point is, all that stuff is good, but your DeFi portfolio probably ain't going to get you that. Let's just be real. We want to supplement our income. We want to cover our living expenses. We want to pay down an extra $430 onto your mortgage because of your DeFi portfolio. To me, that's like, that's the goal: build a portfolio that makes your life easier. That translates to like, "Hey, this improves my life," and that's what we're ultimately going to be talking about in today's video.
So, if you'd like, take a piece of paper and lay out three layers. So, just put two lines: Layer One, Layer Two, Layer Three. Layer One is your core hold. We're looking at 3x, 4x, 5x your portfolio. So, for me, I got a tiny bit in my ledger, around 200k. It's actually up 7% over the last week, which is sweet. Scratch that: 8% even better. But, then I also have five or six different wallets, most of them being Tangem. So, I got $146,000 over on one card. I got $737,000 on another wallet. I've got $50k on another wallet. I've got $237,000 on another wallet. The point is, that's my long-term holdings. I'm looking to four, five X that. I'm looking to turn $2 million of long-term holding into $10 million this next cycle. So, that's Layer One. That is your core hold, which also, by the way, if you leave "free tools" in the comments below, I'll send you a bunch of free tools. Two of them will be very relevant to actually building your long-term holding, which is your Layer One. That's going to be a dollar cost average calculator. So, really calculating: if I dollar cost average every single week, every single month, how much do I have to do to get to my goal? So, reverse engineering your goal, and then that's going to be your ladder out planner. Which, once you get access to this, you can just click on whatever tool you want to open up and use whatever tool, for instance, for your ladder out planner. But, the point is, Layer One is your core hold. You are always adding to this portfolio, either through fiat you're on-ramping or through your DeFi portfolio, which we'll get into in a second. But, you are also planning your exits. So, you know, "Hey, if I have X amount of dollars, I'm going to exit the next cycle, most likely with about this much." Here is my plan. Here's what I have to do sell. Here's when I ladder out. Here's the profits I'm going to book, etc. Don't round trip these cycles. Most people do because they're freaking greedy, or just they don't have a plan. I want you to have a plan. Deal? Awesome. Grab the free tools. Just leave "free tool" in the comments.
Layer Two, this is your cash flow layer. Now, there is multiple ways to do this. I'm not going to get into all the specifics in this video. We've got well over a thousand videos here on this YouTube channel for you, and I'm always happy to answer any questions. We also do Wednesday lives on YouTube. And of course, the UIG, that's a coffee per day. That's where we actually work with members, review portfolios, like actually get hands-on with members' portfolios. But, the point is, you don't want that crypto just sitting there. You want to turn it into cash flow. Now, there's going to be different times in the market where the Layer Two portion of your portfolio is going to be bigger, and there's going to be sometimes where it's smaller. There's going to be times when it's hedged, which, you know, half a year ago, that's all we would talk about: "Hedge your portfolio." Right now, I'm not hedged on my DeFi portfolio. For instance, I just kind of rebalanced and took profit on this specific portfolio. It's averaging between 60 to 90% APR, and I actually trimmed in the ranges. These were sitting at around 30% range. Right now, they're 20 and 23% with BTC. I've got a 20% wide range, and with ETH/USDC, I've got a 23% wide range. That's $6K a month that I am taking those profits and buying more BTC, buying more ETH, building my treasury, building my Layer One part of my portfolio, 'cuz that's where I get the multiples in a cycle. By the way, we make decisions on how we enter an LP, the ranges we set by using a few simple indicators. I love the 200 week, by the way, especially for dark hours average you're getting more aggressive. When we're just above, touching, or below the 200 week, I get very excited. I go all in. And then, I love average true range. If you look at Bitcoin, the average true range is $2,228. So, in times of higher volatility, your average true range is going to be much higher, and your ranges are going to get much wider. When markets are a little less volatile and a little bit more boring, there's not so many price swings, then your average true range will come down. Right now, it's $2,214. So, over the last 14 days, Bitcoin has fluctuated by an average true range of $2,228. Now, you can make decisions from there how you want to do things. My decision on what range to set is always a multiple of that. But, I guess my ultimate point is, little less volatility, so I trimmed in my range, and I would call this a tight range at 20%, but I am okay with that at the moment. Remember, you could adjust your ranges and not lock in any impermanent loss, too. So, I didn't rebalance. I just opened up my ranges. When I did, obviously, I took my earned profit, booked it, and everything here reset.
So, now you have Layer One that is your bull run bag, that's your treasury. You may be borrowing against it, which, at times in the market, we do as well. You might be using some of that to LP, generate cash flow. But, the point is, your crypto portfolio is now providing, well, what you see here. "Hey, it's covering my living expenses. Hey, it's paying down my mortgage. Hey, it's doing something for me." I didn't just buy some land and holding it for 10 years. I bought some land, and now I rent it out. I earn cash flow.
This is Layer Three, the opportunity layer. There's a lot of our members that are investing heavily in the Tau ecosystem right now. I'm not saying invest in the Tau ecosystem, but this is like new projects or exciting blockchains, or, "Hey, I really think this thing could do well." It makes up a small percentage of your portfolio, and what's really awesome is, it's kind of like an infinite money glitch in a way because you are not on-ramping any new fiat. It pains me to see investors on-ramping fiat, hard-earned money, and then gambling with it on plays that, sure, they might 20, 25x, 50x, but they might also go to zero, and you have traded your time for that money. It's much better to move that money into long-term holds, cash flow those assets, and then take that cash flow, or at least a small portion of it, and actually start investing in that opportunity layer. And what's really awesome with that is, that's money that your portfolio generated, in a way, free money. And if 5% of your portfolio is made up of the opportunity layer, which I know many people who it's like 100% of the portfolio is made up of opportunity layer, and they're just hoping and praying, and they're wondering why their portfolios shrink by 90% because most of their projects don't do well. Then they're back to square one, and now they're out of the game 'cuz they have no money. Like, don't place yourself in that position. But, in a way, you're playing with house money here. You're taking maybe 5 or 10% of the fees you're earning, the cash flow you're earning, maybe the capital gains from your actual Layer One of your portfolio, and then you're taking that and you're placing some bets, which, by the way, I'm a fan of. That's why there's such insane opportunity in crypto, but it's also why a lot of people lose a lot of money, sometimes their life savings, 'cuz their entire portfolio is built on Layer Three. We're like, "Yo, 5 or 10% max of your portfolio, and only when Layer One and Layer Two is built." So, I can take 10% of this every single month or every single week and put it into some opportunities that are not guaranteed, but they show potential. Again, new ecosystems, new blockchains, new projects. Last week I invested a portion of my portfolio into three projects, one backed by a buddy that I really, really believe in, and I'm okay if they don't work out. Again, it's house money, it's a small percentage of my portfolio, and my Layer One and my Layer Two part of my portfolio is locked in.
I really hope that helps. We do have a suite of free tools that will absolutely help you. Just comment below "free tools"; I will send it to you. Use those free tools to actually help build the Layer One part of your portfolio and the Layer Two part of your portfolio.
We also built DeFi Buddy. You can just go to defibuddy.io if you'd like to help you with the Layer Two part of your portfolio, which, by the way, is a free tool. It's going to help you look at the entire crypto market, help you find opportunities for the Layer Two portion of your portfolio, help you simulate those positions so you can set ranges that are backed by data, not just by like, you know, randomly setting a range that's not going to do well. You can calculate impermanent loss. You can even hedge your portfolio. So, check that out. That's our contribution to this space. It was a multi-six-figure project. We built it. We don't charge for it. We just want to give it to people for free.
So, build your treasury, then cash flow that treasury, and then, and only then, then and only then, do you start placing bets on up-and-comers, less proven tech, less proven protocols, etc. Capiche?
Really, really hope that helped. If it did, like this video, subscribe to this channel, comment below if you'd like to see anything else. Grab your free tools; just leave "free tools" below. And if you'd like to check out what Gabriel and David and thousands of other members in the UIG are doing, then feel free to check out the UIG: cryptolabresearch.com/uig. Links are in the description below. And with that said, I'll see you in the next video. Peace.