Market Veteran Raoul Pal Outlines 8 Steps to Become a Successful Crypto Investor

Raoul Pal, the founder and CEO of Real Vision, a leading financial media platform, has shared his insights on how to succeed in the crypto market. 

Pal, who is a former hedge fund manager, has been a vocal advocate of crypto and blockchain technology for years. He recently unveiled a list of eight steps that he believes are essential for anyone who wants to become a successful crypto investor.

Avoid Leverage

The first step is to avoid leverage, which is the use of borrowed funds to increase one’s exposure to an asset.

Leverage can amplify both gains and losses, but it also increases the risk of liquidation. Some market watchers warn that leverage is a “killer” in the volatile crypto market and advise investors to use only their own capital.

Avoid FOMO

Pal advises investors to avoid FOMO. FOMO is a psychological phenomenon that drives people to buy or sell an asset based on the fear of losing an opportunity or being left behind by the market.

Notably, FOMO can lead to irrational decisions and poor timing. As a result, investors are advised to have a clear strategy and stick to it.

Top 3 to 5 Assets

According to Pal, investors should focus on the top three to five assets as their main portfolio. Pal explains that diversification is important, but not too much. 

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His advice indicates that investors should concentrate on the most established and promising crypto projects, such as Bitcoin (BTC), Ethereum (ETH), and a few others, and avoid chasing after every new coin or token that comes along.

Self-Custody

The fourth step is to self-custody or use multi-signature wallets with good wallet hygiene. Self-custody involves holding one’s private keys. This way, they can avoid relying on third-party platforms or intermediaries, which may be hacked, compromised, or regulated. 

Multi-signature wallets are a type of self-custody that requires more than one key to authorize a transaction, adding an extra layer of security. Wallet hygiene involves the best practices of keeping one’s keys safe, such as using hardware wallets, encrypting backups, and updating software.

Small Degen Bag

Raoul Pal further notes that crypto investors should hold a small Degen bag, which is less than 10% of their portfolio. Degen is a slang term for degenerate, which describes a crypto investor who is willing to take high risks and gamble on speculative or experimental projects. 

Pal’s disclosure suggests that there is a place for such ventures in the crypto space, but investors should limit their exposure and allocate the majority of their funds to more reliable and long-term assets.

HODL

Several industry commentators have argued that cryptocurrency is a secular trend that will transform the world. As a result of this, Pal encourages investors to have a long-term vision and patience by HODLing their bags.

Zoom Out and Remove the Noise

For the seventh step, Raoul Pal advises investors to zoom out and remove the noise. This advice indicates that investors should look at the big picture and the fundamentals of the crypto market rather than getting distracted by the daily or hourly price movements. 

Removing the noise also entails educating oneself following credible sources of information, and ignoring naysayers and the typical escalating FUD, which often engulfs the crypto space.

Expect Corrections and BTFD

The eighth and final step is to expect 35% pullbacks frequently and to buy the (f****ing) dip (BTFD) if one can. The crypto scene is a highly volatile and cyclical market, and that sharp corrections are normal and inevitable.

Market veterans often suggest that investors should view these dips as opportunities to buy more of their favorite assets at a lower price.