It’s important to know what you are jumping into before you purchase any cryptocurrency or digital asset. Just as any other walk of life, education is critical towards success. The WHY? of bitcoin and all of these other digital assets is something you should understand so you can have realistic expectations and understanding of what you’re getting yourself into. The markets move violently and I’ve seen first hand how this can affect people, both upwards and downward moves can create palpable anxiety if your mind isn’t right.
The way I approach the markets takes a long term view. I don’t trade unless it’s for a very specific reason and with a strategic amount. The digital economy is about to BOOM like nothing this world has ever seen before because of the utility these digital assets provide. Just like the internet has so drastically changed our lives over the past three decades, cryptocurrency and it’s derivatives will change our economies over the next three years. The tokens and projects I identify and seek exposure to are things that will be useful in some way once they’re finished with initial development and have products on market. This is a multi-year view I have, the price today is very nearly irrelevant unless I’m in the market to buy more of something.
When I look for currency to hold I’m wanting the projects taking best advantage of the network effect. Any form of money only has value based upon the community that uses it, so the cryptocurrency with the biggest user base, or future user base are the ones I look for. When I look for a coin or project to invest in I favor those that are getting and distributing income to coin holders. There are many options out there which are distributing passive income, meaning they have profitable business models already functioning. After that I search for coins that will be distributing earnings in the future once their business is up and running. The last category I look for is a project that will be disrupting legacy markets in a major way. These may not be producing income but can be thought of as a future utility.
Understanding a specific project is good, but just as important is understanding the broader market which that project operates in. Why are digital asset markets so volatile? If money is a tool, why was btc created? How are traditional asset and currency markets of all sorts used to manipulate national economies? Why do the most regulated banks get used for criminal money laundering more than cryptocurrency? These questions and more are touched upon in the following videos, although the subjects are very expansive and complex.