After flirting with it all my life, I’ve decided to try seriously investing in crypto.

These are my notes and results, working from building up an investment strategy to analyzing my results.

Foundational Principles

1. Everything is institutionally rigged.
2. Everything is fraudulent until proven otherwise.
3. I am the exit liquidity.
4. A maximum of $100 USD is to be spent (subject to change).

Risk Management

1. Stop-Loss and Take-Profit: Every trade should be made with predefined exit points for loss (stop-loss) and profit (take-profit).
2. 1—2% rule: No more than 1—2% of the total portfolio capital should be risked on a single trade.
3. Position Sizing: Determine the amount of a thing to purchase by its distance to the stop-loss.

Deriving My Advanced Risk Management Algorithm

Principles:

1. It should be easy to do.

I: Simple Example

Suppose a $100 portfolio.

I am willing to risk 2% ($2) on a trade.

I use my gigabrain and determine the stop-loss should be 10% below the entry price.¹

$2 is 10% of $20, so my position size is $20.

II: Formal Definition

Let:

• A: Total account value ($100)
• r: Fraction I’m willing to risk (2%)
• s: Stop-loss percentage (10%)

Then:

• Entry = Ar / s, and
• Stop-Loss = Entry * (1 - s)
• Take-Profit = Dunno I’ll do this later.

III: Slippage & Fees

Subtract Ar from Entry. Boomshakalaka.

The Greatest Enemy

Exchange Fees

• CEX: Centralized Exchange fees are typically 0.1% on buying and selling.
• DEX: Decentralized Exchange fees consume all.²

Exchanges also employ a large amount of money sink mechanics like leverage and derivatives.³

DeFi

DeFi (Decentralized Finance) requires and returns a Gacha-game amount of useless currencies that makes the money you gave them increasingly imaginary.

Also, higher APYs are directly linked to your money becoming imaginary because AMM algorithm this, LP that, rebalancing your crap, and—did you already forget?—you’re the exit liquidity.

Airdrops

The promise of free money that costs real time and money that also usually is:

1. Not real, and
2. Malicious.

The future of finance is Roblox and Diablo IV.

The Plan

After researching, I’ve come to the conclusion that I’m going to pocket $50 due to a total loss of confidence.

I exit when I hit $0 or $100.⁴

The plan is to see how far I can get with swing trading altcoins with large amounts of liquid, and to see if I can outpace the trading fees at any point in time.

I’ll use my Advanced Risk Management Algorithm, henceforth called ARMA⁵, to set my stop-loss and entry values; and I’ll figure out the take-profit on the fly as I uncover fees and limitations.

It would be hilarious to add Ar to Entry, but I think fees are going to be significantly higher. ARMA is a quick heuristic, not a real strategy.

Picking my Centralized Exchange

Binance

I had heard of Binance a lot, so I decided to visit their site.

I was immediately told to go to their US-specific site.

This simple action gave me pause and instead go to their Wikipedia page.

”Binance Admits It Engaged in Anti-Money Laundering, Unlicensed Money Transmitting, and Sanctions Violations in Largest Corporate Resolution to Include Criminal Charges for an Executive”

— U.S. Department of Justice - Office of Public Affairs, November 2023⁶

4 years before the above press release, Binance was in the middle of fighting the above case and made the decision to simply redirect U.S. customers to their new exchange, Binance.us.⁷

In 2023 Changpeng Zhao, the CEO of Binance, resigned, served four months in prison, and is now the advisor to both the Pakistan crypto council and the President of the Kyrgyz Republic⁸ (both of these appointments occurred in 2025).

In May 2025, Forbes estimated his net work to be $64.8 billion, making him the 2nd-richest Canadian and 24th-richest man in the world.

And that’s why I was redirected to Binance.us when I visited Binance.com.

Bad Luck

Alright so, bad luck; only happened to pick the largest exchange in the world, I’ll just pick a different exchange.

Kraken to Discontinue Unregistered Offer and Sale of Crypto Asset Staking-As-A-Service Program and Pay $30 Million to Settle SEC Charges

— U.S. Securities and Exchange Commission - Press Releases, May 2025

Attorney General James Recovers $50 Million from Crypto Firm Gemini for Defrauded Investors

Gemini Banned from Operating Any Crypto Lending Programs in New York

— New York State Attorney General - Press Releases, June 2024

And finally:

SEC Charges Coinbase for Operating as an Unregistered Securities Exchange, Broker, and Clearing Agency

— U.S. Securities and Exchange Commission - Press Releases, June 2023

The SEC lawsuit especially pointed out Coinbase’s staking program, a feature that has something to do with some other high-profile cases, but I can’t quite put my finger on it.

Eh, it’s probably nothing.

The case was dismissed on February 21, 2025, the month after Donald Trump’s reelection, with Coinbase publishing a victorious press release:

“What changed over those two years was the political leadership at the SEC. In its war against crypto it acted as if it was above the law, usurping the power of Congress as set forth in the Constitution. And after millions in legal costs and fees, countless employee hours, and years of protracted litigation, we have successfully protected our customers’ rights, and held the SEC accountable.”

— “Righting a major wrong” , by Paul Grewal (CLO of Coinbase); February 2025

Updated Strategy

After careful consideration, I’ve decided to update my strategy to now put $0 into cryptocurrency.

I instead transferred $69.420 into from my savings into my brokerage account and bought $WOOF.

Strategy Postmortem and Analysis

General:

• Total Investment: 0
• Total Profit: 0
• ROI: Undefined

Risk:

• Percentage Loss: 0%
• Downside Risk: Eliminated!
• Standard Deviation: 0
• Maximum Drawdown: 0%

Tax:

• Realized Gains: $0
• Unrealized Gains: $0
• Taxable Events: 0

Overall, I believe my strategy excelled at risk-management and tax-simplicity. It might not be a $64 billion-dollar strategy, but I believe it’s one many retail investors should pursue with respect to cryptocurrency.