Essentials To Crypto Trading
A Sleepless Market
Unlike any other market, Crypto trades 24/7 and is an amazing market to trade due to its inherent volatility. The forex markets are open 24 hours a day but are closed over weekends, which unfortunately doesn’t help much. I remember when I first began trading Crypto, I was blown away by the fact that I could literally trade whenever I wanted.
Due to being tremendously busy throughout the day, being able to trade late at night was a perfect fit. This is where my love for trading Crypto was born. There are obviously also downsides to a market that never sleeps. The first is sleep deprivation… I kid you not. I was often up many a night, as late as 3 am.
I know a lot of Crypto enthusiasts eventually take up “trading” once they begin to see the percentage moves that are taking place. However, many soon return to investing and hodling over the long term. For many, the DCA approach is best, as it requires zero understanding of market dynamics.
It’s simply a case of allocating a predefined amount every week, month, or whatever the desired interval. Trading requires a lot of “study” and dedication. It can also be extremely challenging at times. Although trading is a lot more than a few principles, here are three key aspects to master if you are looking to trade.
Know Your Market
This is imperative, a keen understanding of your market and its inherent behaviors gives you an “insider’s edge”. This grows and deepens over time. This is primarily why I trade Crypto. I am now in my 8th year of Crypto, and so have managed to garner a lot of knowledge over the years. This helps tremendously, in regard to my trading, and ensures that I choose Crypto over any other market.
Having a relatively good understanding of the market you are trading also creates a level of confidence. There is nothing worse than entering a trade if confidence is lacking. Knowledge and understanding, in regard to “your market” makes a huge difference. Don’t underestimate how beneficial it can be to the efficiency of your trading.
Technical Analysis
TA is at the core of trading, no matter what anyone tells you. Those who refute technical analysis, generally, tend not to be traders. Pay a visit to any trader worth his salt and you will discover that his trading ideas are largely governed by TA. I rely heavily upon TA and charting when it comes to setting up a trade.
This is also an element of trading that is extremely vast. There is much to learn, and truthfully, one never stops learning and improving. It’s like anything, many years of practice will eventually result in skill and success. As the well-known quote from Malcolm Gladwell goes:
It takes ten thousand hours to truly master anything. Time spent leads to experience; experience leads to proficiency; and the more proficient you are the more valuable you’ll be.
Risk Management
This particular aspect of trading comes down to a few very important aspects. How a trader chooses to deploy capital is of significant importance, and is perhaps one of the most overlooked aspects of trading. Smart deployment of capital is able to turn an average trade into a roaring success. Another very important practice is correctly determining and making use of an effective stop-loss.
I recently addressed the use of stop-losses in greater detail via the following post: “A Tiny Trading Adjustment That Has Enormous Implications”. Another important aspect of risk management is to have a predefined exit strategy. Choosing not to close a winning trade based on greed can even see a winning trade becoming a losing trade. Having a predefined exit point eliminates the temptation of holding out for “more”. Strict disciplines and adherence to the data are imperative for success.
Final Thoughts
Making use of the abovementioned practices will lay a solid foundation upon which to build. Every trader develops their own set of rules. However, a good strategy will incorporate these three key aspects. All the best! Until next time!
Does Your Altcoin Portfolio Require Adjustment?
Laying The Foundation
Going back and studying the data of previous bull markets is a great way to gain some insight and understanding into the performance of particular altcoins. Obviously, newer altcoins don’t have this history to refer to. However, there are quite a number of coins that date back as far as the 2017 bull market, which helps to discern the health and future of these particular altcoins, and the projects they represent.
The most important aspect to identify is whether or not the altcoin in question experienced parabolic gains during the course of both consecutive bull markets. An altcoin that performed relatively well in 2017, but was unable to match that performance in 2021 is a bit of a concern. This is the very reason why I am quite bullish in regard to Cardano. Even though Cardano experienced significant gains in 2017, it went on to replicate this performance in 2021.
It’s not often that an already-established altcoin goes on to produce a 100X return. Cardano actually managed to outperform the abovementioned return and was one of the few altcoins to garner momentous attention during the course of the 2021 bull market. A project that was unable to reach its previous all-time high during the course of 2021 is immediately a red flag for me. Even a 2X or 3X appreciation in price is not too convincing, in my opinion.
Ideally, I would require some additional “selling points” and conviction in order to consider such a coin. If you are seeing such a modest appreciation in value and market cap, it would make a lot more sense to simply go with Bitcoin. At the end of the day, it’s not nearly as risky, and there is a much higher likelihood of appreciation. It’s rather foolish to take on additional risk if it is not accompanied by the possibility of a higher reward.
Simple Ratio
This is at the heart of altcoin investing. The potential reward must be relative to the risk profile. It’s pointless investing in a high-risk altcoin that might not even outperform Bitcoin. When this ratio no longer makes sense, chances are a shift has occurred. A shift from investing to gambling. That being said, sometimes a gamble pays off. However, minimal capital should be allocated to such “investments”.
Making use of a strategy that is similar to dollar-cost averaging is a much safer approach to altcoin investing. The only difference to this strategy is that further allocation is only executed once the price has moved considerably higher than your entry, or average price. In this way, you are protected from over-capitalizing on a losing investment. It’s very much a case of adding to your winners while cutting your losses.
Many investors keep buying the dip on altcoins that are consistently edging lower. It is important to note that certain projects will continually trade lower because they are dying. Unless the altcoin is a relatively established project with future potential, it is better to rather increase allocation once your initial investment is in the green. Ideally, buying the dips once the initial investment is safely in profit.
Final Thoughts
It’s important to remember that many altcoins are going to die, as well as become stagnant. Choosing to engage in solid practices of risk management is extremely important when dealing with altcoins, especially micro-caps. Make sure to exhaust the process of due diligence, as opposed to seeing your capital being exhausted by poor decisions.
It can be a difficult “game” to play. However, carefully thought-out decisions made under the oversight of effective risk management have a higher likelihood of success. Catch you next time!
Overcoming The Hurdles Of Crypto On-Ramps
A Growing Concern
As regulatory pressure continues to mount, it is becoming increasingly obvious that Crypto on-ramps are a concern to both the FED and regulators. Resistance is often a deterrent for many, so, make something difficult enough and activity is likely to decline. The ongoing “assault” is likely to cause new investors to consider taking a step back.
A “wait and see” approach is generally the course of action adopted by “uncertainty” and a “lack of clarity”. When you consider the underlying dynamics of many of these “events” it becomes blatantly obvious that regulators are unable to provide clarity, for the simple reason that they are themselves lost. They are still busy trying to push a square peg into a round hole.
Perhaps, someone needs to tell them that their defining criteria needs adjustment in order to facilitate and accommodate an entirely new asset class. Trying to apply the understanding of a 1980s Ford to a 2023 Tesla would be considered rather idiotic. It is no different with any form of technology or network. So, what’s the best solution for overcoming on-ramp stresses?
Elimination
It’s simple, don’t use them. This was something that I began communicating to my own Crypto oikos back in 2017 and 2018. I envisioned this becoming more of an issue as time passed. My suggestion was simple, create your own economy and infrastructure. Regular readers will be aware of my “create your own economy” approach. Essentially, it comes down to two key aspects.
- Complete allocation
- Create alternative and passive income within the Crypto ecosystem
The idea is to get most of your desired Crypto allocation into the ecosystem, ensuring no need for future on-ramps and other hurdles. Secondly, begin earning multiple forms of income within the Crypto ecosystem. By following these two simple approaches, independence is attained, at least to some extent.
Having a reasonable Crypto investment, together with a Crypto income provides a level of safety and ensures a form of escape from a collapsing and restrictive system. Whether you choose to amass that income or not is inconsequential. The investment can grow, or an additional income source is born.
Spending Crypto is a lot easier than it may sound. There are numerous ways and services that actually make the entire process relatively simple. Many exchanges and other Crypto companies offer Visa cards, which everyone is familiar with. Remember, when making use of a Visa card that is linked to a wallet, the wallet can be topped up as required.
There is no need to take on additional risk. These cards/wallets can even be recharged daily, in order to mitigate risk. Those who earn an income in the traditional sense are likely to find having a Crypto investment, as well as a form of income quite reassuring, especially during times of uncertainty. Successful execution of this idea makes the future use of on-ramps irrelevant and unnecessary.
Furthermore, many of these services also offer cash back in the form of Crypto. As lightning continues to experience increased adoption, so will the vendors who provide it as a form of payment. Paying directly from a non-custodial wallet is obviously the way to go. Why? Because it’s complete independence. The essence of Crypto is to eliminate all third parties. If you don’t need third parties, then simply eliminate them.
Final Thoughts
Becoming a Crypto citizen removes the need for on-ramps. If you have already moved across the border, then there is no need for continuous access. That’s it for this one. Catch you next time!
Time To Consider Hive’s DPOS & HBD As Staking Income Generators
Great Passive Income
Staking has become a relatively easy way for the average Crypto investor to generate some additional passive income. However, the recent “attack” by the SEC has shut down numerous “staking services”, leaving many to seek out alternative ways to generate the yield they had grown so accustomed to enjoying every month. I say monthly. However, most rewards are allocated in real-time.
It is somehow logical to consider that many will choose to withdraw their rewards on a monthly, or even weekly basis, as a form of additional income. There is however a silver lining to increased scrutiny from the SEC, and that is on-chain staking. Choosing to make use of an exchange or staking provider, in order to stake your digital assets does however require the surrendering of your keys.
We all know the saying: “Not your keys, not your Crypto”. Choosing to stake your own assets on-chain is a much safer option. However, some setups are a lot more complicated than others. This is where Hive acts as a great alternative, and enables users to utilize and benefit from the delegated proof of stake (DPOS) protocol. Staking Hive (HP) allows users to earn passively, as well as curation rewards that are in essence relative to each user’s “stake”
The curation rewards might not exactly be passive in nature. However, choosing to spend a little time each day with your morning coffee, in order to upvote a few quality articles can’t really be considered much effort, now can it? There are a few factors that will affect the curation APR. However, consistency and frequency play an integral part in determining each user’s APR.
Hands-Free
Then there is Hive’s stablecoin, Hive Backed Dollar (HBD), which is backed by approximately $1 worth of Hive. Holders of HBD can lock up their tokens in savings, and subsequently enjoy an annual return of 20%. The unlocking process requires three days, which is quite reasonable, and a small price to pay for controlling your own keys. Essentially, approximately $1800 of HBD will earn investors $1 a day.
I think this particular opportunity is becoming a lot more attractive, especially as we continue to experience weakness within the banking sector. Every investment vehicle has its own inherent risks. However, due to the failures of TradFi, the risks associated with Crypto are becoming increasingly palatable for the average investor. In many cases, one could almost argue that the shoe is now on the other foot.
Maximizing the yield of HP, together with HBD is a great way to generate some additional “staking” income. I honestly believe that many will be shifting into HBD during the next cycle peak. Being able to lock in gains, as well as increase those gains quite substantially during the course of a bear market is a rather attractive offer.
Final Thoughts
Diversification is always a good approach to have, and Hive is yet another opportunity that one can leverage in order to create a little extra passive income, or a lot, for that matter. It all depends on the user. I have always been an advocate of utilizing as many opportunities as possible in the creation of passive income. Keep stacking, see you next time!
TradFi & Bitcoin – The Frustration Of “Failure” & The Creative Power It Wields
The Driving Force
Investors turn to investments to generate a profit, just as every day people turn to banks for safety, and perhaps a little yield. However, in both cases, the desired outcome seems to be almost unattainable. Yesterday, we witnessed another brutal sell-off in the stock market. This is exactly what I have been addressing on a rather frequent basis of late. There is no fundamental narrative in favor of true market appreciation.
Markets are relying on random boosts from random places in order to “fake it until they make it”. My recent bullish whipsaw on Bitcoin was solely based on the banking crisis, as I myself had seen this coming to pass in 2023. However, I don’t believe this is it. These are just the initial rumblings, in my opinion. Bitcoin has much to gain in a complete collapse and breaking of trust in regard to the banking sector.
The S&P sold off in excess of 1.6% on an expected rate hike. There was much talk of a pause and even a pivot. However, both were unlikely, yet one still had to consider the possibility, and be prepared. Had the FED paused, the market would most likely have interpreted it as a confirmation. A confirmation that the banking crisis is actually a lot worse than communicated, which it actually is, by the way.
When you begin to look at the Crypto market, especially. There appears to be a lot of confluence to indicate a final flush before truly taking off. Yesterday’s sell-off on the S&P, and the broader stock market, brings the market even closer to that danger zone, in terms of long-term support. The S&P has been struggling around this level for a while now, not really going anywhere.
There is a chance that Bitcoin still sees $30K, and perhaps even higher. A daily close above $27.6K, and a few more rumblings from the banking sector, and there you go. However, close below $27.1K, and the banking sector band-aid holds a little longer, and you are most likely looking at a deep correction. The stock market is bound to have a bit of a bounce today after such a sell-off yesterday. However, further losses would be a rather negative sign, in my opinion.
Bearish Medium Term
This is exactly why I recently stated that I am bearish on Crypto in the medium term. Even though there could be bullish price action in the short term, the dynamics have not shifted yet. The only thing that could prematurely bring that shift is a complete banking collapse of unparalleled proportion. The reason why I think that is not likely, at least just not yet is because every effort is going to be made to “steady the ship”.
However, you can only hide such an inherent flaw for so long. Another rate hike helped to create an illusion that “things are not that bad”, but simultaneously added more fuel to the fire. The question remains: How long can traditional finance stutter and fail before people lose heart and move on? This brings me to the point of failure becoming a force of productivity. It sounds counterintuitive in nature and yet is not.
A Strange Dynamic
Essentially, Bitcoin is moving toward a future where almost any market dynamic is going to be interpreted as bullish by investors. How and why do I say this? Simply put, if traditional investments and banking services become equally as risky, or even riskier than Crypto, then why hang around? If the risk is discerned as equal or higher, investors will move to Crypto. Why? Once again, it’s simple. New technology has tremendous upside potential, in comparison to TradFi.
Let’s just say that the risks associated with either option are the same. Consider, for a moment, that the gains in the Crypto sector far outweigh TradFi. What you now have is two different asset classes with exactly the same risk profile. However, one of them has significant upside potential. Which one do you go with? Essentially, failure creates a case for Crypto. This is a dynamic that I and many others have addressed on numerous occasions.
This, my friends, is the dynamic that will initiate and drive a true decoupling. I mentioned that the recent decoupling is nothing more than an isolated event. Look at yesterday… the stock market sells off, and Crypto sells off. Ongoing failure will eventually destroy investor confidence, and to be honest, there isn’t much else to choose from.
Final Thoughts
This is how I see this playing out. As I mentioned in a previous post, the banking crisis was triggered a little earlier than expected. However, to be fair, It’s really just an initial wobble. We haven’t seen the worst of it yet. As I mentioned in 2022, a perfect course of events would be to experience a stock market crash where Crypto is initially taken along for the ride. A banking collapse, together with a bottoming event would recreate a scenario similar to the one seen in 2020.
Another significant leg down, combined with a significant failure within the banking sector would be the “perfect storm” to send Bitcoin into a fresh bullish phase. If markets find a floor after significant bloodshed, Bitcoin will once again garner attention, similar to that of 2020. If further calamity strikes that affirms a decentralized, unseizable form of money then I would be extremely bullish.
When there’s nothing much left to flush and confidence is lost, Bitcoin shines even brighter and steals the show. You cannot view price action and even technical analysis outside of macro events. This continues to happen. It’s like planning a day at the beach. You get everything ready and are fully prepared. However, you don’t check the weather forecast. Absolute foolishness, and yet this type of behavior is prevalent within the world of financial markets.
Isolated data is just that, isolated. If something is to be relevant it needs to be in the mix. Catch you next time!
Bitcoin Dominance & The Bigger Picture
Bitcoin Dominance Continues To Rise
Although there are a number of altcoins that have performed relatively well during this pump, the majority are bleeding against BTC. That’s right, it’s not only the Bitcoin price that is rallying but also the Bitcoin dominance. BTC is currently outperforming alts, and this trend looks likely to continue. Taking a look at the BTC.D chart below reveals how Bitcoin dominance has surged by almost 10% in a little over a week.
If you are like me and have a few passive income mechanisms generating BTC, a reversal in terms of dominance strength is likely to be a good opportunity to move out of BTC and into alts. Converting your BTC to alts at a local top for BTC.D ultimately secures more coins for your buck. For those unfamiliar with the effect of BTC.D, the higher the dominance, the fewer sats you require in order to purchase altcoins.
Bitcoin dominance is measured against altcoins as a basket, meaning that this is an average, in relation to altcoins. Some altcoins may offer more of a bonus, while others less. In dollar terms, most alts have seen price appreciation. However, in the same breath, most have lost ground in terms of satoshi value. Even if the Bitcoin price were to correct from here, altcoins are likely to correct even more.
This would ultimately cause Bitcoin dominance to remain at fairly high levels. Alts are in a bit of a jam when regaining strength against BTC.D. Just like with any recorded price action on a chart, one can wait for reversal and correction signals in the charts. Regular readers may be wondering why I appear to be bullish in regard to BTC after being so bearish for such an extended period.
Bullish Or Bearish?
The answer is I am still medium-term bearish. Last year I pointed out that a banking collapse was likely to occur in 2023, as well as the fact that it was likely to drive BTC significantly higher. I am honoring my own prediction because I know the event has the power to move the market. Honestly, it happened a little earlier than I was expecting. This, for one, makes the decoupling from traditional markets appear to be a done deal. However, it is still very much associated with an isolated event.
Secondly, a broader market collapse is still likely to affect Bitcoin in the short term. However, if this banking crisis turns into a full-blown banking collapse, Bitcoin is unlikely to be affected by anything. It’s all of these dynamics, and others, that are “allowing” the possibility of further upside. Then there is the FOMC outcome, which I address, amongst other things in my most recent post.
I had envisioned a stock market correction prior to a banking collapse. However, traditional markets have been more resilient than expected. This ultimately suggests that BTC is in for another very short, yet severe correction. If BTC moves above $30K and hammers around between $30K and $40K, there are at least new support levels being built.
Final Thoughts
Personally, I am choosing to play it cool, when it comes to being actively engaged in the market. I have my levels and am waiting for clear confirmations. Furthermore, a negatively interpreted FED announcement could even cancel a $30K Bitcoin, at least for now. Catch you next time!
Market Overview – Crypto Enthusiasts, Looking Like Geniuses Again?
Whipsaw
Crypto enthusiasts definitely have one thing going for them, and that’s conviction. Regardless of the MSM narrative, which flips so aggressively, they remain unchanged in their support of Bitcoin and other Cryptocurrencies. This obviously results in a very predictable response from society, as a whole.
When the market is collapsing, Crypto investors are said to be foolish and overzealous. However, when the banking sector begins to collapse, and Bitcoin climbs 36% in a week… they are absolute geniuses. This is the type of fickle nonsense you learn to ignore as a Crypto investor.
It’s simply all noise, especially when you understand certain aspects of the financial world that much of society is oblivious to. You don’t allow their negativity to sink into your heart. Simultaneously, you don’t allow the positivity or praise to go to your head. You simply carry on doing what you always do… stack sats!
This is perhaps what the average person is unable to understand. They still see Bitcoin as something that is either trendy or yesterday’s news. They simply cannot understand that it’s not a pair of jeans. How it is viewed is inconsequential to its inherent value, and its value and benefits are what make it so attractive. Who cares if so and so is into Bitcoin?
Furthermore, the disapproval of certain individuals and entities is equally as insignificant. The inherent benefits and design of Cryptocurrency are what make it valuable and attractive. This is why Crypto is sought out by some and not others. For many, it’s simply a fad that comes and goes. As a result, such individuals “buy” the euphoria and “sell” the correction.
No wonder they think the way they do. They are applying the rules of fashion and trends to a market that operates in reverse to the abovementioned dynamic. This is why I have never been a trend follower. It puts you at the backend of everything. You either set trends or ignore them. That’s how I view it. In the case of Bitcoin, it’s definitely the approach to have.
Too Many Variables
Currently, there are a number of scenarios helping to push Bitcoin higher. The most obvious is, the banking crisis. There may be moments of alleviation. However, I believe there is still a lot more carnage on the way. This is obviously making a solid case for Bitcoin. Simultaneously, we are also experiencing dollar weakness. If the dollar devalues, then you are going to require more dollars in order to purchase assets denominated and valued in dollars, such as Bitcoin.
There is also much anticipation in regard to what the FED will do in relation to interest rates. Many believe that a pause or even a pivot is on the way due to the fact that banks are literally collapsing. This is however all still speculation. We have to wait and see what transpires, prior to getting ahead of ourselves. I know it’s an unpopular view, but a final heavy correction is still quite possible.
As mentioned in a recent article, will this be at $30K or even as high as $40K? The FEDs decision may in fact be the decider that the market is waiting on. Until Powell’s announcement, I expect Bitcoin to hold, and quite possibly push higher. It’s important to note that this pump is still retail-driven, and as a result, is a lot more fragile than it appears.
Final Thoughts
The “timeline” has now become of even greater significance. For instance, good news from the FED, compounded by a further banking calamity will literally ignite rocket fuel for Bitcoin. However, flip that outcome and the story could change. For example, the FED becomes even more aggressive and there is a period of alleviation within the banking sector.
It is also important to note that while we have experienced a level of decoupling from traditional markets, the stock market is still in a very vulnerable position in regard to trend support. The markets have been somewhat difficult to read of late, and so in many ways, I am adopting a “reactionary trading” approach. In short, I am “cautiously bullish” in the immediate short term. Anyway, we wait and see how the week unfolds… see you next time!
Establishing A Crypto Business Is Not Void Of Sacrifice
The Real Deal
To some extent, someone who has managed a business has somewhat of an understanding of what’s involved in owning any type of business. On the other hand, someone who has only ever worked as an employee is rather oblivious to much of what is required in taking on such a venture. Business owners understand patience and sacrifice, at least for the most part. An employee works X amount of hours for the day and then looks for an immediate exchange of their time for money.
Unfortunately, those who simply translate their “employee” expectations into the world of business ownership or entrepreneurship are most likely eventually going to walk away disillusioned. This is especially true if you are starting a business from scratch, which is generally going to be the case when it comes to a Crypto business. Let’s just clarify something first. This is a business model that can replace your traditional income, and hopefully a little surplus as well.
We are not talking about building business empires here. Starting a business from scratch is an entrepreneurial venture. It requires hours, months, and even years of hard work with sometimes little to no reward. For some, their business model will require establishing a clientele, or in the case of a Crypto content creator, an audience. This takes time, and generally requires “stubborn persistence”.
With the rise of Crypto and specifically, WEB3, content creation has become a focus for many looking to start a small “Crypto business”. It’s an obvious starting point for many. However, many underestimate the process. Unless you are “buying” your way to the front of the line, it’s a long journey laced with sacrifice. Individuals are often enticed by what they see taking place in the lives of others. However, they are Unaware…
Unaware of the journey and dedication required to reach that point. Unaware of the discouraging moments, the challenges, and even disappointments. Success is guarded by many a challenge and difficulties. It does not “surrender” to you, simply because you desire to attain and possess it as your own. It’s a battle and one that must be engaged in daily, until such a time as there is a level of victory.
A Dangerous Snare
For many, the beginning of such a journey begins while they are still employed and working for a salary. The motivation behind their decision is to gain a level of independence and eventually ditch the 9 to 5. However, taking on such a level of additional responsibility and pressure doesn’t come without its trappings. Fatigue is a very real issue and often catches one unawares. Fatigue is dangerous for numerous reasons.
The most obvious of course is your health. Taking care of one’s health can easily fall to the wayside when overburdened and on the edge of burnout. Another important aspect is efficiency and productivity. It’s a proven fact that a person’s performance and productivity take an enormous knock when fatigued. These are the snares that so easily entrap zealous entrepreneurs. It’s a path of numerous challenges.
Challenges that extend beyond the “business” realm. There can often be a lot to balance all at once, which can be rather overwhelming at times, especially with the inherent challenges that accompany a new business venture. Regardless of where you may fit into the picture, it’s a road of sacrifice and dedication, and anyone taking up the challenge should do so in light of this reality.
Final Thoughts
Thanks to YouTube influencers, the majority of people believe that having a “Crypto income” is synonymous with lying around the pool, frequenting holiday destinations, and driving flashy cars. Anyone who has embarked on this journey with modest means will tell you just how challenging it can be, especially during the foundational stages.
It’s a commitment, and one that spans over the long term, not just a few months. It’s true, there’s a wealth of opportunity within the Crypto space. However, it doesn’t come without effort and a level of sacrifice. See you next time!
A Wage Is Earned… Wealth Is Created…
The Limitations Of Human Effort
No matter who you are working for, you are going to face two very real obstacles to generating wealth. Firstly, a human limitation as to how many hours you are able to work, and secondly, a limitation as to how much a boss is prepared to pay you. Let’s be honest, unless you are high-level CEO, you are somewhat limited in your ability to generate wealth.
Warren Buffet is well known for pointing out that unless you find a way to earn money while you sleep, you will end up working your life away. In this particular instance, I actually agree with Buffet. So, what is the essence of this well-known statement by Buffet? Well, he is basically suggesting that money is earned, while wealth is created.
In other words, work during the day for your living expenses, and find a way to generate some form of passive or residual income that is working for you 24/7. Of course, you can find a way to help the process by incorporating a side hustle. However, unless those earnings are going into some type of passive or compounding mechanism, you are still operating in the wage arena.
Investments, Passive Income & Compounding
The wealth arena is generally one of investments, passive income, and compounding. By making use of these three pillars of financial wisdom, one can begin a journey of creating wealth. Ideally, this is a journey embarked on early in life. The creation of wealth takes time. Fortunately, Crypto offers many of us a way of speeding up the process.
Investments
This is a very broad arena, and subsequently offers investors an array of opportunities. Real estate has always been an investment class that has performed exceptionally well over the long term. However, there are many barriers to entry for more conservative investors. Tokenized real estate is definitely an avenue to explore for those who are looking to gain access to the real estate market, but have limited capital.
Traditional Crypto investments with the potential for enormous gains are always on my shopping list. There is nothing like a good 50X, 100X, or more! Investments like these can literally catapult an investor into a newly found position of wealth. Altcoin hunting is a practice that carries a high level of risk. However, the tremendous potential that this strategy carries is truly unparalleled.
Passive Income
This has always been top of my list. There is something almost sacred about setting up a system or mechanism that continues to “print money” without any oversight or effort. This is literally earning money while you sleep! Staking is an obvious option, and in many cases offers daily income. Tokenized real estate also has a passive dynamic to it. While the property is appreciating in value over time it is also producing daily rental income.
There are many other ways of setting up and establishing a form of passive income. Whether it be older tried and tested methods or more current alternatives such as DeFi. If you are thinking of investing in DeFi, you might find the following article helpful: “The DeFi Dynamic – Enjoying Success Where Many Fail”. DeFi carries inherent risk, so definitely do your own research.
Compounding
The final ingredient is to add the dynamic of compounding to your investment income, as well as your passive income. This creates a powerful synergy that goes on to increase your holdings over time. Compounding is a very effective strategy, especially over the longer term. If you do a few calculations, you will discover just how powerful it becomes as time passes. It literally takes on a creative life of its own. A continuous flow of income that is further compounded is a truly powerful dynamic.
Final Thoughts
Unless you begin operating within these practices and pearls of wisdom, you are unlikely to encounter any meaningful degree of wealth. A wage can only go so far and accomplish so much, no matter its size. Furthermore, you often find that high earners become high spenders, basically nullifying their high income. Wealth is created, not earned. See you next time!
Adopt Blockchain Or Face Future Exclusion
Sorry Chaps
Whether Charlie Munger and Warren Buffet like it or not, Crypto and blockchain are on a tear, regardless of global uncertainty. It’s very much a snowball effect… the bigger it becomes, the faster it moves. The momentum is building up, and the current spike in the Crypto market cap is doing a lot to encourage a realization and awakening to the shift that is currently unfolding.
People are beginning to think a lot more for themselves. On a broader level, the blatant lies that have been packaged as truth are beginning to unravel, and as a result, are causing independent thought processes. Not too long ago, the opinion of someone like Buffet held tremendous weight. However, the acceleration of mistrust has also brought about a more sober-minded society.
Industries, corporations, and even small businesses are beginning to see the need for adjustment. In order to remain relevant, the incorporation of Crypto and blockchain is unavoidable. Those immersed in markets and economic activity are now beginning to understand that a blockchain-based world is inevitable. Furthermore, those who adjust now, significantly strengthen their future prospects.
Immutable Ledger Technology
This is at the heart of the blockchain revolution. An immutable ledger… accounting system, and record-keeping archive takes commerce and the storage of data to a whole new level. A level of simplification and increased efficiency and accuracy. A level of “performance” any business or industry would find extremely attractive.
With every past technological advancement has been the crowd who refused to climb on board. These individuals and entities either faded away into obscurity or rushed for the door at the last minute. If we are to look at history, we can see a clear endorsement of adopting new technologies once they have reached a certain level of adoption.
I think we can all agree that 2020/2021 was indeed that moment. Even in countries such as El Salvador and South Africa, blockchain is being implemented and incorporated into everyday transactions and experiences. As I have addressed before, Crypto is being resisted by a rather elite group of individuals that wish to recreate this “moment” with their own “inventions”.
If they were at the spearhead of the Crypto revolution this thing would be on another level by now. However, in many ways, they are being sidelined and decentralized networks are being adopted and incorporated by both small and large enterprises alike.
Tipping Point
Crypto and blockchain have managed to gain a significant head start, ultimately creating a tipping point. A point from which there is no turning back. This is the realization that is sparking adoption and incorporation, regardless of price. It’s inconsequential, individuals and entities are beginning to understand that there is a lot more at stake.
They are positioning themselves for the future. They understand that market fluctuations are part and parcel of the process. Those choosing to focus on price are missing the woods for the trees. It’s about positioning oneself for an inevitable future. Choosing to be indifferent, at this stage, will eventually become a regret of significant magnitude.
Final Thoughts
There will obviously be a struggle between decentralized blockchains, private blockchains, and CBDCs. This too is inevitable. However, public decentralized blockchains have managed to garner significant attention, adoption, and inclusion. This cannot simply be undone. Crypto, as we know it, was the first foot through the blockchain door. In fact, it is the foundational expression of blockchain. This ultimately gives Crypto the “blockchain upper hand”. That’s it for this one. See you next time!
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