A Viable Alternative
It is difficult to comprehend how any good could have come out of the covid lockdowns. However, there were a few instances where, given the correct approach, a positive outcome was attainable. Being unable to work forced many individuals to explore the idea of online income. This ultimately introduced many to the world of Crypto.
This happened to coincide with the initial stages of a new Crypto bull market, which managed to garner a lot of attention, along with new investors. This in turn managed to produce a new group of Cryptoneurs, individuals who would now choose Crypto as a full-time income source. There are many who chose to utilize this moment as an exit from traditional income models.
The only problem with this decision is that it is relatively easy to excel in a bull market. After all, everyone is a genius in a bull market. However, all bull markets are followed by bear markets, and here is where the true challenge arises. Generating an income during a bull market is relatively simple. Prices simply continue to rise.
So, whether you are hodling, trading, or in DeFi, your income is simply increasing by default. This will often lull participants into thinking that it’s simply plain sailing from here. However, what actually does occur is a bear market that eventually cuts income streams by 90% or more! This is where Cryptoneurs face their most significant challenge.
Honestly, I don’t even know why the term “surviving a bear market” is used in relation to the average investor. Unless you are earning your income from Crypto, there is nothing to survive. Your life goes on as usual. Your bills are paid, there’s food on the table, and all other financial commitments are taken care of. The Cryptoneur, on the other hand, is relying on a collapsed market as a source of income.
This is where the rubber really hits the road. In many ways, surviving a bear market as a Cryptoneur is a defining moment. It’s make or break, do or die! As a Cryptoneur, if you can make it through your first bear market, the worst is over. Income will once again begin to rise along with the next bull market, and the chances of you having to revisit these levels are unlikely.
Anyone who survived 2018 never had to revisit those lows again. Even though the 2021 bull market surrendered to yet another bear market, there was a level of safety. In other words, if you could survive when Bitcoin was at $3K, you definitely can survive at $15K, right? This is why I promote the idea of building your economy over multiple years before expanding your lifestyle.
Your first bear market will be your biggest challenge, and if you survive, chances are you are set. Surviving your first bear market as a Cryptoneur is a prerequisite to future success. This is where your “business” is given the seal of approval. The first bear market is the most challenging. They become increasingly easier to overcome, as capital grows during the bullish times.
It’s a case of five steps forward, three steps back. However, your first bear market doesn’t have a base to support the initial three steps back. A desire and effort to survive your first bear market is imperative. It may seem extremely difficult, but survival makes the next one that much easier, to the point that you can pass through future bear markets with a solid income still intact.
This Is The Real Shift
Passive income and monetization methods have always been of interest to me. Approximately five years ago, I was intrigued by the idea of actually creating my own little economy. After discovering a wealth of opportunities and ideas within the Crypto space, it seemed like the most logical move. This is essentially a shift to independence.
This is one of the most important benefits of Crypto, in my opinion… independence. This does not necessarily imply that one has to now carelessly abandon their day job and begin “living the dream”. It does however become extremely attractive as a backup income source, or even a future full-time income. Building an economy that continues to work and produce income for you is of tremendous value.
If it’s a side hustle it has even more chance of growth, as the income it generates is not necessarily disposable income, and as a result, can be utilized for future growth. Anyone who embarks on such a journey is thinking one of two things or even both. Firstly, they are building a backup income source, which in today’s world is a smart move. Secondly, that they are building a future income source to replace their current income.
Building your own economic model will most likely revolve around residual and passive income. Once the foundation is in place and the model is expanding, the hard work is over. From this point on it is more a case of oversight and maintenance. I have always encouraged others to think along these lines. Having a safety net can remove a lot of stress, and provide stability and relief during unexpected hardships.
The Number One Rule
One of the most common mistakes is to increase one’s lifestyle once there is additional income at hand. This is a dangerous trap, as it puts you right back under the same “pressure”. In essence, all that such behavior does is provide you with a larger “salary”. The buffer is no longer there, and the security of a future income has also been removed.
In order for this idea to work, discipline needs to be a priority. The beauty of this idea is that you are also able to enjoy the benefits of Crypto’s cyclical nature. Your income will grow substantially every four to five years at a rate that far surpasses any wage increase. A well-established model will eventually produce a significant income. This would be the time to consider increasing your lifestyle, and not before.
I guess those with an entrepreneurial edge will be more drawn to such an idea. However, it is also quite evident that more and more people are beginning to take their financial condition a lot more seriously than previous generations. Financial intelligence is on the rise, and thank goodness because trust is eroding fast. The only person who truly cares about your future is you. See you next time!
This is something I have been chipping away at for some time now. I truly believe that certain projects within this particular niche are going to perform extremely well in the future. When exactly that will be, I cannot say. However, there is the possibility that the next bull market and a “power smack” from the SEC are going to coincide.
This would obviously draw much attention to the projects that are inherently “pure”. Projects that launched without an ICO or pre-mine are on another level, and yet not truly appreciated at this stage of the game. However, I do believe that in time they will be recognized as rare gems within the Crypto world, and that time is fast approaching.
When the only way to get your hands on a coin is to mine it or buy it from someone else who mined it, you truly have something unique. When you look at the distribution of many of the top altcoin projects you begin to see just how superior fairly launched Cryptocurrencies are.
Projects Within This Niche
There are quite a number of well-known altcoins that fall into this category. Litecoin, Doge, and Monero, just to mention a few. However, as regular readers will be aware, my eyes are on Ravencoin! Along with being a fairly launched Cryptocurrency, Ravencoin enables the tokenization of physical and digital assets. The NFT market is also beginning to attract attention, as well as adoption.
Even though there are quite a few options, I like the idea of Ravencoin. Furthermore, it is a layer 1 blockchain that operates outside of smart contracts, which is another rather unique aspect that positions it rather exclusively. The market cap is still positioned for tremendous growth, provided it is able to secure an ever-increasing user base and community.
Many alternative projects within this particular niche have already experienced rather significant returns and are already well-positioned within the Top 20.
Monero is another fair launch project that has managed to remain relevant since its launch in 2014.
Despite many exchanges delisting XMR due to concerns associated with the privacy dynamic of the coin, Monero continues to trade on top exchanges such as Binance, Kraken, and KuCoin.
XMR is currently ranked 25th according to market cap and although the potential upside is not as glorious as RVN, it still has room for some significant price appreciation.
When it comes to privacy and decentralization, Monero is considered by many to be the “coin of choice”. It is important to note that the negative spotlight on the privacy sector has not managed to affect Monero. XMR continues to be relevant even though it was launched almost a decade ago.
There are quite a number of Crypto projects that fit into this niche. However, as always identifying the correct ones is always key. In my opinion, Ravencoin offers the best risk/reward ratio. This is why I am quite open to building a decent position over time.
As always, this is not investment advice, and one should always endeavor to extensively research potential investments and future decisions. See you next time!
The Human Mind
Unfortunately, the human mind is inherently opposed to the investor mindset. The two are at enmity with one another. An untrained mind that chooses to become involved with investments can only last so long. If the market turns against such an investor, they consider exiting the market and calling it a day. Reasoning that it wasn’t for them, or that it is simply a waste of time.
However, recent price action within the Crypto market has revealed how markets seem to exhaust investors almost perfectly. If making any investment was a given certainty, everyone would become dedicated investors. However, it is this very aspect that manages to discourage the majority. Uncertainty can be equated with a “window of opportunity”. Once an investment becomes a “sure thing” life-changing gains have already been made.
Uncertainty that is complimented by additional fundamental dynamics can create an opportunity that carries a high probability of success. These dynamics often change from cycle to cycle, and identifying future trends and events can be very effective in isolating current “uncertainty” which has a high probability of future success. Most new investors are essentially looking for a level of certainty.
However, this is not really the approach that secures the gains that matter. This is the approach often taken by a very conservative fund manager. The returns on such an investment are essentially at the very bottom of the spectrum. This is primarily due to the risk profile being extremely low. As certainty increases, the risk decreases, and with it the potential gains. Simply diving into a risky investment isn’t the solution either.
Investment is like a puzzle that is made up of numerous “pieces” or dynamics that ultimately provide a high probability of success. I have noted how many noobs often manage to “get hold” of a single piece of the puzzle, believing it to be the golden thread that will eventually secure future success. However, a puzzle is made up of more than one piece, and while you may be holding an “authentic” piece of the puzzle, it is powerless in isolation.
It’s funny how confluence always manages to emerge within the world of investments. Confirmation is imperative, whether it be for trading, investing, or identifying income-generating opportunities. The puzzle always needs to be completed, in order to see the “image of probability”. The term FUD (fear, uncertainty & doubt) incorporates the element of uncertainty. Historically, entering the market when the fear and greed index is at extreme fear, and simultaneously great uncertainty is generally a good move.
Uncertainty has a way of flushing out a certain type of investor. This often has a way of creating tremendous opportunities. This is yet another “short-term” example of how uncertainty is often at the heart of a good entry, or investment. However, as mentioned earlier, simply acting on this aspect, void of the appropriate puzzle pieces doesn’t work either.
The aspect of uncertainty will often scare many investors away. However, if you have managed to get a hold of the puzzle pieces, you are in a “privileged” position to be able to see the “picture of probability”. Making investment decisions with this in your favor can provide you with a tremendous edge, and ultimately secure future success.
Conviction Leads To Action
There are many who choose to invest in Crypto. However, on closer inspection one often finds that a certain dynamic is often missing… and that is conviction. Once you have a firm conviction regarding a particular project, things begin to happen. Accumulation takes on a whole new meaning. You begin looking for funds, or even selling other coins in order to grow your stack.
This is the behavior of someone who is motivated by conviction. Accumulation becomes an absolute urgency, and the acquisition of every possible coin, a worthy endeavor. This is the mindset and behavior that is necessary for true bull market success. Finding conviction and a passion to match is imperative.
This is where the rubber hits the road. Making headway in the accumulation of a coin that you really believe in becomes a fire that feeds itself. Fire begets fire, and so acceleration kicks in. Before you know it, you are making real progress in terms of the size of your stack. A lot of people publish the specifics of their goals as an additional form of motivation.
This creates a type of “accountability” that many find helps to motivate them even further. Goals play an enormous role in avoiding stagnation and promoting growth. Whether they be measurable goals or productivity-based goals, both are able to encourage and motivate.
Pull Up A Chart
If you look at the BTC chart on the weekly time frame, you will note that we are currently in a reasonably good position regarding accumulation.
I mentioned in September that the final quarter of 2022 would be a relatively good time for reasonable accumulation, especially for the average hodler. The following excerpt is taken from a post published in Septemeber:
I believe we are entering a time that will be a good opportunity for accumulation. However, I am still awaiting further downside. The macro picture is very tricky at the moment and I am not yet convinced.
Lower levels are always possible, and I remain cautious in regard to that very fact. However, we have reached relatively deep into the range. The market is simultaneously still in a downtrend, which suggests that despite what others may be saying, you haven’t missed the bus. It’s a good time for accumulation. Once BTC breaks the long-term trend line and begins ranging above it, one can accumulate a little more aggressively.
It’s important to note that there is currently no trend reversal. I repeat, the long-term bearish trend has not been broken, never mind, confirmed. Bitcoin has to close above $25K and begin printing some fresh price action at that level, or higher. It also depends on what you are accumulating. Some coins might be displaying technicals that promote moderate accumulation, while others not.
At the end of the day, everyone has to make their own calls. One thing you can be sure of is that in time, the market will validate and affirm wise decisions.
The Golden Rule
Diversification has always been an extremely critical aspect of effective risk management. I think 2022 has been a prime example of how imperative good risk management truly is, especially within the Crypto world. Legacy investments are not as likely to incur complete collapses, unlike the Crypto sector, which can be a minefield. As you know, landmines are not visible, at least until they blow up.
Having multiple investments “blow up” on you is something you really want to avoid. Apart from doing a significant amount of research, diversification is a key aspect of reducing risk. However, if you really want your portfolio to perform well you have to be exposed to projects capable of significant returns. This is however a two-edged sword, as a high reward generally implies high risk.
This dynamic poses the following question: Can focus and diversification co-exist? For many, it is simply a case of one or the other. However, it is possible to design a relatively strong portfolio in terms of diversification, while still maintaining a relatively strong focus on one or more altcoins.
This all comes down to relativity ratios and understanding the potential upside. I have mentioned that when I am considering an altcoin for significant gains I like to look at projects that are still small, yet stable. This generally tends to be projects that fit into the $80 million to $200 million market cap range. A “successful candidate” also needs to have some decent daily trading volume.
Marrying Risk & Reward
A portfolio that has 1% allocated to a potential moonshot stands to lose that entire 1%. However, if it were to 100X that 1% would cause the entire portfolio to double. Essentially, generating 100% portfolio growth with a fractional allocation. There are many who are somehow blown away by the idea of 100X.
Are you aware of how many coins/tokens managed this return and higher in the previous bull market? Even Cardano, a top-tier coin, generated well over 100X from the bear market bottom to the 2021 peak. The problem is poor portfolio construction when it comes to relativity ratios. Instead of allocating a few percent, investors deploy heavy allocations where risk is inherently present.
Understanding the potential of a project by considering numerous dynamics helps to create a reasonable interpretation of future prices. Taking this into consideration, along with the risk factor will help to formulate a fairly accurate relativity ratio. Getting this ratio right can make a significant difference to your portfolio over time.
Putting a lot of thought and planning into the construction of your portfolio can make all the difference. In many ways, many miss out on enormous gains because they have never studied or applied much thought to portfolio construction. An investor can risk 5% of their portfolio by allocating 1% to high-risk/high-reward projects.
Rather, what often takes place is heavy allocation to projects that don’t offer much potential in terms of “real gains”. Imagine if just one of these 1% risk allocations did a 100X, or even 200X. Planning is imperative, and now is the perfect time to be doing it. See you next time!
It’s All Coming Together
The idea of regulation and “slam dunks” from the SEC is not a very attractive idea, to say the least. However, it is still part and parcel of what needs to transpire in order for Crypto to “dominate the decade”. Numerous developments are beginning to come together, ultimately, preparing Crypto for an unparalleled decade of performance and adoption.
Let’s not forget that many future trends are directly tethered to the Crypto space. Ultimately, blockchain changes everything. The metaverse and AI are both very much inherently Crypto in nature and are still to experience real growth, adoption, and development. Crypto haters will have no option but to acknowledge and witness the growth of this particular industry.
This is my 8th year in Crypto, and my conviction is as strong as ever. What I have seen over this period of time has only served to strengthen and enhance my conviction. If you were around back then you will know that it was mostly considered an enormous gamble. That has since changed. Now, it’s simply a case of when!
When Is Now
If one looks back over the past two years it actually becomes rather apparent that “when” has already begun. The adoption of Crypto as legal tender, along with numerous other significant developments have all served to announce that this is in fact Crypto’s moment, and ultimately, its decade!
When you begin to view the Crypto space from this perspective it becomes easier to envision the end game. Bear markets have a way of destroying hope amongst newcomers, as well as those lacking true conviction. If you want to evaluate the strength of your conviction then look to your actions. Your actions reveal what you truly believe.
The Journey Continues
The resilience of Bitcoin, in particular, has only proved how powerful anti-fragility can be. This network has overcome challenges that would have crushed traditional networks and business models. There are many cases of survival, despite the odds, Bitcoin just happens to have shouldered much of the brunt.
For the average investor, this is a journey of accumulation. Increasing one’s holdings at the best possible price, while simultaneously staying up to speed with the industry is the name of the game. This is what investors need to be doing as they continue down the path. Development and expansion are happening everywhere, and you want to be exposed to relevant and significant projects.
However, what will be relevant in three years’ time might not be relevant now. I have previously mentioned that I believe the altcoin market is yet to be shaken by the SEC. This has encouraged my research and accumulation of fairly launched projects. This includes the absence of an ICO.
Currently, this is not really of much importance. However, I do believe that it is just a matter of time before it becomes almost imperative. FTX was a great exchange until it wasn’t. A project that does things right will outshine those that were built on a questionable foundation.
Fortunately, many are oblivious to this, and so investment opportunities abound. Once again, it’s all about conviction. You have to see and believe in the future before it arrives if you wish to benefit from it. You can’t begin investing in something once everyone has realized it. Conviction can be lonely… but equally profitable.
DeFi is a relatively passive and reliable form of income within the Crypto space. However, during a bear market, the dollar valuation of generated yields tends to drop significantly. This takes place across the board, as altcoins usually go on to correct at least 90% from the bull market peak. Essentially, you would be better off compounding yields, as opposed to realizing them.
This dynamic places investors in a somewhat difficult position. How does one go about earning Crypto income if Defi yields and altcoin valuations are in the dust? There are two very efficient alternatives that I have seen to be extremely consistent, regardless of market conditions. This is always a very important aspect to consider: What happens if the market corrects?
Many investors only consider and plan around market dynamics that are in their favor. However, what happens if the market turns against your plans and ideas? This is why the following ideas are so very powerful to incorporate. Firstly, they perform in any market, and secondly, they create a level of stability when it comes to your Crypto income.
Traditional Residual Income Ideas
When you mention the term “passive income” in relation to Crypto, it is often accompanied by thoughts of staking. This approach however requires capital allocation, and as just mentioned, often is not very profitable in a bear market. Investors can however turn to legacy-styled passive income models via affiliate marketing and others.
Even if a particular idea is not Crypto-based, many opportunities offer payment in Crypto. The affiliate model has been an extremely successful model in many industries. Developing teams and succeeding in this particular environment is to some somewhat of a gifting. There are those who just seem to excel in this particular field.
If you are earning ad revenue or being paid by a platform that utilizes advertising networks, you are indirectly leveraging this model. There’s only one reason why people will pay to run ads and it all evolves around this particular niche. There are many Crypto enthusiasts currently benefiting from this model without even realizing it.
Good Old Fashioned Work
Yep, that’s right! Choosing to rather get busy than simply complain is always a good place to start. Many have turned to content creation in recent years and have managed to earn additional Crypto via this particular strategy. A blockchain such as Hive is a great place to begin building a brand. It’s important to note that no matter how you go about this particular idea, it will require time.
Building an audience and establishing a reader base takes time. Interestingly, content creation ideas often make use of the first idea as a form of income or monetization. They can operate independently, but I have often seen how these two ideas tend to overlap. Even passive income requires work, even if it is only in the initial stages. So many would like to earn Crypto without doing much at all.
However, this is a rather unrealistic expectation, unless you are incredibly wealthy and simply put your capital to work. These are two ideas that pretty much anyone can do. Other alternatives such as trading require knowledge and a particular skill set that often takes years to develop. By harnessing these particular approaches, income generation can begin.