We asked crypto influencers, veteran
traders, VC fund founders, and more to share their top tips, essential Twitter follows, and
the stories behind their best trades ever. In this edition we speak to longtime trader Ray
Tong, who is full of practical advice for both new and experienced investors.
Ray Tong stumbled across Bitcoin before most
people had even heard of it, while working on a college project in 2011. He got his first
bitcoin for when they were just $10, which required a trip to Walgreens to send a Western
Union payment to a stranger on the other side of the planet. (Thankfully it’s gotten a lot
easier.) When Bitcoin’s price quickly shot up to $30, he was hooked. He got deeper into
trading during his post-college years working at Facebook, where he was an active member of a
popular internal crypto channel. These days he splits his life between his day job – he’s a
product manager at the online fashion site Farfetch, where he builds internal tools that have
nothing to do with crypto – and managing his cryptocurrency portfolio. He’s full of practical,
everyday advice for both new and experienced traders.
Ray Tong’s favorite trade
He knows it sounds crazy to some people, but
Tong hasn’t sold any Bitcoin since 2014. At first it was simply because he didn’t know
how to handle the tax implications of taking profits, but as Bitcoin’s potential as a store of
wealth emerged over the years, it became a strategy. “I just kept buying and held off
selling,” he says, laughing. “Which obviously helped tremendously with the 2017 bubble. So the
best trade I’ve done is probably literally doing nothing.”
Resist FOMO
No matter how good your timing is, you’re
never going to be perfect. You’ll regret getting into rising coins late and not abandoning
sinking ones sooner (or leaving a position that later rebounds or a whole host of other
scenarios). Even Tong, who got into Bitcoin when it was less than a tenth of a percent of its
current value, remembers feeling like he had missed out because he didn’t buy sooner. “One
thing that helps is setting targets,” he says. “Say Ethereum is $500 now. Set a target to sell
maybe 10 percent of it when it hits $1000. And 10 more percent when it hits $1500. Having that
kind of framework is really useful.”
Set boundaries
Sometimes friends ask Tong to suggest a good
amount of money for them to put into cryptocurrency, but he thinks they’re asking the wrong
question. Instead, they should be thinking in terms of the percentage of their own investment
portfolio (and ultimately net worth) they want to devote. “Once you've come up with that
number, you can break it down even further into three buckets — the percentage you want in
Bitcoin, the percentage you want in Ethereum, and the percentage you want in all the other
coins.”
Track your holdings
Tong suggests either making a spreadsheet or
using one of the free tools available online to keep track of your holdings and make strategic
decisions. He uses a web and mobile app offered by the crypto market-info site CoinGecko.
“They provide literally every coin and every ticker symbol,” he says. “And you can just
manually type in how many coins you own and quickly see how they’re performing against each
other.”
Research, research, research
Tong reads the major online cryptocurrency
publications like Coindesk and Mercari, but says the only source that moves at the speed of
crypo is Twitter. Among his favorite follows are people from major funds who have access to
vastly greater analytical resources than any individual trader. A few of his suggestions
include Three Arrows Capital founders Su Zhu and Kyle Davies and the Spartan Group. “I also follow pretty much the
whole team at Paradigm – they’re brilliant and the stuff they
post is super technical,” he says. “If I read their posts and don’t know what they’re talking
about, it forces me to dig in.”
Think Bitcoin, not dollars
It’s not easy to do, but Tong suggests
shifting your mindset so that Bitcoin or Ethereum becomes your crypto portfolio’s base
currency, as opposed to always thinking about its value in U.S. dollars (or whatever your main
fiat currency happens to be).“Try to find the currency you believe in the most and make
that your base currency,” he says. “So don’t worry as much about your holding’s value
in dollars [from day to day], worry about making trades that ultimately result in you getting
more coins. A lot of big firms are actually starting to do this.”