When every project has potential, none of them do.
It’s been a rather tumultuous week with all of the recent happenings as of late, but that’s really nothing new when it comes to crypto. Total market cap of all crypto currencies and assets went as low as 60 billion before having a great rebound, with many expert traders (such as yours truly!) finding prices extremely oversold and making nice profit off of the rebound.
But today’s article is less about trading and more about investing. I believe that the long term is the most important aspect to keep in mind when judging the value proposition of any kind of business, and we are circuitously acting as venture capitalists when we invest into these new blockchain based companies. As such, we should have a discerning eye and pay a lot of attention to detail when it comes to our investments. It’s our money after all! Hopefully by the time our money comes back to us after a period of investment it’s grown a lot bigger and stronger, as Mr. Wonderful always says.
So then, we want our money to increase in value, and you’re likely here because you have the opinion that this is possible with crypto investments. Great! Now let’s talk about some specifics.
The vast majority of crypto markets are fueled by rich whales (who we eventually want to become) or more small time investors (you and me!) who are scrambling to get as much of that sweet intangible currency as possible. Our demographic is largely male from around 18-30 years old. It’s a young man’s game, and it’s quite the risky one at that. Institutional investors who are older and with bigger balances aren’t as interested in the blockchain space (yet!) because it’s simply too small and volatile at the moment. However, this is what gives us the upper hand when it comes to investing. We can assume risk with our positions, more than “smart money” would usually be fine with. That also means that if our bets are right, that we will make it big time as we were “first to market” so to speak. No one was talking about Google or Amazon when they were new. Now? Completely different story. The ones who bought in early and held were the ones who became very wealthy later on.
Back to demographics though. We already know the age and gender group of our competition. We also know from a general point that no one in this space does any kind of due diligence or research into what exactly it is that they’re buying. I’ve seen even crypto experts who have been in the business for over 5 years outright mention that they have absolutely no idea what half of the things they buy in the cryptosphere actually do. With all of this dumb money being thrown at everything that has even the most miniscule of potential, prices are vastly over-exaggerated for many of these assets. If you want proof of that, simply search your favorite coin on Twitter or Bitcointalk and read what a lot of these so called “investors” do with their time. Most don’t even read the white papers and have no idea when the ICO they just bought will move into distribution. It’s a complete wild wild west right now, and it will only get bigger over time. Eventually, however, people will start wisening up and dumb money will quickly become no money at all, handing over their treasured wealth and crypto assets over to people who played the long term game, played it close to the vest, and kept a judicious eye.
And that’s the lesson of today’s article. Focus on the long term and focus on projects that actually have potential. Don’t pay attention to short term gambles, and if you do, realize that the music will eventually stop and you don’t want to be left without a chair to sit on.
Of course the next question you might be asking is “well this sounds great and all, so give me some picks!” Patience my friend. The next article will be a long one, going over my top 20 altcoin picks and my preferred methods of division and how to invest in them properly, as well as reasons why you should also be investing.