Research, Metrics & Crypto Investment Decisions

Some Investors Even Ignore The Basics

When it comes to the term “investors”, there is often hesitancy on my part to actually use that term in some instances. Anyone that purchases an asset is by default referred to as an investor. However, anyone who paints a painting is not necessarily an artist. Referring to certain individuals in the Crypto space as investors is actually not only inaccurate but also insulting to true investors. I am generally referring to the group that just buys something based on hype or something Elon or some other “influential” person happened to mention.

The basics of investment ideology are not even visited, never mind ongoing research, performance monitoring, and extrapolations based on numerous criteria and data. What makes this even more saddening is that some of these “investors” actually happen to get lucky and walk away millionaires.

What I Really Wish To Address

I am actually wanting to point out a few points to those investors that are actually doing research and trying to get a handle on potential investments. Firstly, looking into the future on a potential investment very much relies on where the coin is currently ranked and how much the appropriate market cap is. I often talk about investing in micro-caps because the potential upside is massive. This strategy does however involve very strict disciplines, otherwise, wreckage is basically guaranteed. It all depends on the return you are trying to secure. I see a lot of Crypto enthusiasts getting excited about a 30% or 50% gain.

This is stock market territory unless of course, you are intraday trading or scalping. When I consider a Crypto investment, not a trade, I am generally looking at many years. Consequently, I am also then looking at 100X and upwards. As I mentioned in my recent post on Hive, “The Real Money In Crypto Is Made During Bear Markets”, what you do in a bear market is a direct reflection of what you experience in a bull market. What this comes down to is that ultimately, you require years in order to experience significant gains. This is how 100X and above returns are achieved.

Time In The Market

Upon entering 2022 I will be entering my 8th year in Crypto. I have seen ETH at like $12 and BTC at a few hundred dollars, which subsequently means that I have seen how time in the market rewards. Generally, fund managers will always push the “time in the market” narrative because it rewards them by default. This is however a true viewpoint in the Crypto space. I can almost hear the responses, “that was back then when the market was in its infancy”. True but that does not mean that it does not still happen. I bought the following coins in the final months of 2019, or in 2020. Listed below are their current values, the price at which I bought, as well the ATH levels that were reached in April or May of this year.

Entry Price

SOL – $0.26

UBT – $0.01

Current Price

$170.72

$1.39

Recent ATH

$259.96 (999X)

$4.22 (422X)

So this is the recent performance of the market and what made these choices very good risk/reward investments was the low market cap. If a project is only valued at millions, or hundreds of millions, there is tremendous upside in the event that the project experiences even moderate success. It does not end there.

What About General Market Growth?

So looking to where a project may arrive is isolated potential growth of any particular project. This does not factor into the equation, the general appreciation of the Crypto market cap. Not so long ago the entire Crypto market cap was only a couple hundred billion. We have almost hit $3 trillion since then, which has been factored into the current prices across the board. So, if you can warrant a 50X return in time if the project succeeds, that figure may be multiplied many times over as well. This is how you succeed at investing in this market. Good trades will make you decent money but you won’t create wealth that way.

I guess a lot of people are happy with some additional money but in my opinion that is missing the forest for the trees. Personally, I invest, I trade, I build, I write, simply because I don’t view it as extra money, or even a business. It’s an economy diversified for as much safety and gain as possible. Your viewpoint dictates your actions. The more time spent in the market, the greater is the perspective, which can open up tremendous opportunities. You need to see it before you build it!

Good Decisions Require Good Research

There is no escaping putting in the time in order to sift through what’s on offer in the Crypto space. You could avoid it completely but then you would be more of a gambler, than an investor. Sufficient research is an imperative aspect of investing and even still is not a guarantee that you will succeed. Serious investors put in serious time to try and identify tomorrow’s gems!

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