The Golden Thread
Decentralization has always been something that Crypto purists have held in high esteem, and for good reason. This has been my motivation, especially, in regard to blockchains like Hive, Ravencoin, and a few others. There are no guarantees when it comes to investing, especially in the Crypto space. Decentralization is however one of the most important factors that help to provide future confidence. As we have all noted, the casualties of 2022 were all in some way due to centralization.
We are now entering into a time when decentralization is no longer attractive, but imperative. Once the speculation wears thin and the hype surrounding projects like BONK begins to lose its shimmer, the shift is likely to kick in. I have written about the shift to quality that takes place due to bear markets. This will become even more prevalent in 2023 and beyond. How investors choose to position themselves from this point on is of great importance.
Bull markets have continued to disperse gains across the altcoin market. However, if you have managed to analyze this performance, you would have noted that many altcoins did not reach their respective previous all-time highs during the course of the past bull market. So, even though a high tide continues to lift all boats, many are not experiencing the rallies they once did. What do you think investors will be looking for in 2023?
Unfortunately, pretty much every altcoin and layer 1 had an ICO and remains at risk of being slammed by the SEC. Projects that are not in this category and operate under a strong level of decentralization will eventually be scooped up by investors. Choosing projects that fit into this category could be a rather smart move. Remember, in order to make significant gains in this market requires action that is often not appreciated in the moment.
Purchasing SOL below $0.30 did not garner me any appreciation. The same can be said of many others such as DOT and UBT. The market operates under a “herd dynamic” and if you want real gains you need to break away from the herd. It is the herd that later provides your gains. This is another reason why I exited ETH. The herd has done its job. The table has been cleaned. Anything from this point on is simply nominal.
Decentralization offers a level of security and shelter. This is what investors will begin to appreciate, and even seek out. Being exposed to the Crypto market with a level of “insurance” is the way to go. Investors have not truly appreciated the concept of risk management and diversity. However, even though many are still to learn this lesson, I believe that 2022 has managed to humble a number of participants into submission.
We don’t willingly adjust our behavior. We don’t decide to become better investors. We go through painful experiences and then choose to learn from those experiences. There are those who experience devastating results, and yet continue to behave the same way. The market will humble the best of us at one point or another. Choosing to approach the market with humility allows the market to communicate with you.
What Is The Market Saying?
You can’t go against the market. You cannot overpower or outsmart the market. Successful investors learn to listen as opposed to pushing their own agendas. If the market is not headed for the outcome you desire and predict, your endeavor is in vain. Those who study the market, and learn to be impartial, gain the best perspective, and ultimately, the best returns. Observing the trends, and the changing of the seasons is imperative.
It appears as if the market is headed towards a season of strong attention to decentralization. The focus will be on decentralization. For many of us, this has always been of great importance. Those who have managed to focus on projects such as Hive and others are likely to be handsomely rewarded in the future. It’s time to swim with the tide and catch the wave of decentralization that is on the way.
You don’t catch a wave when it arrives. You have to paddle out to the backline and position yourself so as to catch the swell as it comes through. Investing is the same. Identify the swell (trend) and then position yourself via allocation. If you wait for the trend to hit, it’s too late. These are my thoughts toward the future, and definitely doesn’t constitute investment advice. The golden rule: Do your own research! Catch you next time.