Crypto-trading resolutions

Jan. 1 is an arbitrary time to re-commit to going to the gym, and that may be why gyms are empty again by the end of February.

For professional traders, though, Jan. 1 is anything but arbitrary: On New Year's Day, their P&L resets to zero, making the ups and downs of the prior 12 months irrelevant.

It's been a long while since I was a professional trader, but on this day at least, I still try to think like one: Jan. 1 is an opportunity to mentally reset your P&L to zero.

With luck, this mental reset will curb the paralyzing FOMO of those who missed the rally and rein in the risky overconfidence of those who didn't.

I count myself in the former camp, unfortunately, mostly because I underestimated the euphoric response to the election of the first crypto president.

But things change so fast in crypto, I'm confident there will be plenty of opportunities for me to do better this year (if I'm not too busy going to the gym, that is).

Here, then, are my resolutions for trading crypto in 2025:

Try everything. I got lazy about trying new things in the bear market so when I heard about yet another perps exchange called Hyperliquid, to my great misfortune, I didn't bother trying it — doing just a few trades early on would have earned me an airdrop of HYPE tokens that might have been worth tens of thousands of dollars at current prices.

Be open-minded. There's always a good reason not to buy the latest crypto thing and most of the time you'll be right to listen. But when you're wrong, the opportunity cost is high. Crypto "investing" is like VC investing in that the greatest sins are those of omission — so you have to spend more time trying to figure out why something might work rather than why it probably won't.

Remember there will be another giant bear market. Don't get too carried away being open-minded and trying everything, because only three things are certain in life: death, taxes and crypto bear markets.

Remember there will be another giant bull market. After 2022, I thought the next crypto bull market cycle would require some real substance to get going (my mental model was the rise of FANG after the dotcom bubble burst). This past year proved me wrong because crypto has gone crazy again despite failing to progress much beyond memecoins. The big takeaway from 2024, I think, is that it doesn't take much for people to return to the crypto casino.

Remember that tax day is coming. Create new wallets for new activities, keep every trade on a spreadsheet, deal once per position — anything to make figuring out your crypto cap gains bill (or write-off) easier come tax day. This is especially relevant in the US where the IRS is getting serious about crypto tax reporting.

Learn how blockchains work. I've been putting this off too long and after three years writing this newsletter it's starting to get a little embarrassing. I don't think it makes any difference for a crypto trader (and maybe even not for a crypto investor), but if I do finally stumble into a big crypto winner, knowing how blockchains work will at least let me pretend it was skill and not luck.

Look for value. For all the craziness around memecoins and all the cynicism about valuation, there's a countercurrent of protocols that are earning money and returning it to tokenholders. Some of these tokens are inexpensive by crypto standards and a small number of those are inexpensive by TradFi standards. 2025 may be the year when crypto becomes investable (and not just tradeable).

Look for memes. Embrace the silliness because this is still where most of the crypto money is to be made. As the hedge fund manager Richard Toh noted in a mea culpa letter to his investors, "sometimes the best investments are precisely the ones you cannot explain and probably make no sense."

Trade more. I'd tell anyone asking for advice in equities to trade less, but crypto is different. The people making money in crypto now are the ones that never stopped trading through the bear market. Crypto cycles through narratives so quickly that to have any chance of being in the right place when the big winners hit, you have to constantly stay in motion.

Get comfortable with having more money onchain. Self-custody still gives me the heebie-jeebies but when stablecoins yield 25% onchain, it feels negligent to have 90% of my cash making 4.7% in money market funds off-chain.

Get rugged. I've never been and that makes me feel like I haven't lived the full crypto experience. Also, I'd like to someday buy a token at a $100,000 market cap and watch it go to $100 million, and there's no way to do that if you don't risk being scammed every now and again.

Believe in something. Crypto is mostly ridiculous, but the only way to make money in it is to take it seriously.

Let's start doing that today.

— Byron Gilliam

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