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Cryptocurrency is a realm of unprecedented equality, transparency, and opportunity. In this domain, every wallet is treated equally, and race, gender, and orientation are irrelevant. Cryptocurrency represents fertile ground, a fair competitive environment inviting everyone to play the game.
But it has a dark side too, for where there's money, there are opportunities and opportunists. Completely eradicating the latter may be impossible, but that doesn't mean cryptocurrency cannot become safer, fairer, and ultimately more profitable for everyone. To achieve this, industry players, from exchanges to KOLs, need to adopt more responsible practices in 2024.
Stop Committing to the Hype
The rise and fall of cryptocurrencies depend on hype. From YouTubers breathlessly announcing "the next 100x" to blockchain projects promising to "reshape Layer 1 landscapes," the hype machine never stops. This enthusiasm is infectious but also exhausting. Influencers focus not on fundamentals but urge users to jump from one token and chain to the next, trading frenetically, searching for gems that will make them rich.
In an industry built on money, this fixation on price is understandable. Infrastructure improvements, on the other hand, are hard to imagine, let alone sell; a DVT may be valuable, but it's unlikely to excite anyone beyond core Ethereum validators. That's why liquid tokens receive more attention than liquid token technologies, and meme coins attract more traffic than genuinely useful tokens.
How do we address this? Fundamental analysis must cease being a dirty word in cryptocurrency, and investors must have access to educational tools and guides to help them learn how to read project roadmaps, whitepapers, and marketing materials.
Fortunately, traditional valuation methods using usage ratios to value companies can be found in cryptocurrency. For example, the ratio of daily active users to market capitalization shows the "value" of each user on the blockchain. In some cases, the value per user is as high as hundreds of millions of dollars.
Armed with this information, people can question marketing narratives and pose a simple question: Does this project attract the users necessary for success? We've collected 20 such metrics in our crypto analytics toolkit, which is free and comes with a handy guide.
Don't Take Risks
It boils down to everyone taking personal responsibility for their digital assets, as that's what cryptocurrency is all about: self-sovereignty, self-regulation, and self-sufficiency. In practice, this means making better investment analyses, making personal decisions, and not becoming a victim of FOMO.
With these free tools, users can develop frameworks and "walk the talk," developing crucial experiential knowledge. By that, I mean nothing is harder in risk management than seeing a bad investment go to zero.
So, use the toolkit to make rational decisions, which means not blindly copying altcoins shielded by influential figures or trading setups shared by crypto OGs. For some, copying trades is effective; it can take you further in the cryptocurrency space, but learning through the power of reason will enhance your skills, help you build a robust portfolio, and make trading a small part of your net worth easier.
Slow and Steady Wins the Race
As Warren Buffett says, the stock market is a tool for transferring money from the impatient to the patient. The most reliable way to achieve financial goals is to participate in the game for as long as possible. You don't have to complete all transactions in one trade. You don't need to get rich overnight. Bitcoin isn't going anywhere. Cryptocurrency isn't going anywhere.
As long as you have skin in the game, you can keep playing. In 2024, the entire industry needs to adopt more responsible trading practices. Doing so will enhance reputations and build trust for those with influence, while for those just starting out, taking on less risk is key to portfolio growth.
Bitcoin whales have made money by researching a technology overlooked by most and then patiently holding for years. In cryptocurrency, there are times when acting swiftly to seize opportunities is necessary. But most of the time, you can make more money by observing, waiting, and allowing market forces to do their thing.
About the Author:
Haoyang is the Global Head of Derivatives and Financial Products at ByteDance. He is responsible for building one of the most sophisticated options platforms in the industry, designed to provide users with a seamless trading experience. Today, he leads a passionate team of builders dedicated to the latest trading technologies, from AI robots and structured products to enhanced unified trading accounts and new innovations in crypto-native derivatives. Haoyang is passionate about building a new, decentralized financial system. |
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Post time 22-2-2024 10:26:58