‘Wolf of All Streets’ crypto trader Scott Melker holds a 15% cash allocation for market environments exactly like this, and shares 10 altcoin projects he caught last week.
Master trader suffered indirect loss in the LUNA event
Some of the most seasoned crypto traders and crypto investors have been blamed for the explosion of the Terra ecosystem, which had a market cap of $33 billion just a month ago. got caught. Crypto trader Scott Melker, also known as the “Wolf of All Streets,” was unable to avoid the effects of the volatility, despite being out of the top ten tokens. Melker states:
I have never purchased or held a LUNA or UST. However, I have invested in hedge funds that buy in bulk. So I clearly suffered losses there. And unfortunately, when you invest in a fund, you assume they are doing the work for you.
Fortunately for Melker, the hedge fund was only a small part of a carefully constructed, highly diversified portfolio. “I have to be very, very clear that I see myself as an investor first and always, even when I am at the peak of my trading,” Melker said in a May 2021 statement. “Whoever asks me, I’ll say I’m a trading investor,” he said.
“People will lose a lot of money on altcoin projects that will never come back”
Melker is known for his perspective on crypto trading, where he provides market expertise to the masses through his daily newsletter. Still, he takes an investor approach that allocates 70% of his portfolio to long-term holdings, 15% to cash and 15% to trading. “I like to hold this allocation in a bull market or a bear market,” Melker says.
Currently, Melker believes that crypto is in the depths of a bear market and has reached a point where it could see the mass extinction of crypto projects that are unable to sustain their business models or that are overblown. “People will probably lose a lot of money on projects that will never come back, but that’s the nature of any bubble,” Melker says.
Scott Melker: Low is purely relative for investment
But times like these are exactly when investors need that money allocation to buy from the bottom, Melker says, and here’s how details:
I bought Bitcoin at $33,000; $30,000; $28,000; $26,000. All from this dive. I’m also buying Ethereum here and now at some point, I’m actually going to balance more. Because I use the dry powder I hold in my hand just for this reason.
Melker says what’s happening in the Terra ecosystem is a terrible optic for crypto, especially when regulators laser-focus the market. But he believes it also strengthens the ecosystem, as investors will now look wide-eyed at algorithmic stablecoins. “It didn’t really blow up the market,” Melker says, adding that he doesn’t think it’s the end. Melker continues:
Low is purely relative. So, even if it drops even lower, I think buying from this region will bear fruit in the long run.
Melker filled his basket with Bitcoin and these altcoin projects
As you can follow from cryptokoin.com news The past week has brought a host of potential signals that could indicate that negative emotions are bottoming out. Melker makes the following assessment for Bitcoin:
Bitcoin fell to $25,000. And then some big, bulky volume and demand kick in, pulling the price back to its summer 2021 low of around $28,600. To me that was a very good signal, at least for now the bottom has come.
During this time, Melker has jumped in and mainly filled its current positions: Bitcoin (BTC), Ethereum (ETH), Solana (SOL), Avalanche (AVAX) and Elrond ( EGLD) was purchased. Melker explains the rationale for investing in altcoins:
I’ve never been into Solana for the entire run. And so I started buying Solana for $116 on the way. So I’m not claiming it’s a divine act. I bought it for $116, I think 80’s, 80 to $82 and then around mid 50’s because I want to keep it for 10 years.
Melker, on the equity side, bought Coinbase (COIN), Uber (UBER) and more Amazon (AMZN) and Apple (AAPL). “I bought an Ark (ARKK), which has probably the most negative sentiment of any ETF in history right now,” Melker says.
One of the approaches that Melker took in last year’s bull rally was to invest in the fundamental building blocks of the crypto ecosystem, the layers, rather than trying to choose the best metaverse or NFT projects. Melker says it is now clear that many of these tiers cannot scale to mainstream adoption and that tier two scaling solutions will need to step in. He adds:
I am a long-term investor at Polygon (MATIC). There is another interesting Metis (METIS) that I have. But I don’t get the second layers that much. But this is definitely an area that I will focus heavily on in the next phase.
