YouHodler Pro Tip: Use the Barbell Strategy With MultiHODL
For longtime fans of YouHodler, you already know our fascination with the Barbell Strategy. To recap, the Barbell Strategy involves leaving the majority of one’s assets in safe, stable, and profitable investments while setting a smaller portion aside for riskier and potentially more profitable market actions. With this strategy, it's easier to manage risk and protect your portfolio from massive loss. When used in conjunction with our MultiHODL tool, efficiency is increased even more in addition to the potential for profit. Let’s examine some specific examples of how you can take advantage of this “pro-tip” today.
YouHodler Pro Tip: The 80/20 principle explained
For this specific example, we are going to use the 80/20 principle. On YouHodler, this means you’ll keep 80% of your assets in high-yield savings accounts earning 12% APR and using the other 20% to open up MultiHODL positions. A simplified version of this would be to put 80% of assets in a Tether (USDT) savings account and then open a Bitcoin (BTC) MultiHODL with the other 20%. However, as we’ve seen from the market this month, it’s much better to diversify your assets as they no longer move in unison.
Previously, most altcoins simply followed the path of Bitcoin but today, altcoins like Ethereum (ETH) and Ripple (XRP) are stronger and more independent evidenced by these charts of BTC and ETH below.
Hence, one should diversify its 80/20 portfolio using a variety of assets. That way, you maximize your chances of success with a variety of assets instead of counting on just one.
How to use the Barbell Strategy on YouHodler
To get started with the Barbell Strategy and MultiHODL, just follow these easy steps: (Since the minimum deposit amount for a savings account is $1,000, we will use that amount for this example).
- Deposit $1000 worth of Tether (USDT), USD Coin (USD), and PAX Gold (PAXG) into their respective YouHodler wallets where they will earn interest up to 12% APR.
- Take 20% of funds from each savings accounts to open MultiHODL positions in BTC, ETH, and XRP.
- Set your Profit/Loss Level (“low” = 175.34% potential profit, “medium” = 399.37% potential profit, “high” = 1276.9% potential profit).
- Choose your MultiHODL direction depending on the current market state. (UP or DOWN). Think of this as a long or short position.
Calculate your risk wisely and become an active HODLer
Sitting passively and watching your funds earn 12% per year is a safe investment but is it the best way to use your crypto’s potential? The answer is no. Everyone understands that high-risk investments have high payouts if they go as planned but there is a lot of uncertainty behind that investment. However, with the 80/20 principle, you are never investing more than 20% in a high-risk scenario. If that deal happens to go bad, you can still fall back on the 80% that’s earning passive interest. But if the deal is profitable, then you are looking at some potentially high returns with MultiHODL.
The best part about MultiHODL is you can set your own Profit/Risk level, giving you an extra layer of security beyond the 80/20 principal. Furthermore, the UP and DOWN buttons allow you to take advantage of market movements in bull and bear markets, further increasing your chance for success.
We have a saying at YouHodler: “lazy HODLers lose, active HODLers win.” Which one are you?