The sophomore’s guide for the crypto class of 2025: Chapter 1

It is the second year or sophomore year for the class of 2025. Generally, years 2 and 3 are most challenging as the crypto market goes into the winter season. These two years also make you a resilient anti-fragile investor.

I thought it would be a good idea to introduce some new/improvised concepts. Chapter 2 described the parts per million or ppm model for building your crypto portfolio. This blog presents ppm model 2, reflecting my additional learnings and observations in the last year.

Circulating Supply vs. Total Supply

In ppm-1, I used the circulating supply of a coin as a base to determine ppm. Circulating supply is a moving target and suffers various challenges, including inflation. PPM-2 uses Adjusted Maximum Supply, a better base for calculating ppm.

Adjusted Maximum Supply (AMS) is the total number of coins that will ever exist, mins burned & lost coins. AMS is a theoretical maximum, while total supply is the number of coins created so far (circulating or not). ETH is an interesting exception where all three measures are the same.

One size does not fit it all: Regular, Super Size Me! & YOLO.

In ppm-1, I described the concept of a uniform bucket size measured in ppm units. When you start building your crypto portfolio, I recommend sticking with a uniform bucket size for at least a year. PPM-2 describes an advanced model with three bucket sizes.

The first one is a regular bucket size that remains the default. The second bucket is called “Super Size Me,” which is 2x the standard size. The third bucket is YOLO, which is for one particular cryptocurrency or token.

“Super Size Me” or SSM bucket is helpful when you want to hold some short-term positions and long-term buy-and-hold positions. There can be various circumstantial reasons for it. For example, I am using the SSM bucket for XRP as the XRP price is disproportionately depressed due to the legal circus they are going through.

YOLO, the Super Bucket

“You Only Live Once,” or YOLO, is a bucket for one exceptional crypto you love. For a lot of folks, it is bitcoin. It can also be for a crypto project, where you want to get involved deeper than just an investor.

Summary

It would be best if you used the advanced ppm model for your cryptocurrency portfolio only when you are super comfortable with the basic ppm model. The basic ppm model trains you to stick to the standard you have set for yourself and not get swayed by the price action. The advanced ppm model introduces two new buckets, SSM and YOLO, for keeping some extra coins and for special projects.