[AMA] Risk management for crypto investors, Jan 26

Hello Reddit,

I'm Sylvain Chassang, an Econ Prof at Princeton, and a cautiously optimistic crypto investor since 2018. I'm here to discuss risk management, and the work we do at www.golucid.io, where I help build and maintain risk-managed portfolio indices. Our mission is to help people take better risks.

I'll be live Friday January 26 from 9AM to noon, New York time (2pm to 5pm UTC).

My goal for this AMA is to have a conversation on risk-management in crypto, and learn from your experiences. Ask me anything about what we do. Bring up the challenges you’ve faced as investors, and aspects of the market that puzzle you. Share tips on how you manage your own risk exposure. Feel free to get into the nitty gritty of risk-management techniques and implementation challenges.

Note: everything I say is for discussion & educational purposes; nothing I say should be taken as financial or legal advice.

Sylvain

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Risk Management Handbook

As prep for this AMA, I wrote a guide on risk management for crypto. It’s available here makes the following points:

  1. Risk management in crypto isn't just about avoiding losses, it can help you compound faster.
  2. Volatility is not always a bad sign in crypto. Unlike equities, high volatility periods in crypto are not associated with lower returns.
  3. Sudden crashes grab headlines, but long sequences of small losses are surprisingly frequent and can erode wealth.
  4. Regular rebalancing and drawdown control can both help you deal with those risks and compound faster.
  5. Risk management always causes regret over the short run. If you can, it’s better not to look.

I hope this guide is useful to you.

8 thoughts on “[AMA] Risk management for crypto investors, Jan 26”

  1. Prof Chassang from Princeton University has burned 1,300 moons to host this AMA on crypto risks management.

    Transaction: https://nova-explorer.arbitrum.io/tx/0xf36f799d0136aae7c18dbba7ddb16d84d167e0da4f3547d04f47e8741a0d80fd

  2. Excited for the AMA, Sylvain! Would love to dive into discussions about choosing projects for a portfolio, determining the minimum number of coins, and understanding exit points. Your insights on these aspects of risk management will be highly valuable. See you on Friday!

  3. So, this is basically marketing and lead gene? Just burn some moons and spam the membership here? This sub is really changing.

    1. Do we have a factor model (similar to Cahart or Fama and French) for crypto?

    2. To what extent will institution participation in BTC help in reducing volatility over time?

  8. Given the guide above, what trading strategy would meet most of the items in the list? I am range trading with only 1/10 – 1/20 of the actual trading budget for each position. I always buy when it’s going down x% and always sell when it’s going up x%. with some adjustments in the price if there’s a support or resistance near. What strategy would be better?

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