How Much Crypto Should I Hold?

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Losing significant money

This month I lost 30k in crypto. It is time to reflect and make principles to prevent myself from repeating the mistake.

Most of my crypto was in Terra ecosystem's tokens, and the recent Luna crash wiped them out. I should've been more aware because I was working at Anchor protocol, but I ended up selling at the last moment.

Spend attention wisely

But I didn't just lose money, I also lost a lot of attention without gaining any knowledge or judgment. It was a complete waste. That leads us to the principle - "Attention is a limited precious resource - use it wisely.”

Listening to crypto podcasts, watching YouTube videos, and constantly checking token prices and Defi gains - it all took attention, yet at the same time, I didn't learn anything. It was all shallow attention, with no deep thinking.

We spend our limited attention on different buskets, like family, friends, work, entertainment, hobbies, health, etc. The distribution between those buskets depends on the current life stage and values.

Work and finances are tightly connected, so I put crypto investments into the work category.

Once we have enough money to cover the bills, we want to grow our specific knowledge and judgment by giving attention to the right kind of work.

The question is how much crypto is worth your attention. If you already work in web3 or want to tie your career to crypto, it makes sense to double down and spend a lot of attention and thinking power there. But if you don't approach crypto investments as real work, you don't need to pay attention to it. It's much better to focus on your career, skills, connections, business, whatever will help you make money over the long term.

Crypto is not bad

At the same time, I can't be angry at crypto - it's just a mechanism. I let greed drive my decisions without spending effort to get to the first principles.

Moving forward, I will be more aware of where my attention goes. Putting significant money into risky assets will inevitably steal your attention, and that's how I will know that I'm doing something wrong with my money.

Because of the sheer volume of talent going into web3, we likely see something valuable coming out of crypto. At my current stage of life, I want to give attention to other things. The only investment I can forget about is to put a maximum of 5% of my portfolio in Bitcoin and Ethereum.