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In Volatile Markets, Raoul Pal Advises Investors on Key Strategies
- Raoul Pal emphasises prudent crypto investing by avoiding leverage and FOMO, suggesting limiting investments to a few major assets and keeping riskier ones like meme coins below 10% of the portfolio.
- He advocates for HODLing and self-custody, recommending the use of hardware wallets for major holdings.
- Additionally, performing good wallet hygiene includes regular updates and securing seed phrases, staying informed about security risks, and using intermediary wallets for dApps and DeFi interactions.
- And while it’s important to “zoom out and remove the noise” and not obsess over daily news, he also recognises the value in being alert to market pullbacks.
Amid the current market turmoil and volatility, Founder and CEO of RealVision and former Goldman Sachs Manager Raoul Pal reminds investors about some key principles for investing in crypto.
No Leverage, No FOMO
While it’s one thing to rush into your next meme coin due to the fear of missing out (FOMO), adding leverage creates an increasingly volatile situation. Pal addresses whether you should give in to FOMO by advising to limit holdings to three to five major assets. For small caps, meme coins, or other riskier assets, he suggests limiting them to less than 10% of your total portfolio.
Only trade a small Degen bag <10%
Raoul Pal HODL and Self-Custody
Remember the saying “Not your keys, not your crypto?” Pal suggests using a hardware wallet and following best practices in managing risk:
- Always use a hardware wallet for significant holdings that you don’t need to frequently access.
- Keep the wallet up to date (especially if it’s a software wallet – a so-called ‘hot’ wallet).
- Have multiple copies of your seed phrase and store them in secure locations – but don’t share this with others.
- Check your seed phrases from time to time, ensuring they are readable and consider a metal backup such as Trezor Shamir or Cryptosteel.
- Keep up to date on developments and educate yourself about hacks, phishing attacks, and other security risks.
- Don’t directly expose your wallet to dApps and DeFi, use a sub-wallet such as a software wallet as an intermediary.
And then, as Pal says, “HODL over a longer time horizon.”
BTFD and Prepare for Pullbacks
Although Pal says “zoom out and remove the noise,” indicating that a focus on being glued to the daily news and latest (price) developments is not helpful, especially when you HODL to the moon, he acknowledges that there are cases where paying attention is beneficial.
Pal says that pullbacks are part and parcel of the volatility in crypto – sometimes up to 35% (and more). But it pays to “BTFD” – if you are unable to decipher this, just know that buying the dip is worth doing, if you still have liquidity. And if you need a hint for when to get ready to buy the dip, Jim Cramer is always ready to lend a helping hand – not financial advice of course.
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
