2021 was good for cryptocurrencies. However, this year will be different due to changes in the macro-environment and the technology adoption cycle. Therefore, here are my bullish and bearish 3 cryptocurrency investment themes for 2022.
First, take a look at 2021. Loose fiscal/monetary conditions have brought liquidity to all risk assets. As a result, the total market capitalization of cryptocurrencies increased by 300% year on year. Cryptocurrencies have found actual use cases in DeFi and NFTs for the first time, contributing to the high growth of their valuations. DeFi's total TVL increased by 1600% year on year. Ethereum's NFT market cap alone has grown by 16,600% year-over-year. Layer 1 blockchains with proof-of-stake consensus algorithms and second-generation smart contracts provide significant infrastructure for these use cases, and valuations have risen. But as inflation rises, the Fed is forced to "do something," even though current inflation is mainly driven by supply bottlenecks rather than overheating demand. In 2022, the Fed's balance sheet will likely grow flat and try to raise interest rates. However, significant rate hikes are unlikely given the heavy public and private sector debt burdens, and inflation remains largely a supply issue. In any case, monetary conditions will almost certainly be tighter in 2022. As a result, inflation leads to lower purchasing power + withdrawal of monetary stimulus = worsening economic growth. As a result, macro analysts may be busy cutting growth forecasts by the end of the first quarter of the year. When it comes to encryption, the mass adoption of web 3 technologies is just beginning. The experience of the first two exponential technology waves, "Internet and Mobile Technology," shows that once the number of users of key technologies reaches 1 billion, mass-market applications begin to gain significant traction. By comparison, there are now only 180 million Ethereum addresses as a proxy for web 3 adoption, and at the current growth rate, it will take 5 years to reach 1 billion users. At this adoption stage, infrastructure and niche applications with high added value may stand out. And against the backdrop of these macro and tech cycles, these 3 crypto industries could be the winners in 2022. 1. Blockchain games The gamer group has a high degree of overlap with early crypto users in terms of demand. Players have a ready-made need to own in-game assets, which is a natural use case for NFTs and builds on the latter's success. In addition, a weak economy increases the attractiveness of players making money from games. On the supply side, Gen 2 L1s and L2s have cheap and fast deals, making the infrastructure more suitable for high-performance gaming. For this industry to explode, the catalysts we need are real players and high-quality blockchain games they want to play to make their token economy sustainable. Fortunately, the hype around cryptocurrencies has attracted a lot of game design talent into the field. As a result, some of their work will bear fruit in 2022. 2. Proof of Stake Layer 1/Layer 2 platform 2021 was the year of alt L1s. This is not a fad. Mass adoption of web 3 depends on scalable public blockchains. It is no coincidence that the 2nd generation L1s, which have seen massive growth in on-chain applications, have reaped most of the value in the current cryptocurrency boom. This trend will continue in 2022 as new L2s on Ethereum join the fray. From an investment risk/reward perspective, I would expect attractive alt L1s > attractive L2s > Ethereum L1. At the current stage, alt L1s allow better composition/liquidity in their ecosystem and start from a smaller base so that they may grow faster in ST. And Eth L2s can leverage the existing Eth user base and liquidity. However, L2s compete on more of the same metrics and are perhaps harder to beat the competition than alt L1s. If successful, Eth L2 will be where more new added value is generated than Eth L1. 3. Cross-chain solutions When Bitcoin and Ethereum make up the entire blockchain world, there is little need for cross-chain asset transfers/interoperability. However, this reality is changing rapidly. With multiple alt L1s and eth L2s thriving, coupled with new chains created by Web 2 businesses, transportation between crypto "countries" and "cities" becomes the next infrastructure challenge. This industry is destined to grow. But there are no established/dominant players yet, and it's uncertain where the value-add will come from. Prospective projects can be followed before the project, such as Quant and LayerZero. By comparison, here are 3 industries that are likely to underperform this year: 1. DeFi But so far, DeFi’s moat has proven challenging to justify a single application, with a few exceptions. Therefore, the underlying L1 protocol is the biggest beneficiary of DeFi growth, not the DeFi application itself. Second, progress in bringing off-chain collateral to on-chain remains slow, a significant bottleneck for the industry’s medium-term growth. Third, tight monetary conditions can be particularly damaging to DeFi projects, which are semi-financial Ponzi schemes that do not emphasize the use cases of the tokens because part of their token valuation comes from a discount on future revenue from the protocol's assets. Tascha previously said that a crypto-native "reserve currency" needs to find economic use cases for its tokens. The value controlled by the protocol is good, but without continued demand for the token from economic activity, it will be on thin ice when winter comes. Currency without economic backing is fictitious. 2. Creator/Community Tokens like Web3 Amazon, Uber, etc. Creator tokens are getting a lot of hype in early 2021. I'm sure they'll break out eventually, but we're a few years too early now. Other projects trying to create a Web3 two-way marketplace, such as Amazon and Uber, fall into the same category. As mentioned above, mass-market applications gain significant traction when key technologies reach 1 billion users. Unfortunately, cryptocurrency adoption is far from enough to support thousands of individual creators issuing their mini-currency. Also, in most cases, the utility of these creator tokens is not strong enough, which means that the market is still being found. Therefore, in ST, games, NFTs, and DeFi will remain the use cases that carry users’ cryptographic payloads. 3. Meme coin Like GameStop, these tokens disproportionately benefit from economic stimulus/monetary easing. Doge (DOGE) and Shiba (SHIB) may have to drop in the market cap rankings as these forces reverse, and inflation reduces the discretionary cash spending of small retail investors. The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks.
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Cryptocurrencies are "encrypted" in nature. If you follow Warren Buffett's advice to never invest in businesses you don't understand, investing in a currency of numbers rather than gold can be hard to justify.
But it's also hard to ignore the stunning performance of some cryptocurrencies: the price of a single bitcoin jumped from less than $5,000 in March 2020 to over $40,000 in April this year. Many people view cryptocurrencies as a mixture of excitement and fear. This feeling is beneficial because being cautious won't make you lose money. Of course, for the cautiously curious investor, here are some ways to gain exposure without buying cryptocurrencies and how to reduce your risk if you decide to. Invest in companies that hold cryptocurrencies Think of this strategy as a cryptocurrency investment in disguise. For example, some public companies hold cryptocurrency because they are betting that it will succeed, and you can use these companies as a buffer. When you're considering investing in a company because it has exposure to cryptocurrencies, your direct or indirect investments are very flexible, depending on how much of its balance sheet is in cryptocurrencies. Examining the company's balance sheet reveals that Tesla holds $1.31 billion in digital assets as of June 2021. While the tech giant has received much media attention for its investments, the $1.31 billion currently represents only about 2.4% of Tesla's total assets. However, if the value of these assets inflates, as sometimes happens with cryptocurrencies, so does the value of Tesla's stock. Invest in cryptocurrency infrastructure Another way to gain exposure to cryptocurrencies is through buying and selling on cryptocurrency exchanges. In addition, you can invest in cryptocurrencies just like investing in gold, by investing in the commodity itself or purchasing related professional equipment, for example, through miners to obtain cryptocurrency. ZEUS MINING is one of the few companies that focuses on the global crypto mining trade and miner business. We are committed to providing miners with efficient and accurate maintenance tools, miner troubleshooting, and miner and accessories sales. In addition, it has provided miner supporting services for 80+ countries and 30,000+ international friends, helping more people obtain cryptocurrency. Invest in cryptocurrency ETFs So far, the United States has approved a cryptocurrency exchange-traded fund (ETF). It is understood that the launch of this bitcoin ETF (ticker: BITO) does not directly invest in bitcoin. Instead, it is based on cryptocurrency-related futures contracts. Because it is an ETF, investors can invest directly from their brokerage accounts without opening a crypto wallet. Be careful with direct investment If you are willing to invest directly in cryptocurrencies, there are several ways to reduce risk. One way is to reduce the amount of your investment. Some credit cards offer cryptocurrency rewards similar to cashback or miles. You don't even have to invest your money if you decide to add cryptocurrencies to your portfolio through incentives. Another way to reduce risk is to invest in stable coins, similar to traditional cryptocurrencies but backed by real-world assets, making them less prone to large devaluations. The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks. 2021 has been a record year for crypto VC funding, driven by the broader environment; an increase in VCs means more inflows of crypto money.
Venture capital funding analysis shows that crypto startups received $25.2 billion in 2021, up from $3.1 billion in 2020, a 713% increase; with solid growth across all segments of the crypto industry, the risk to NFT company's Investment surged to $4.8 billion from $37 million in 2020. Overall, blockchain venture capital's share of the global venture capital market has continued to grow from 1% to 4%. 2022 will be an even more challenging year for crypto VCs. The global fund environment is bleak, but risk-averse capital will continue to flow into the growing crypto industry for years to come. As a retail investor, knowing the key players in the crypto VC market can differentiate between profitable and unprofitable investments. How do crypto VC funds work? Crypto VC funding has some things in common with general VC funding, but there are also differences. Generally speaking, venture capital describes a group of investors looking to increase their investment by investing in companies early. Before investing in a company, they review different projects by evaluating their growth potential and a potential positive return on investment. In addition, venture capital funds diversify their investments to minimize downside risk and potential volatility. Standard venture capital funding occurs in five stages: Pre-seed: The project is in a very early stage (often just an idea), and the investment comes from family and friends. Seed round: The product is tested for its viability, including market potential analysis, competitor analysis, and minimum viable product development. At this stage, investors are actively sought by promoting the platform, cash flow, roadmap, and other materials. Round A: The product is validated, developed, and supported by a strong community. Investments at this stage are less risky for investors but more costly and focus on marketing and advertising. Round B: The product has a large and expanding user base, with investments focused on marketing, sales, human resources, business development, and customer service. Round C: Focus on product line diversification and entry into international markets; the product is commercially viable. However, crypto VC funding is very different, as many projects never get past the first two stages. While there are some examples of Series A and Series B rounds, only a few companies have reached the maturity of FTX, raising $32 billion in Series C rounds. The crypto industry is still relatively nascent, and most projects are unproven business models. However, several other factors make crypto VC funding different, so even large companies with substantial market caps won’t necessarily open additional funding rounds. For example, most cryptocurrency projects raise funds through tokens rather than equity. While tokens mean equity in a project, raising funds through an ICO or IDO rather than selling shares means investors take on a different type of risk. Buying tokens through ICOs allows investors to cash out their stakes earlier and more efficiently, but the products are often less robust and credible than their stock-selling counterparts. Additionally, crypto projects require a different type of marketing, as platforms like Google and Facebook limit the scope of "traditional" digital marketing for cryptocurrencies. This has resulted in cryptocurrencies relying heavily on influencer marketing and guerrilla marketing methods, limiting the scope for feasibility testing of products before launch. All in all, crypto VC funding is faster but is more based on trial and error and involves far less regulation. In addition, venture capital funds can support projects through influencer marketing, leveraging their relationships in the industry. This can improve the project's legitimacy (if the established VC supports it). However, it could also backfire as crypto VC funds face headwinds in bringing in traditional financial instruments that run counter to the decentralization ethos of the crypto industry. The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks. The 2020 Covid-19 epidemic ravaged the world, forcing global asset prices to soar, and Bitcoin prices jumped up after the March 2020 slump and continued to rise. In June and July of the same year, a survey commissioned by Grayscale Corporation of the United States showed that the penetration rate of Bitcoin in the United States was hitting the critical 10% mark. At the beginning of February last year, the estimated number of Bitcoin users was similar to the number of Internet users at the beginning of 1997. The user growth rate was faster. It is too risky to invest your entire wealth in cryptocurrencies as an ordinary investor. However, young people who have just started working can try it. Therefore, the author draws a global investment trend chart based on a certain proportion of the S&P 500 Index, the CSI 300 Index, and Bitcoin. In the figure, before July 2010, it was the global major index complex, and after that, it was the trend of SP500+HS300+BTC (in a particular proportion). Since March 2009, the global investment trend has unfolded a cycle of wave V, (I) the last stage of wave V speculated on auto stocks, (III) the last stage of wave III speculated on Internet stocks, and (III) the last stage of wave V speculated on cryptocurrencies, very reasonable. And consistent with the facts. This is the only way to count waves, in the author's opinion. Among them, the V wave (1) rose from the low in March 2009 to the beginning of 2018. Bitcoin peaked at the end of 2017, and other cryptocurrencies peaked in early 2018. Then, it is not accidental, followed by V wave (2), an irregular platform, in which it fell to the end of 2018 as (2) wave a, rose to February 2020 as (2) wave b at the end of 2018, and then fell sharply to March as (2) wave c. Finally, the March 2020 low developed a V wave (3). Subdivide the V wave (3). There are two significant possibilities for the current trend: First, conservatively, the low point in March 2020 rose to early September as (3) wave 1, and it fell to the end of October as (3) wave 2 in early September 2020 and rose to February 22 last year at the end of October 2020. So it is (3) wave 3 and then enters (3) wave 4. So the adjustment has been made until now, and the pattern is an irregular platform. Second, looking very optimistically, the low point in March 2020 rose to April 16 last year as a group of 5 waves rising, divided into (3) wave 1 and then entering (3) wave 2. When the adjustment is over, it will enter (3) Wave 3 rises. Since (3) wave 1 is 1.1 times, the rise of (3) wave 3 will not be lower than this value, and the market outlook will be quite exaggerated. Netscape was just a Silicon Valley start-up at its IPO, and its IPO in 1995 left fund managers scratching their heads: about how to value the company. Now Wall Street is asking the same question. Coinbase, the largest cryptocurrency exchange in the United States, had revenue of about $1.8 billion in the first quarter of last year and a profit of at least $730 million. It's lucrative compared to incumbent brokers and exchanges' fees from trading stocks. Kraken's shares are valued between $10 billion and $15 billion at the most recently traded price.
With the rise of the crypto wave, there has been a steady stream of new investors. Non-Bitcoin cryptocurrencies have been strong since 2020, with Ethereum in second place by total market capitalization. Ethereum has built on its 4.6x rise in 2020 and is currently up to 4.2x if you calculate the most significant increase since the lowest point in March 2020, $87 to $4371, an increase of 49 times! At the lowest point on March 13, 2020, the total value of the entire cryptocurrency market was $108.1 billion, and it is currently as high as $225.71 trillion, an increase of 20 times. The most significant increase in the cryptocurrency is SHIBA INU, 550,000 times. The lowest price is lower than US$0.0000000001, and there are 9 zeros after the decimal point; that is, the market value of 10 billion pieces is less than US$1, but the recent highest price is US$0.000039, and the market value of 10 billion pieces has reached US$390,000. Shiba Inu Coin was listed on the Binance Exchange, and the increase more than doubled within 10 minutes, causing Binance to "crash," which is extremely crazy! Liang Xinjun, CEO of Fosun Group, gave a speech titled "The Future Has Come - Twenty Years of the Blockchain and Data Economy." According to the current trend, it is inevitable that people will join the cryptocurrency market one after another, and it is only a matter of time. As an investor, the penetration rate of cryptocurrency has increased from 10% to nearly 50%. How much can you gain in this golden period of investment! The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks. How do we allocate our funds in such a "dangerous" crypto market? Here, I will introduce some commonly used investment principles and listen to the editor tell you.
1. 28 principle The 28 principle can be interpreted as 80% of the income comes from 20% of the investment, so how to concentrate on choosing the 20% of the investment determines how much income we can generate in the future. The 28 principle applies to general laws, whether to calculate the overall capital to decide the investment plan or choose which token to buy and how much to buy. Even the profit ratio of a token can be considered and decided using the 28 principle. Besides the most basic rule of 28, what other configuration methods can we follow in the crypto market? Here, 3 sets of investment allocation ratios are formulated for everyone, and the reasons for such allocation are explained in detail for your reference. The first is the division of investment types, which can be divided into three major types, stable investment, venture capital, and fighting investment. Steady investment refers to the investment with an annualized rate of return between 1-5% and no risk of impairment of the principal, such as demand deposits, dead deposits, bonds, money funds, etc. Venture capital refers to investments with an annualized rate of return between 5% and 20%, and the principal may have a particular risk of impairment, such as financial derivatives such as stocks, funds, loans, futures, and trusts. Fighting investments refer to investments with an annualized rate of more than 50% or higher, and the principal may return to zero at any time, such as certain types of tokens or contracts in the crypto market. 2. 541 principle This choice is suitable for middle-aged people with stable families, older age, and who do not want to miss the crypto market trend. The 541 principle is 50% stable, 40% risky, and 10% fighting. The advantage of doing this is, first of all, stability. 50% of the stability is mainly based on fixed-income and capital-guaranteed investments. After all, people who have a family and business can't mess around. The proportion of the risk of 40% is not low; income above the inflation rate guarantees that assets will not shrink. The remaining 10% of the fighting capital is invested in the crypto market. For example: Assuming that the total amount of funds is 30w, take out 15w to buy fixed income wealth management, 12w to buy stocks or funds (more inclined to funds), and 3w to invest in the crypto market. If you are fortunate enough to make money in the crypto market, you can put forward some profits to supplement the stable or risky investment or hold cash. Then, after accumulating to a certain extent, according to the ratio of 541, increase the investment in the crypto market. Don't be impatient. 3. 3331 principle The moderate 3331 is suitable for young people busy with work and who do not have much time to focus on the crypto market. 30% steady, 30% risky, 30% fighting, and 10% cash. This ratio's stable and risky types will not be repeated, mainly talking about 30% fighting and 10% cash. More proportions are allocated for fighting because the total amount of funds may not be too much. At the same time, there are many projects such as public chains in the encryption market, layer2, DeFi, GameFi, NFT, and DAO. The high proportion allocated to fighting means that you can try multiple directions. If you don't have much energy to keep an eye on the market, it is recommended to focus on investments such as public chains, layer2, and DeFi. For example: Assuming that the total amount of funds is 10w, take out 3w to buy fixed income wealth management, 3w to buy stocks or funds, 3w to invest in the crypto market, and 1w to keep cash for backup. There are 3 tracks to choose from in the crypto market. Due to the vast fluctuations in the encryption market, if you lose tens of millions of dollars, keep your cash, don't rush to recharge, think more about restocking, and then choose projects carefully to invest in. 4. 235 principle Radical 235 is suitable for young people who do not need to work overtime often, have energy, and study hard. That is 20% stable, 30% risky, and 50% fighting. The main point of this classification is how to play 50% of the funds in your hand to fight, so it is only recommended for people in the half-time or full-time crypto market to invest according to this ratio. Since the hotspots in the encryption market are rapidly changing and the technology development is still very early, investing a lot of time in research will have an advantage over not spending any time. For example: Suppose the total amount of funds is 1w, 2k is saved, 3k is bought in funds, and 5k is used to invest in the crypto market. He spent a lot of time researching low-cost ways to make money, using 4k to invest in BTC, ETH, or NFT and 1k to learn how to make contracts. The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks. What is it that keeps us from seeing the light of encryption? Today, I have summarized the following ten reasons for everyone; maybe you are also blocked by them.
1. The complexity of encryption technology Encryption is one of the most information-intensive and hard-to-understand areas I've ever been exposed to. It's an entirely new field, and there isn't even a systematic vocabulary to fully describe encryption. Likewise, decentralization is also a new concept, not to mention the new words such as proof-of-work PoW, proof-of-stake PoS, and mining. Usually, I describe this complexity in two ways. First, I'll let you compare dice games. While the dice game is complex, it's not an unattainable science since the players at the table can figure it out, and the same is true of encryption. Second, I would tell people that understanding cryptography is not easy, but the rewards are enormous. 2. Everyone has the mentality of being tired of studying or working To understand encryption technology, you need to read a lot about it. Many of you don't understand; you have to learn word by word. According to my statistics, this initial understanding process takes at least about 20 hours, and I have seen some people spend nearly 200 hours. All in all, it's an exhausting learning process that many people are reluctant to engage in. 3. Those who are too successful cannot see the light In fact, before seeing the light of encryption, the world we see is only a few. My feelings are typical of Gestalt psychology. When an incomplete figure appears in human vision, human visual thinking will tend to automatically complete it to make it a complete typical overall figure. To see the light of encryption, you have to open your mind to new things. You need to look left and right simultaneously, even if looking straight ahead is more accessible. The more successful a person is, the less easy it is to change the way he sees the world and the less interested he is in watching. So, success will make it harder for you to see the light of encryption. 4. Belief that only national governments can issue currency It's trying to get people to trust the Bitcoin algorithm more than they trust their government, but there's no denying that digital currencies are becoming more and more accepted as a form of payment. 5. Most people don't care at all The most common reason many people don't see the light of encryption is that they have no interest. A poll conducted by Blockchain Capital late last year found that the number one reason most Americans don't own cryptocurrency is lack of need or interest. 6. No curiosity The rapid development of cryptocurrencies is a fact that cannot be ignored. In terms of market value growth, Bitcoin's market value growth is the fastest in history. The only reason you're indifferent about it is that you're not a curious person. 7. Cryptocurrencies are too volatile/risky Everyone says cryptocurrencies are too volatile or risky, but it was the same when junk bonds first started trading. Except for Drexel Burnham Bank, the inventor of junk bonds, all other banks said that junk bonds were "junk" because they were extremely unstable and risky, and they would never touch them. But the volatility of cryptocurrencies has diminished over time and continues to stabilize, a problem often faced by new asset classes. 8. Consider it a scam When it comes to cryptocurrencies, the first association of many people is still the Silk Road of the black market of online transactions. The cynical attitude of many successful business people towards cryptocurrencies is also a contributing factor. Buffett also called Bitcoin rat poison not long ago. What Buffett’s followers don’t realize, though, is that he never fails to say anything convincing about cryptocurrencies. 9. Too old An 82-year-old Home Depot financial expert, Ken Langone, once said: I only invest in what I know. Many things can be learned again at my age, but now I am old and has no interest in learning new things. 10. The light of encryption is not bright enough In fact, even curious and diligent people doing research cannot easily see the light of encryption because the light is not bright enough. Many people have never interacted with the blockchain, and most have never even seen anyone using cryptocurrencies as money. We believe that by spreading knowledge, discarding prejudice, and constantly innovating, the light of encryption will shine like the sun in the sky for all to see and make the world a better place. The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks. There are about 18,500 cryptocurrencies listed on CoinMarketCap and nearly 10,000 on the Bitpush Index, yet only the top 750 cryptocurrencies have a market cap of more than $25 million. If you put $1,000 into a $10 million token and wait for its market cap to become $1 billion, the investor gets $100,000. It is possible to get more if the value is lower when buying the token. However, will this happen, and is it worth taking a gamble for investors? Buying a low market cap coin is tempting to many who see it as an opportunity to make a fantastic fortune with a relatively small initial investment. Also, with the fast-moving crypto market, this fortune could come in a few months, unlike the traditional stock market, which can take years. Therefore, many investors want to buy a coin at a meager price and get rich overnight. Unfortunately, however, this is often difficult to achieve. 99.5% of tokens outside the top 250 will never make it to the top 100, alone worth more than $1 billion. Several factors contributed to this. First, there is not enough room for a decent project to make the top 100 due to the sheer number of solid projects in the cryptocurrency space. Only the most promising, innovative, and exciting projects can reach this goal and capture the attention of investors. Any questionable use case, lousy development, or project with negatives is unlikely to last long. Also, given how easy it is to do a project and get it listed on CoinMarketCap, thousands of bad projects were created either as jokes, scams or just as developer exercises. Anyone can create their cryptocurrency or token in 30 minutes by following the online guide, even if they don't have any development experience. Their developers have completely abandoned many cryptocurrencies and are almost impossible to resurrect. Of the projects that still exist, the vast majority are cheap replicas of DOGE and other Meme coins that try to market and capitalize on people's desire to find the next prominent cryptocurrency. Do you still have a chance to find your next big project? Unfortunately, this is unlikely, even if you do enough research and find a project with a compelling use case, strong developers, and a solid marketing team. Since the end of the ICO boom in 2017, projects have become less focused on the fair launch and distribution of tokens to the public. Instead, just like in traditional finance, projects flow to venture capital firms and angel investors and distribute many tokens to them. This ensures that projects are adequately funded and that all appropriate regulations are followed. Recent projects following this pattern include Solana, Avalanche, and Polkadot. Venture capital also provides these projects with a team of top-notch advisors and connections, which helps them get listed on well-known exchanges like Coinbase, Binance, and FTX. This further continued the cycle in which these tokens became famous and popular, leading to higher prices and market caps. The vast majority of people who buy coins with low market caps lose money. Even if a project goes up in the short term, small tokens lack liquidity and volume. Also, people who buy low market cap tokens may not want to sell until they see incredibly high returns, which could mean they end up 1000% or choose not to sell and then see the token drop 95% in value and lose money. One of the best strategies for investors with a high-risk tolerance is to find projects that have recently completed several VC funding rounds and buy the token after doing enough research to ensure it is a good use case. As exciting as it can be to invest in low market cap coins, it is a poor choice. It's more akin to gambling, and good research will only increase your odds of success but won't change the fact that it's perilous and can lead to losing money. The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks. Investing in any financial asset can be tricky, but this is especially true for the fast-paced cryptocurrency market, with its unique pitfalls and challenges.
As the saying goes, when you study and specialize for 10,000 hours in a field, you become an expert in that field. In the age of cryptocurrencies, this is measured in market cycles, where every trader goes through a rollercoaster of volatility several times as a crash course in market navigation. Every trader should learn five essential rules when investing in the cryptocurrency bull market. Rule #1: No one goes broke by profiting Since the early days of cryptocurrency, the price volatility of BTC and the volatility of other tokens have turned BTC into the crypto aristocrat it is today. Few of the “Not Your Keys, Not Your Cryptocurrency” movement are brought up anymore, partly because liquidity and velocity of money are essential factors in a healthy functioning market, but also because it’s simple as markets rise and fall hoarding has caused wealth to fade away with the onset of a bear market. When a cryptocurrency makes significant gains, especially if the price is in a near-vertical parabolic trend on its trading chart, the best thing to do is to take profits and allocate those funds to stable coins or other assets whose trading cycles are not exhausted. Nothing goes up forever, and in the cryptocurrency market, the downside is often as fast and hard as the upside. If tokens are difficult to sell due to personal attachment and bullish long-term outlook, it helps to consider after the parabolic move and consolidation phase; once the dust settles, it is possible to get more tokens with cashed out funds. Rule #2: Don't FOMO - there is always another alternative coin Almost every cryptocurrency investor is urged to buy a particular coin, only to see it take off like a rocket the next day, then make a two-week moonshot and see its price increase tenfold. At this point, the FOMO fear of missing out came into play and became so powerful that a large market order was placed and filled at the top of the market. The result is usually some unexpected pullback, with newly opened positions losing half their value in just a few hours as early holders follow rule #1 and take profits. A quick survey of past bull markets shows a lot of token pumping and selling in both bull and bear markets, proving that in a fast-paced hype cycle, there is no shortage of opportunities to get involved in high-flying projects early and earn substantial returns, thus making the cryptocurrency market famous all over the world. Rule #3: It won't be like last time Technical analysts often like to assert that encryption follows a predictable series of cycles that they use to validate some of their craftsmanship. This view allows them to apply past market cycles to current price charts to predict what will happen next. In 2021, this belief had led to Bitcoin's price reaching $100,000 and beyond for a year long, only to top out below $69,000 and limp before the end of the year with no sign of much anticipation of the breakthrough top. During the year, the market rallied with the bull market in 2017, then the rally in 2013, and finally a combination of the two rallies. Because it is difficult for chartists to explain the cycle the market is in and where it will go. Ultimately, the 2021 rally saw a unique double top unlike any previous market cycle and could extend into 2022, in line with some predictions that the four-year cycle is extending. The main takeaway is not to expect the market to behave the way it used to, but to focus on trading the market you have. Follow the price trend and keep Rule #1 and Rule #2 in mind. Rule #4: Play trend cycles with caution There is always an industry that pops into the headlines and generates 100x gains in every cryptocurrency bull cycle. 2021 has seen the rise of meme coins and the arrival of NFTs, much to the chagrin of Bitcoin extremists and those who are “working for the technology.” When a new trend like this starts to emerge in the cryptocurrency market, it is wise to keep in mind the power of the cryptocurrency hype cycle and, when possible, get exposure to some untapped coins. Strictly speaking, this is primarily short-term behavior and is often the case when rule #1 is fully applied, as the vast majority of new entrants to the altcoin market explode in their first year. Rule #5: Don’t spend too much time in the crypto market This rule is designed to help people maintain a balanced healthy life and a good state of mind. Life is much more than cryptocurrencies or other markets; there are wider poems and distances. Just as all portfolios should be diversified, so should your day-to-day experiences in the wider world. The vast majority of significant moves in the crypto space have occurred within days or weeks, and the rest of the year has been filled with sideways markets and range-bound trading. Do a lot of research, make choices, follow rule #1, and put some of those profits into other areas of your life to have more fun and enrich your experience for better enjoyment of your most precious commodity: time. The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks. Playing Texas Hold'em will give you an extra edge in cryptocurrencies, and you don't have to play thousands of hands to get paid.
Here are 17 of the most important lessons 1. Whales have an edge Texas Hold'em: At the poker table, whoever has more chips can win more. Cryptocurrency: Whales can bully you without you realizing it: · Whales can get deals early · They have easier access to inside information · They can drive the market for small-cap coins This is not an equal game. You may have seen this for yourself a few weeks ago: whales are playing the game and causing a chain reaction of liquidations. All the whale wants is money, and everyone else gets fooled by it, even those who aren't using leverage. 2. Have ulterior motives Texas Hold'em: You'll hear a lot of advice at the Texas Hold'em table, but are they looking out for your interests? Cryptocurrency: We need to be careful about advice from others. What are their motives? "This is a hundredfold coin." In fact, their purpose is to get you to take over. 3. PVP (player vs. player) mentality Texas Hold'em: Texas Hold'em is a player-to-player game, which means someone has to lose for you to win. Cryptocurrency: You underestimate the PVP level of cryptocurrency; it is not everyone who makes money. You hear about a deal, and the early players have already started selling, and you're left in the car. 4. Don't play too many hands Texas Hold'em: New players will be addicted to the action, and pros know it's best to wait for a reasonable opportunity to deliver the fatal blow. Cryptocurrency: It is best to wait patiently for an excellent project to reinvest. FOMO emotions can make you lose money. You are investing, not playing video games, and losing is not a simple matter of starting over. 5. Steady investment Texas Hold'em: You'll see professional Texas Hold'em poker players bluffing (BLUFF) and winning with a bad hand to get everyone's attention and attention on TV. Cryptocurrency: Are you new? So, in the beginning, you have to stick to solid projects and stop chasing high APRs; there is no free lunch in this game. 6. Results Bias Texas Hold'em: You can play your cards perfectly and still probably lose, which doesn't mean you should change how you play. Cryptocurrency: Just because no one has a 10x shib by luck doesn't mean you have to copy their investing style. Skill trumps luck in the long run. 7. Table selection Texas Hold'em: Would you instead play at a table with a drunk billionaire or a Texas Hold'em master? Find a table where you can beat your opponent. Cryptocurrency: Most people cannot win in cryptocurrencies. Not stupid, actually: most people are at a disadvantage because they have fewer savings combined with having a full-time job. Perhaps people's best bet is to keep it simple: buy blue chips on average at dollar cost and wait. 8. If you don't accumulate a few steps, you can't reach a thousand miles; if you don't accumulate a small stream, you can't make a river or sea Texas Hold'em: Some people are obsessed with "big hands" -- crazy all-ins, and it's easy to underestimate the potential to win small stacks. Cryptocurrency: Don't obsess over looking for 10x altcoins. Stablecoin mining and blue-chip coins tend to outperform shitcoin chasing people. 9. Become a tight offensive player Texas Hold'em: I am a patient player. I waited for a good hand, then I went into beast mode. I will maximize my win rate and minimize my losses. Cryptocurrency: I invest in far fewer projects than most people, but I go for it when I feel confident. 10. Take the long view Texas Hold'em: Sometimes profits go up and down. Don't be fooled by what happens every day; the long-term gains count. Cryptocurrency: Stop flipping through the portfolio in your wallet countless times a day. Doing so will only make you uncomfortable. 11. Bankroll management Texas Hold'em: No matter how well you play, there will be fluctuations and losses of money. How you manage your money is how you prevent yourself from going bankrupt. Cryptocurrency: No matter how good a project is, there will be black swan events such as rug pulls and loopholes, and money management should be done well. This includes funds other than cryptocurrencies; I am not all invested in cryptocurrencies. That means I'm as cool as a cucumber whenever the market goes down. 12. Pot size Texas Hold'em: You must allocate the appropriate funds for each lot. Cryptocurrency: Don't bet on a project with unknown risks. Pot size = Portfolio allocation. Best bet: The maximum bet for VCs is 5% of total funding. 13. When to cut losses Texas Hold'em: You have two aces in your hand, you flop a third card, but then there is a threat from your opponent's flush, and several people are all-in; you should cut your losses and fold. Cryptocurrency: This would have been a good project, but things have changed; choose to cut your losses and fight another day. 14. Fix your flaws Texas Hold'em: Weakness is a fundamental flaw in your game, and doing too much preflop can easily make you vulnerable to your opponents. Cryptocurrency: Find out why you failed the pattern: Are you constantly getting crushed while chasing a high annualized yield? This is a flaw. Are you constantly being deceived? That is also a flaw in you. 15. Learn math Texas Hold'em: Math will give you an edge, like calculating pot odds and expected value. Cryptocurrency: Learn the impact of impermanent losses, token economics, market cap, etc. 16. Deal with lousy play Texas Hold'em: This is when you start with a mathematically strong hand, but you lose. This happens occasionally, but don't let it go hand in hand. Cryptocurrency: A lousy play could be a bull-bear switch. You'll be pissed, but don't let it lead to a worse decision. 17. Find your strengths Texas Hold'em: Texas Hold'em is player-versus-player. You must find and hone your strengths. It could be getting better at math or learning how to read people better. Texas Hold'em is a game of skill where you can improve your skills. Cryptocurrency: Here are some skills you can work on. You want to gain an edge in DeFi. You can study Token Economics, Game Theory, Cryptography, Decision Making, Cognitive Bias, Macroeconomics, Trading Psychology, etc. This few lists you need to know: · Here, the first step to victory is to survive. · There is more psychology involved in cryptocurrency trading than you realize. · This is an unregulated field, and you underestimate the power of whales. · Understand mathematics. ·This may be PVP; please be careful if you are a novice. ·Anyone can have shit luck, but don't confuse it with skill. Remember, every time someone makes a penny, someone loses a penny. If someone makes $100w, you should think about what's going on behind the scenes. Some people make a lot of money by buying and holding cryptocurrencies, but does having a lot of money mean financial freedom? I'm afraid this is not necessarily true. You must know or have seen some people who have made a lot of money, but only a few years later, they have nothing or even a lot of debt. Why is that? Because the money that comes fast usually goes too fast. It is easy to make money too quickly and come too easily, it is easy to develop a mentality that does not regard money as money, and it is easy to be arrogant and self-righteous. It is easy to make a wrong investment or financial decisions and quickly go bankrupt and destitute. In the past ten years, Bitcoin has risen wildly. The 10-year increase is calculated by "ten thousand times." The financial freedom that the FIRE family talks about is hoped to be lasting, to last a lifetime, to have continuous and stable cash flow income to maintain a standard of living that they expect, not to become rich suddenly, or to have nothing suddenly. At present, I have seen several successful cases of financial freedom, all of which have deployed cryptocurrencies or NFTs, but they only do such asset allocation after financial freedom. Instead of making a fortune and gaining financial freedom by buying NFTs or cryptocurrencies. If your income is average but the hope of making a fortune on the avant-garde investment tools such as cryptocurrency and NFT; the probability of success is not high; it is better to work hard, get a raise, or change jobs with a high salary, start a side business, do By doing part-time jobs and increasing your savings rate as much as possible, you have a perfect chance of financial freedom in 5 to 10 years. Current common tools: It is recommended that you save the emergency reserve from the fixed deposit and then buy insurance, make a fixed investment in funds, consider investing in stocks with high dividends, buy real estate for self-occupation or investment and make some investment in innovative financial instruments (Bitcoin, Dogecoin, Ethereum and NFT, etc.). How to choose an investment tool? A tool is a tool; there is no so-called good or bad, only suitable or not. If you don't know the specific performance of the investment tool, it will be misconfigured. If it is small, it will cause a slight loss, and if it is large, it will cause irreparable financial losses. For example, to buy insurance is to use a small amount of money to protect yourself from unbearable risks. At this time, don't always think about "yield." Sometimes, we spend a little money to buy peace and security for ourselves. At times, we do not ask how much profit it brings us. Similarly, when investing in funds, don't always hope to make steady profits; you can only go up every day, not down. The net value of the fund fluctuates ups and downs. However, if the emergency reserve fund and the insurance plan have been prepared, there is no need to worry too much. Comparison of the six primary investment tools: Someone can indeed make a lot of money investing in cryptocurrencies, but his success is challenging to replicate.
The article's content is for reference only and does not constitute any investment and financial advice. It is hoped that users will carefully screen and prevent risks. |
AuthorMy name is Alisa, and I like to collect some information and news about crypto investment. I will share my gains on this blog. You are welcome to watch and comment. |