How This Trader Just Turned $8000 into $5,712,184,031 – Yes $5.7 BILLION – With ONE TRADE (Is This The Greatest Trade Of All Time?) – And How Can We Do That?

This Trader Just Turned 8000
Graphic © 8figurestack.com. Images – Shutterstock 554244451 (under license), Pixabay 6723430 (PD)

Insert boring-but-necessary disclaimer – this is not financial advice, you are probably going to lose money in crypto, do your own research, etc.

I caught this INSANE story posted by Morning Brew – and it’s too wild not to discuss. There is TONS we can learn from this!!

The craziest part about this story is that it looks like it is actually true…

So it turns out that cryptocurrency researchers are trawling through archives of old trades and not only learning from their discoveries but announcing unusual findings. This is now “a thing”. Blockchain trading archives are visible, accessible data; you can for example see the wallet address in the tweet I embedded above.

There are even apps now that facilitate this exploration – such as etherscan.io Look at these – or any crypto chart in depth – and you will see, nestled innocently among the small to medium sized trades, occasional giant trades made by crypto whales.

… and this one researcher uncovered this trade. Buying $8,000 worth of what was then (2020) an unheard-of crypto token that was “way down in the weeds” somewhere. Maybe number 3000+ in the Coinmarketcap charts. Just another memecoin / shitcoin……. that turned into a top 10 coin.

Now we don’t yet know whether that wallet held on to all $8,000 worth of SHIBA INU that they bought in 2020.

However if they did, then that gain of 71,400,000% makes this quite possibly the single greatest trade of all time.

(As well as perfectly timed hype for the holiday-season crypto boom madness that we have seen before…)

How Can I Do What They Did?

Let’s get to the point. The reason why you are here. Enough about them and what they did; how can YOU get your slice of the pie? 🙂

I’ve got some great angles and insight on this and think you are going to love it, so buckle up and lets dive in. Toss the charts out of the window for a minute… and let’s consider some macro factors.

1) Forget SHIB. It’s Done! Pick The Next Mega-Boom Coin.

Doing what our SHIB trader did is theoretically still possible in the booming crypto market; not because of SHIB, but because it’s quite likely that there will be other stories like this in the next few years – perhaps even bigger, as the amount of money in this space continues to expand. However it almost certainly won’t happen again with SHIB. It’s too late for that.

The insanity of SHIB’s mega-boom will however likely push it higher – as it’s now mainstream news worldwide. Depending how many people pile into the SHIB tulip bubble, it could possibly go another 10x or maybe another 100x. But another 1,000,000X seems extremely unlikely. Bet your house AGAINST it type unlikely. It’s already done its thing. Remember the saying – if you see a bandwagon, it’s too late.

In other words, the play here is to forget SHIB and to search the wilderness of new projects and micro caps for the next big winner.

And how to search for these gems, pray tell?

1) 100x and even 1000X coins are not all that rare. There are quite a few people already doing this research and sharing their calls. You can learn a lot from the best of these. Typically, you can see them on Twitter. Great example – SecretsOfCrypto (amazing content).

2) Scour either Coinmarketcap or Coingecko and skip the top 1000. Instead, trawl through the mud, the unheard-of stuff down below… looking for something that jumps out. Apply a research checklist such as the excellent altcoin research checklist shared by SecretsOfCrypto (it’s the second image, I could not figure out how to separate the tweets sorry):

3) Look at sites such as icodrops.com for the new ICOs.

You will quickly see just how many of these micro-cap projects there are to choose from – over 10,000 – and how overwhelming it can be. Your odds of picking a big winner are slim. You will also have to be super patient – as often these might sit in the digital wasteland for months or even a year or more before blowing up (if they do indeed blow up, which some never do…) You will also need to have the skills to move the right digital assets onto the right exchange and position yourself to make the purchase. And then, you will need the diamond hands to HODL all the way through all the dips and troughs, even when it is 1000x, all the way to the million x line..

Still, if you did happen to pick the next “million x” coin and do all of the above correctly – then buying $20 worth would land you a cool 20 million…

2) Branding Is CRITICAL

One thing that almost nobody talks about in crypto is branding. SHIB may be “just another memecoin” – however it has FANTASTIC branding. Talk about mass appeal! The name. The logo. The overall vibe. (Have you read the “woof paper“?) It’s marketing genius!

Everyone looks at the top coins for “signals” and clues as to what will be next – but one thing I have never heard anyone talk about is that the top coins ALL have fantastic branding. Name, visuals, aesthetics, flavour. Flavour! Remember that! History has shown us that you can sell a billion dollars worth of an arguably unhealthy food if it has great flavour! Same goes with cryptos!

Bitcoin: Not only a groundbreaking technology, but a PERFECT name. Perfect!!! Think about it!!! Think about how truly great this name is. It rolls off the tongue as though its stardom was inevitable. Do you seriously think we would be where we are today if they had decided to call it “turdcoin”. Even if it had the absolute same technology, same utility: Terrible name = FAIL. Bitcoin also had that super cool logo…

bitcoinimage – Shutterstock 554244451 (under license)

Look at it. Looking like a dollar symbol but using the letter B, embossed onto a gold coin. How sexy is that? Doesn’t it make you want it? It’s pure fluff… it doesn’t even exist! “It’s not even on the elemental chart.” It doesn’t matter… nobody cares! Want is what matters.

Absolute branding genius. Let’s move on. Ethereum:

ethimage – Shutterstock 709036480 (under license)

Amazing name. Doesn’t it just sound mystical and magical? Combined with that pyramidal symbol; hinting at ancient mysteries, pointing upwards as though indicating that it is going up, up, up and nowhere else. Again, it’s incredibly appealing. The manufacture of desire! Complete branding brilliance.

Now look through more top coins. See the pattern? You are welcome 😉

You could almost go so far as to say that the branding is even more important than the “real world benefits” – and that SHIB has proven this. We already knew it, in fact. Just look around you at the world’s top brands.

The fact that branding often has more power than utility is is a key, eye-opening fact that most simply cannot accept.. It’s all wrong. It’s outrageous. It’s offensive.

But it works. Now let’s talk about outrage…

3) Disruptive – In A Seemingly Outrageous Or Nonsensical Way

This is also critical. Bitcoin disrupts money. It does something that “normal money” simply cannot do.

The other thing about bitcoin that many forget is that it was massively controversial back in the day. It’s been accepted now – but in the beginning, it caused true outrage. People were infuriated that this “fake money” could be treated as though it was a “real asset” even though it was essentially made out of nothing more than data in computers. Money made out of ones and zeros? What an outrage! Totally ephemeral! Having no substance whatsoever! No real gold to get your hands on. What happens if the power goes out? What happens if it is hacked? What an outrage!

Let’s not forget that paper money too is “just pieces of paper”! Very sexy-looking pieces of paper though, as pieces of paper go – did you notice that? Great branding!

Back to the topic. The outrage was a CRITICAL component of Bitcoin’s success. Understand this!!! As Bitcoin’s price rose, so did the outrage. How DARE this DESPICABLE “unreal money” actually become something real!!! And the outrage spiked news stories, which got everyone talking, which made more people jump in, which made the price rise more, which caused more outrage and more publicity…

Now do you see it? Same with DOGE. A JOKE coin that went ballistic. What an outrage! Now SHIB. Another “stupid dog coin” going up 845% in a few days, while all those well-put together “real” tech projects do 10% at best!

There are many more examples of outrage helping a company along. Tesla motors: remember the outrage against them from the legacy auto industry?

Now look at NFTs. What an OUTRAGE – that a stupid JPEG of garbage non-art, created randomly by a computer, can become valuable.

In today’s news – a CryptoPunk NFT just sold for $532 MILLION

How outrageous is that? How totally punk rock to slap art in the face and make $532 million in the process. 🙂 A perfect example of outrage marketing…

4) Timing is everything

In crypto, timing really is everything.

Most people trade in the complete opposite way to the profitable way. They pile their money “on the horse that’s already winning”. That might work for a horse race (if you were allowed to place bets in the final furlong!) but that’s not how it works in the markets.

This phenomenon is what causes people to “buy the top”. They see how much it has already gone up and think “it’s bound to go higher”.

But imagine if you had bought low – months ago – and were now seeing that price. You would be thinking I’m taking my money RIGHT NOW – before this thing tanks! So those extreme highs means that people are up, big time – which means they are selling – and you guessed it. That means it is likely on the way down soon. Once a few whales cash out and it starts to dip, lots of other people will cash out, which will make it dip more… and the snowball effect will amplify the sell-off and make it tank.

It’s pure herd instinct! But the wolf doesn’t do what the herd is doing…

People “buy their emotions”. They buy when the excitement is already on something. When it’s already gone up. This is the wrong time.

The wolf zigs when everyone else zags. The wolf trades asymmetrically.

How many times have we heard the world’s greatest investors illustrate this? – such as Warren Buffett – with his famous quote “Be fearful when everyone else is greedy and be greedy when everyone else is fearful.” And the famous Baron Rothschild quote “Buy when there is blood in the streets, even if the blood is your own.”

Think about it. At those times – when there is “blood in the streets” of the markets – the mindset of the masses will be “@#$% this piece of @#$% coin. @#$% cryptocurrency. I need to get OUT of this @#$% NOW before it ruins me any more!!” At that point, they are offloading (too low!) – wallet and pride wounded, overtaken by fear or even panic, without thinking, without strategy.

That’s the buy signal!

Others too have said that when we see a boom of “dog coins” and other irrational stuff; when the mass public is hyped to the max – that’s when it’s time to call the top.

So think about our SHIB trader. He/she bought it when it was (sorry)… a pile of dogshit. 🙂 When nobody wanted it. When it didn’t look like it was going to do anything.

Making a wild guess here – I highly doubt it was their first rodeo. This person may well have already made a big pile on crypto and deliberately decided to take 10% of that and buy 50 new, obscure projects before anyone cared about them. It’s HIGHLY unlikely that they put their last $8,000 on some unheard-of token before anyone in the world was interested in it.

It’s also possible that they were “close to the action”. They might have known the credentials of the players on the SHIB team and thought “this is going to be big”.

Summary

So now you have four interesting macro indicators to add into the mix of your coin research, along with all the other technical and macroeconomic factors that everyone else talks about! Look for something that hasn’t done its thing yet, that has massive raw appeal, that has some kind of outrage or talking point that goes viral – and look for an entry point into the market when the general sentiment is bad, fearful or otherwise maximally negative.

Further Notes And Important Takeaways:

Note #1: This Is Wealth Transfer, Not Wealth Creation

Wealth is not being created here (unless the project has some real world utility). This is essentially money moving from one pocket to another. It’s important to understand this and its implications. Let’s assume for the sake of argument that SHIB is “just a memecoin” and despite the charitable focus and other interesting ideas, let’s assume that one day it will go to zero.

Let’s also assume that our early buyer sells high and cashes in right now. That means that all of the $5.7 billion earned from this trade ultimately came from other buyers who “bought the top” – thinking it was going to go higher. Maybe it does go higher. Then that money is passed on from other buyers who bought even higher. So it’s just money flowing from one pair of hands to another.

For every cryptocurrency winner, there is likely to be a cryptocurrency loser – or perhaps ten. And all of the money that went to make up this crazy story came from someone else’s pockets.

Note #2: The House Always Wins

Now this is key. In the casino, the odds and probabilities are finely calculated so that the house gets their take and always profits. This means that on balance, if you averaged out all the winners and the losers, everyone else except the casino is on a loss.

The same applies here. How? Because everyone buying and selling crypto is getting dinged multiple times on the way in and on the way out.

First, when you buy crypto with fiat currency – lets say on Coinbase or wherever, Coinbase charges a fee. Quite a savage fee – in my humble opinion. But you will pay it, because you are caught up in the rush of excitement and their 3% seems like a trifle compared to the 10,000% you are about to make… oh and if you bought with credit card, you might get a fee there too.

Second, they charge a spread. In addition to the fee! You probably didn’t even notice. A spread is a small (or not so small!) adjustment to the exchange rate – so that you get dinged a little bit on the swap each time there is an exchange transaction.

Third, there is a fee when you bounce your shiny new bitcoin to the trading platform you are about to plunder.

Fourth, each trade on the exchanges has a maker / taker fee. This might typically be 0.1% – small enough to make a minimal difference to the profitability of your trades – however on the billions of dollars of transaction volume pumping through the big exchanges daily, that adds up to a huge amount. Not to discredit the exchanges – as the task of running a crypto exchange is reportedly one of the most challenging / demanding businesses in the world.

Fifth, you get dinged again on both the platform fees AND on the spreads on the way out into fiat again!

And Sixth – but certainly not least… every profitable trade is taxed. More than once! Three times, in fact. Let’s say our intrepid SHIB trader cashes out his billions. This person is going to get hit with capital gains tax, which depending on their location, could be 28% or even more! And you thought Coinbase fees were high! 🙂 But it gets worse… lets say next they buy a house – bam. They get hit again with another big slice – real estate taxes. They then go Christmas shopping. Bam – sales tax / value added tax on everything. And then at the end of the day, when the curtain comes down and they try to leave whatever they have left to their kids – bam. Taxed a third time. The final nail in the coffin: Estate tax, possibly another 35% of what remains.

Can you believe all that?? Now you know what I mean when I say the house always wins… 😉 And this is “decentralized finance” baby! Where we are going to stick it to the banks and to the man and we are going to take our power back!

Mmhmm. Sure.

The only ways to “win” this game are therefore a) not to play (that could hardly be called winning) and b) to win so extremely big that even after the crypto exchange, the various financial intermediaries and finally Big Daddy have taken their slice, you still have F.U. money left. At this point your troubles are not over, though – you’ll probably want absolutely first class accountants; then you are going to have to deal with everyone else wanting to get their hands on your gold and so you will move to a different part of the world – and end up living as a semi-reclusive tax-exile expat in Monaco or similar. Fun times! It could be worse.

And it probably won’t be you. 😉

Note #3: Take Profit Before It Goes Back Down

There is an old saying among traders “Never let a profitable trade turn into a loss” and this is a truth. Taking profit is always ok – because you don’t know when the top will be. Nobody does – and when it happens, in crypto, you typically get a big, fast correction. In other words, if you leave it in too long, hoping to squeeze the last drop of juice out of the orange, you might get caught by the drop.

A good strategy here is to “ladder out”. This means sell some at various profit percentages. This way, you sell some when it’s up, but leave some in, in case it goes higher – and set a stop-loss “in profit”. This is a great position to be in and mean that even if it absolutely tanks tomorrow, you still made money! You have, however, still got “unlimited upside potential” and can then relax. Your work is done and you can let it run. Take some more profit when it goes higher again!

A nice tactic in crypto is to take 50% out when it goes 2x. This means you got all your money back and the remainder is “the house’s money” that you can relax about because it’s all upside (aside from the fees and taxes).

But how do you take profit when you have $5.7 billion and it would crash the market if you did?

First world problems 😉 Enjoy the ride… Staxxx

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