8 Rules for Cryptocurrency Investing: Rule 2 – There is No Easy Way to Make Millions
“Cryptocurrency and Blockchain Technology”
Don’t be a Fool, Don’t Risk Too Much $, and Be Realistic 2:42
Why Realism Won’t Stop You Possibly Making Spectacular Returns 12:45
Have Awareness of How Young this Investment Space Is 19:25
There is no Easy Way to make Millions Quickly 26:23
Crypto Markets have lots of promoters & advocates making lots, and lots, of Claims…
…but since the January 2018 Crash, in reality, there have been lots, and lots, of Losses
So, it’s important to cover some of the realities of Crypto Investing (and all types of Investing!)
Today, we will cover:
1) ‘Don’t be a fool, don’t risk your more than you’re prepared to lose …and be realistic’
2) ‘Why realism won’t stop you from possibly making spectacular returns in crypto’
3) ‘Awareness of how young this investment space is: the Risk & Rewards this implies’
4) ‘An alternative interpretation to “There in No Easy Way to Make Millions.”’
Don’t be a Fool, Don’t Risk Too Much $, and Be Realistic
* Don’t sell your house to buy the Magic Beans (Crypto Beans!)
This idea is linked to the 1st Rule.
Use appropriate portfolio allocation techniques.
Stay away from all leverage, unless a professional or expert (even then?!).
“Don’t risk more than you are prepared to lose”.
* Don’t fall for the big claims & promises
Current lack of regulation put few limits on what some can promise.
You’d be surprised about how regular you’ll be a target for:
Blatant Scammers, Blatant Pump & Dump Schemes, or ‘Advisors’ who Don’t Disclose Conflicts (whether a holding or relationship).
* Be realistic. Are You a Better Investor than Warren Buffett?
Warren Buffett has made an average of 21% per annum …not 210% or 2100%.
These returns have helped Buffett make $90B …not bad returns, after all!
(A mix of) Bonds have averaged 7-8% per annum, the S&P500 averages about 12%.
Why Realism Won’t Stop You Possibly Making Spectacular Returns
Ethereum ICO Price: approx. $0.40
Today’s Price: approx. $220.00
i.e. 55000% return
Early Mine or Early HODL:
ZCash Price a few Months after Launch in early 2017: approx. $40.00
Today’s Price: approx. $120.00
i.e. 300% return (in less than 2-years… even after 2018 crash!)
General Crypto Bull Runs:
Mid 2015 – New Year 2018
…even in periods during 2018, post-crash!
“All boats lifted by the tide.”
Have Awareness of How Young this Investment Space Is Bitcoin only launched in 2009… (i.e. Risks)
– Will Today’s Cryptocurrency Fade Away All Together?
E.g. Blockchain Becomes Something Completely Different (Netscape or Google, Pets.com or Facebook.com?
E.g. Become Hampered by Tech and Just Die (Scalability & Use or Quantum Computing)?
Have Awareness of How Young this Investment Space Is ‘Good Side’ of the Same Argument… (i.e. Returns)
– Only About 25m Crypto Wallets have been Setup until Q2 2018
I.e. May be Only about 0.5% of global population…
and stock ownership is approx. 50% of US population and direct stock ownership is 36% in Australia
What does this mean for the capacity of future demand for Crypto?
E.g. 2% of Americans owned stock before the famous 1929 crash
Have Awareness of How Young this Investment Space Is
– Most new markets face difficulty…
‘Stock’ ownership used to be thought as radical & risky: ‘Normal’ investors held bonds, only, due to Lack of Security, Lack of Access and Less Regulation.
‘Emerging Market Debt’ used to be tiny sliver of Debt Markets: Illiquid & Volatile Markets, Poor Historical Data Access, Regulatory Difficulties.
…and ‘Tulip’ Market Bubble: Small Participant Base, Lack of Asset Utility, and Irrational Speculation.
There is no Easy Way to make Millions Quickly
…but is there a Challenging way to make millions over the Medium to Long-term
by getting in early
on the next disruptive digital space
and it’s integration with Industry 4.0
…but do the Inefficient, Volatile and Developing markets of crypto offer opportunities to Gain a Competitive Advantage through A
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