MultiHodl bets and the psychology of risk in crypto

I wanted to start writing a post about how to get out of bad bets. But instead I read some articles about risk psychology and I think that’s the best way to explain why we end up loosing many not only on betting, but in investing on general.
The best advice I can give on YouHodler Multi HODL up bets on crypto like Bitcoin or Ethereum is that you need to be patient. And unless you made a very bad choice, like at the top before there is price correction, you should always wait and get out in the winning side. Now if you are not patient enough is better you don’t use Multi HODL because you can loose a lot of money with fear of losing or FOMO bets (Fear of missing out)
Make a technical analysis and a plan. Stick to it and be patient.
Crypto mostly goes up except on special days where it can have big correction

In my personal opinion what plays mostly against a good bet or investment is impatience, fear to loose, and being too emotional. Actually if you want to be a good player when making a bet, you need to learn to use that feelings on your side, but naturally this forces play against you. You could wait some minutes more and get out of the bet 10% higher, but you could not stand the first two red candles and got out before time, and like this multiple different variations that are in the history of my bad bets.
Risk-taking behavior refers to situations in which a decision is made whose consequences depend on the outcomes of future events. Events that we study previously and are quite sure that go in one direction. But even the most perfect analyst can make a bad guess and the top of that the prices of Cryptocurrency are influenced by so many things with many big players and institutions buying and selling millions that the most bully upwards run can end up in a scary downfall at any moment of the day. Unpredictable.
To resume it in a few words the fact is that most of the time our knowledge of probabilities is far from exact. We can study the last movement days, draw on the chart and make prediction lines, even read analysis of experts that are years studying this markets and still with all this information we can fail. Because behind the visualization of a stock price chart there is a billion dollars market, with humans taking decisions all over the world, updating that price movements. It’s not humanly possible to predict what will be the direction for the next days, not to say hours. We can estimate it, but then the prices can give us a cold bath of reality when the outcome is much different from our prediction.

The experimentalist’s view

Psychologists Kahneman and Tversky in 1979 asked subjects questions similar to this:
Which would you rather have, $3,000 for sure or an 80% chance of winning $4,000?
Most subjects prefer the $3,000 for sure even though the expected value of the gamble is higher:
0.80 x $4,000 = $3,200.

This kind of preferences are conventionally labeled “risk aversion” as are preferences favoring a 90% chance of winning $3000 over a 45% chance of winning $6000.
In my personal case I would for sure prefer the 3K since I have sometimes such a luck that I will fall in the 20% and get out with my empty hands.
There are many different theories among experimentalist’s about this. The portfolio theory is based on the premise that choices among risks reflect a compromise between maximizing expected value and achieving an individually determined ideal level of risk.
In the utility theory, subjects are assumed to “compute” something similar to an expected value, but instead of using the objective cryptocurrency amounts, they operate on subjective amounts. One that used this concept wisely was Daniel Bernoulli who said that the value of money is not absolute, but depends on how much one has already:

Any increase in wealth, no matter how insignificant, will always result in an increase in utility which is inversely proportionate to the quantity of goods already possessed

Bernoulli (1967)

An alternative explanation for risk aversion can be found in the idea that decision makers pay differential attention to the best and worst outcomes in gambles.

A Two-Factor Theory for Risky Choice
Behavior has both inner and outer sources. We are disposed by our unique constitutions and histories to behave in certain ways, and each person has an unique approach when it comes to making a bet or investment. Two-factor theory uses both a dispositional factor and a situational factor to explain risky choice. The dispositional factor describes the underlying motives that dispose people to be generally oriented to achieving security (i.e., risk averse in conventional terminology) or to exploiting potential (i.e., risk seeking in conventional terminology). These factors are sometimes in conflict and sometimes in concert, producing complex patterns of behavior in which risk averse choices and risk seeking choices exist side by side in the same individual’s behavior [Lola Popes, see references at the end of this post]

How to get the most of MultiHodl bets

I wrote already about the MultiHodl bets in my last blog post. Multi HODL is an innovative tool to bet on price changes on Crypto assets invented by
My theory is many failed bets have something in common:
That we were not patient enough to wait until is in the winning side.

You may say, yeah! Right, but I was losing 20% of my bet… Sure I completely understand that and I also losed more than 20% on my own bets for that same reason.
Talking frankly there is two ways of getting out of a bad bet. Let’s say that you analyze the past days, have the bottom and top of the mountain tracked, and you think that it effectively is going up.
So you place a 300 € bet that is going UP, risk level X8, so there is some place for failure (As more X risk level the margin call is reduced) Well it starts go in the direction you think, but after 3 minutes, it starts going down.

After studying the past this was the logical curse of the price. Slide the image below to see what happened

This is an example of a real bet. Is not a simulation. Because of the fear that the never ending going down red line for 2 hours and not getting out to cut out looses short, you end up getting out in the worst place of all!

60 € lost just because lost hope and fear that all will be lost

This fear is just not grounded! It’s just fabricated since after seeing this long red candles down after such a long time, you just loose all hope. This is not the way to do a right bet.
In case your prediction does not go as expected you have 2 options:

  1. Cut your losses short, so if the curve does not go as you expected, you cut loose at 5% max very closely to the start.
  2. Do not loose the hope, stay cold as a rock, and wait until the price goes up again and you can get out in the winning side.

But staying in the middle of this two is not a sane option and the way you can loose a lot of money.
Cut your looses short and keep your winnings at large!

To end up the story, I recovered that 60€ doing another 8 bets of about 9€ gain each. It can take many bets to recover from a very bad bet.
Another good option is to make a “seed bet” of minimum amount, like 60 €, with low risk and only after seeing your theory is like expected then you make the bigger bet. Remember that the starting point is the key for a good bet. The ideal kickoff is a MultiHodl UP bet in the base from the mountain after analyzing the past days lowest points.
But even like that things can get tricky so have an escape plan ready. If things drift from your prediction an unacceptable % you either cut your looses very short and assume the loss or you are patient and strong enough not to loose the hope and get out in the gain side. Believe me, most of the bets, could have gone right if the holding was long enough but instead I freaked out and got out in the bet in the worst moment.
But either 1 or 2 you don’t stay in the middle way. Because that’s the worst decision of all and you get out in the worst moment probably with a big loss.
Please note that this is only for the cases where you studied the margins and it’s not a crazy bet like going up at the top of the price or going down at the bottom of the mountain. This extreme cases do not count, if you do that I guess it was just a fail, and getting out as fast as you can is the rule!

Keep in mind that any money source that you use in this bets should be preferable Stablecoins and investment money that you can afford to loose!
I recommend to use Stablecoins or FIAT since loosing Crypto is always painful. The best is just use money and if you afford to win then you can buy more Crypto or just transfer it back to your local bank. Risky choices are choices that have an element of danger. They are risky and may come to a bad end in case the direction changes abruptly and you are not in control. Losses may be sustained, hopes may be shattered, or opportunities wasted. That said, keep your winnings at large, and cut your looses short!
Do not use a small screen like your mobile, half awaken, to place a bet after. Open TradingView or any similar stock market chart analyzer in a big screen and make a seasoned and thoughtful decision.

If you want to try YouHodler you can open an account here. Their app has great usability and feels secure, the withdrawals are fast, and their support answers within the hour. So far I had a very good impression of their Finance platform.
However I would never recommend to hold all your assets in one platform. We have half of our assets in YouHodler and the other half in another DeFi platform called BlockFi which also has very good recommendations.
BlockFi is launching very soon world’s first Bitcoin rewards Credit Card. This is great since enables you to use this card to get cash in any automatic terminal or also to buy things just like any other VISA card and earn 1.5% back in bitcoin on every purchase. We joined the waiting list.

The psychology of risk – Lola Popes ( PDF )
Definition of Multi HODL

Understanding how to make good decisions when betting on Crypo Multi HODL bets

Multi HODL is an innovative tool to bet on price changes on Crypto assets invented by . YouHodler is a Swiss based company that is innovating in the field of Crypto financials.
I enjoyed a lot using Multi HODL but I was not well informed when I started with it and I make a lot silly mistakes, hence I decided to write this blog post with my advice, to help potential users have a fresh start. Now let’s take a look at the chart below with the 2 main Crypto assets in 2020. The fact is that since Covid started, Crypto values sinked abruptly, and after that they grown with an unusual force until being on the maximum tops cornering the end of 2020. This is how an Ethereum vs. Bitcoin looks like in 2020.

ETH vs Bitcoin price in 2020 –

Looking at both charts, ETH on the top although the king on the price is Bitcoin, there is something obvious: The grow direction with some temporary drop prices it’s always going UP.
It’s good to follow Bitcoin and Ether, or the coin you follow, together. As Gold is the king of the metals value, so it’s Bitcoin in the Cryptocurrency world, so if you open BTC and ETH in two horizontal panels you will see they mostly correlate over time. Usually, but not always!
So it’s essential to follow both to have a clear tendency indicator.
Multi Hodl let’s you bet on price changes in both directions, Up or down changes:

Going UP is always better than down

This are my personal recommendations about using it to avoid falling in common mistakes.

You should only reserve for this kind of bets as small percentage of your assets while leaving the rest in YouHodler savings account so it generates a steady 4.5% year interest on Crypto and 12% in Stablecoins. And the best is to not play with your Crypto assets directly, but to bet with a Stablecoin, like EURs or USDT. That way you can have more control of the gains and looses without altering your precious holdings in Crypto.

Disclaimer: This are only my views and recommendations on how to bet on UP Multi HODL Bets, with the least risk as possible and without falling in very common traps. I’m not an financial expert and this are hints that I summed up after my own mistakes.

Be aware of momentum of the year and special days. For example if you are close to black friday, check how it was historically on that day. Avoid days where you don’t see market volume, avoid special dates like Black fridays and any other internet related thing since this Crypto is attached to the internet somehow. And this special days can be specially tricky!!!’
Do a search, research the field, before planting a seed. If you are not going to take the time to do this research it’s better not to bet.

This easy tips are only based in the last price movements from Ethereum which may be very different from those of other cryptocurrencies. ETH price was hectic in the last weeks and it’s recommended to bet only UP when you see a clear grow pattern.

1. For starters: Use only the UP button and a low Risk factor (X2 or X3).

Background: Even if you make a bad decision, you can always wait, and at some moment it will go up. The price per hour is calculated using the initial Bet and your Risk factor. If you use take a big risk is not optimal to wait long hours.

Checking last months on ETH or BTC it’s going up. It’s a no brainier!
Unless you know what you are doing and you know that there is a big price drop you may try the DOWN button. But it must be a fast action, and if you loose the timing, is very probable that it will never go down again. Avoid the DOWN button. Be wise, make only UP bets in crypto!

2. The starting point is essential! The best to start an UP bet will be at the lowest point possible on a trend that looks going upwards. Look macro movements, not mini like just 2 hours range!

Explore last 5 days, even last 2 weeks, and double check that your prediction matches. Starting your race in a good point gives you the leverage to wait in a comfortable position in case there is a temporary descending path.

3. Micro betting examples: To start playing with it and avoid big looses is a very good idea to try a micro-bet. Just use a low value like 0.06 ETH or from 30€ for example of a stable coin. Doing that you can also afford to have a bigger risk factor since the bet is small and in the worst case there is not much to loose. This way you can learn the first days/weeks till you get a feeling for it without loosing part of your assets.

4. Clearly identify grow direction: Check the Macro movements on last 5 days, last month. Usually it’s always UP but is important to detect that after days of continuous grow there is usually a DOWN cascade. So don’t trust the always UP game. The key to make a good Bet is to hold it from a low point, so you have leverage to stop the Multi HODL, at the beginning of that cascade and not at the end. Also is a good tip to see the top of the saw mountains, if the peaks go UP, it’s a GROW pattern . If they go DOWN is a DECREASING pattern. Sounds easy but it’s not always straight-forward to see. Below my analysis, finding lowest nightly point and start of my bet, 8% up prediction for next hours.

5. Don’t double bet at the beginning: It’s very tempting to make a second bet to cover the looses of the first one (Ex. I though was going, but is going down, let’s make an additional DOWN bet!). Although can be a good idea, unless you master points 1 to 4, this is not recommended, and as mentioned before DOWN bets are a bad idea that have to be done precisely.

What it may be a good idea, is to make a “seed Bet” of a minimal import For the lowest possible 0.06 ETH for to see your idea was good before making a bigger bet, then you can close them at different times knowing that with the small one there is a minimal risk. Both going UP!

6. Mind the GAP: From the starting point, let’s imagine the scenario where you start an UP Multi HODL bet of 0.7 Ether when ETH price is 590 u$. Mind the origination fee of 0.45% cost that you can see in Details plus the hourly fee, that can be high if you choose a high risk factor (X).

Example: 0.7 ETH Multi HODL bet at X7 factor taking in account the costs, will start generating something only above the 595 u$. So this first 0.5% UP is only to cover the costs. So make the appropriate markings in your favorite Stock Chart online viewer, in order to visualize this risk, and to get away at the proper time in case goes down abruptly. Using lower risk factors like X2/X3 makes the initial cost lower and has also the advantage that if you start in the wrong point, you can wait till the new upward Wave in order to avoid stopping the Bet on RED numbers. Theoretically, unless the exceptions when the starting point is not wisely chosen or the bad luck to start when a DOWN cascade is flowing, you should only quit an UP bet when it’s on the winning side and not before.

7. Mind the Growing vs. Decreasing speed: Usually it’s quite normal that the grow movements are like a chain Saw of short upward movements with down cascades every now and then. If the cascades are short and do not cut all the grow is great since it’s a clear signal that there is increasing GROW.
But it’s not uncommon that after a long upward Saw shape comes a BIG cascade DOWN. And that’s sometimes really fast down compared to the grow speed, be ready for it, and away from your danger top bottom line (Where you start loosing)

It’s very important not to freak out in this point and stop the Bet in the most down part of the cascade. This is a very common error that stopped many of my good bets. Get accostumed to this movements, make your margins visible drawing over the live stock Chart and HOLD it unless you see clear signs of a catastrophe!

8. Don’t overuse it and do not get addicted to it: Making one or two good Bets you can call this a day and just walk away happy till next day. The luck to be always in the growing side is not take for granted. Many times you may not see a DOWN cascade of death coming, and in one fail, loose the gains of many good guesses. Use this consciously, you are playing with real money here. And start slowly, making Micro bets as described in point 3, to get the feeling and timing for it. Keep in mind doing this is time consuming and may make you tired!!! Find the good moment to start it.
This is the key for a very good Bet!

9. Be aware of context on the Crypto you are making the bet. For example if you are betting on Ethereum, then follow the ETH developers and related channels. Starting this month they are launching ETH2 and I bet that had an effect on the super bullish unusual grow on the last few days.

10. If possible don’t use your Crypto on this! Your mission is to HOLD your Crypto and have an stable financial future. So playing with it’s a bad mix. Unless you are sitting on a stronghold of Ether or Bitcoin and you are wise enough to keep your balances right I strongly recommend to use any Stablecoin that you can afford to loose to do this kind of bets.
Do not forget: You are playing with real money when you start a Multi HODL, and even that it looks like always going up on a Macro zoomed out view, the reality is that is not always a constant growth. And in a single day can be a 10% drop on the price, if you are there on one of this UP bets, you will loose at least 1/3 of what you bet if you don’t get out in the right time.
So I will say it again in case it was not clear:
Separate your betting risk money from your Crypto assets if you want to be in the safe side!

11. Last but not least, do not play with Bottom margins. Let it breathe!
It’s very human to think: I will just control my risk setting a very low margin so I can sleep in peace!
There is two problems with this approach:
1. As described in point 6 there is a gap from the Bet start till you start winning so setting a very short down limit can let you out with the worst scenario. I will describe this with an image after declaring my intentions. Also mind that the margin stop loss has a high cost!
In case of margin call or stop loss you will be charged a 2% service fee instead of origination and hourly fees. In the App/Website says 3.8% fee but is wrong (Already reported this)
This 2% is taken from the total amount depending on your risk factor so it’s much better to stop it by hand if you want to do so. This limit is just a safety ring to avoid loosing absolutely everything. But it’s not recommended to use it unless there is a good reason to do so and always tight to your starting point!!!
Failing to do so and having a bad starting point is a guaranteed way to loose the bet. To have a real scenario, let’s say the total borrowed money for the bet is 2000 u$, margin call with take 2% of that so you will end up paying 40 u$ just for the automatic margin call. Don’t do this.
If you don’t find time to be relaxed and follow your bet is better not to start it. This is the wisest advice I can give to you after gaining some experience.

2. Is very normal that you think is the best start point and it’s not. You cannot control the snake and cannot possible predict the future. So just let it breathe and at some point it will grow. And if it does not and hope is lost then at least wait enough time to get at the highest point and stop the bet manually.

Anatomy of a Bad bet and a very bad decision: To set a low margin call, see it was just about to wait longer!

This is fun but also risky and time consuming. And it’s also something that can be done in a wild, hectic coin like ETH, but also on more stable ones and doing it with more calm waters can be the key to success in this crazy oceans of 2020.
I highly recommend to do this confortably from a Desktop computer since the UX is much nicer defined and is more precise. I had two times problems when starting this from the iPad since the rist leverage is close to the UP button and withouth intention you can start with the Highest risk. The mobile App is good to stop the bet, but to be on the safe side, start it confortably from your laptop.

Managing risk

As mentioned before this takes risks of loosing real money. And it’s supposed to be done with assets you can afford to loose. If you don’t like risk at all then you don’t have to do it. You can just leave your Ether, Bitcoin, Litecoin or many other coins just there and use it as your wallet, generating 4.5% yearly interest.
Or 12 % in stable coins. I have some EURs assets that is 1 coin, 1 euro and this generates a nice passive income that you use as a end of the year savings or any time when you want to invest in buying more Crypto.
This is are only my personal views and I’m not a financial expert. I’m just a worker that is tired to be in the office 9 hours / 5 days a week and is looking for financial freedom.

Related articles

Keeping your Crypto assets to generate 4.5% (ETH, BTC) to 12% (stablecoin) yearly interest

Since 22 Dec, 2020 the Ethereum yearly interest rate was upgraded to 5.5% one percent more than before making YouHodler one of the platforms that generates more interest to hold ETH.

YouHodler latest update

As an addition to latest article “Financing a web-project with Ethereum” I wanted to show how to make your Crypto assets grow a small percentage per year and also to have some additional cash per month using Stablecoins.

Stablecoins are cryptocurrencies designed to minimize volatility, relative to some “stable” asset or basket of assets. For example there is EURS that is tied to the € price also 1 EURS = 1 €.
Another one is PAX Gold that is tied to the price of one ounce of Gold and generates 8.2% APR. Both Stablecoins are a subset of Ethereum network. With PAX Gold you can if you go to London, exchange your coins, for real gold. That’s what they claim at least since I would not fly there to prove it. More than that, the point I want to make here, is that in sites like YouHodler you can make 12% APR compounding interest per year when holding EURS.

Let’s say you have 10.000 € there for one year untouched.
At the end of the year you should have 11.200 € with a 12% interest.
If you want you could extract this 1200 € to your account and have some extra cash at the end of the year for further investments of a short holidays. That is a quite interesting method to generate a passive income over the years.
Below there is a talk about stablecoins that was recorded and had 464 registered participants from 58 different countries, on April 17 2020

Now the only risk I see is that this money is not on your domains. It’s hosted in a secure wallet in the domains of a company. So what I recommend, no matter what site you choose, is to check very well and read about who is behind the company and how secured are your assets in the event something happens with the company you choose.
I use to trust the banks a lot until one day at the middle of 2001 in my hometown, Buenos Aires, the economy crashed and the banks simply will not let you take your dollars out of your acccount. Or even worse, they where converted to argentinian money, something that at that moment was the equivalent to flush your cash into the toilet.
Ater that happened to me, got an offer to work in Spain and moved to the EU in 2004, and I always take care of where I put my assets and making an analysis of the risks. Of course we are in Europe and here the protection laws, would simply not allow a bank run like that to take place, still with that assumptions it is wise to check where you put your money.

Team of YouHodler

In case of YouHodler my analysis was good and as I mentioned in last post, the fact that they are a members of the BlockChain Association and the Financial Commission, and that they open profiles show an extensive and proved career in the Financial tech industry was enough for me. The fact that they have real offices in Malta but also in Switzerland is also a proof that they real and solid.

Disclaimer about 100% transparency: I’ve decided to sponsor YouHodler and will also make some videos and further analysis openly. The links starting with are affiliate links since I want to get additional cash in order to film the videos and use my time to share with my readers the road to financial freedom and to generate an additional income each year.
‘This links won’t work from Germany or from Spain due to country restrictions. But from those countries you can enter directly to
This does not mean that I blindly recommend this company. There are also others in the market like Nexo that offer a similar percentage (2% less on stablecoin). Feel free to explore and take your decision solely on your assumptions.

You can also earn crypto faster with Multi HODL but that is something that must be handled with care and deserves a new Blog post. For the moment I only recommend to keeping combined assets, like for example some Bitcoin and Ethereum, along with Stablecoins like EURS or PAX Gold in order to generate a passive income.
Do not try Multi HODL with the dream of making a fast buck. It’s very risky to use it, specially with the variations value of cryptocurrency, that is like trying to take control of a wild snake. This must be used with care and meditation.

Questions for my subscribers:
What do you think about this?
Would you trust an external company part of your assets provided they are trustable and generate a yearly passive income?

I bough some ETH back when it was 260 -> 280€ now it has gone up almost 100€ in two months. That was a lucky desicion. But is not always like this and it can be that due to market changes, external factors, or just the team Ethereum development roadmap that it simple goes down too.
This was a good analysis made by an user of TradingView months ago:

This second analysis was also quite accurate. 1 ETH is worth today 19 Nov. 2020 about 470 dollars (395 €).