In November 2021, I began investing in micro-caps (under $50M market cap). In the 3 months since then, I've 4xed my microcap portfolio.

Below is Part 1 of 3 on how Alex Becker's Micro-Cap investing strategies helped me achieve that. This part will be on understanding the investing mindset. If you want to keep following for the rest, subscribe to my substack!

Trading Crypto is risky, period. It's not like top 25 coins don't drop 40%. Microcaps just have massively higher rewards (if you're willing to put in the work).

So, with that in mind, a few points to establish baseline:

• If you put $50 in Bitcoin at the start of 2021. At Bitcoin's peak, you would have had ~$100 in your account. You wouldn't have made life-changing wealth. However, if you're looking for safe 2-3x returns and a lot less headache following a niche, the Top 25 cryptos make a LOT of sense.
• Micro-caps allow you to work with a lot lower capital. To make significant returns in the Top 25, you need big chunks of money put away in them. For Micro-caps, you can begin growing your portfolio with smaller $500 / $1,000 bets.
• I still have 60% of my total Crypto portfolio in the Top 25 to manage risk. But all my portfolio growth has been through micro-caps, even through the correction.

The following are the main mental models you need to know when investing in micro-caps:

Mental Model 1: Micro-caps are trading sentiment. Not value investing. Invest accordingly.

Alex's first lesson is that majority of micro-cap tokens are for projects that are either making no money or in alpha. The token barely correlates with the company's value.

Therefore, you must know:

• You are trading on investor sentiment for a project. So you have to be looking at the factors that drive that sentiment (Marketing, Visuals, Community, Narratives).
• Selling doesn't mean you don't have faith in a specific company. The token is purely speculative.
• Buying needs to be hard. Selling needs to be easy. If you're up on a coin 2x, it never hurts to take profit. You can always find another promising project.

Mental Model 2: Micro-caps require you to niche down and pay attention.

To find high potential micro-caps, you need to understand a niche well enough to pick up on trends and sentiment early.

Alex likens it to watching storefronts at a mall. If you're only looking at one door, you're obviously going to understand what people are buying and what they're stocking. If you're trying to watch the whole mall, you're going to do a lot of walking and get very little insight.

Pick your corner. Study it. Ignore the rest as an investor.

Tomorrow, I'll share how to look at buy opportunities and when to time them.