The Distinctive Investment Approach That Is Inherent To Highly Successful Crypto Investors
How On Earth?
How is it that so many Crypto investors can enjoy the bull market dynamic, and yet still experience loss? Even for those investors who are able to enjoy modest gains, it’s certainly not a life-changing investment. There are various reasons for this. One of these reasons is poor execution. This is usually linked to a lack of knowledge, experience, and risk management. Yes, even in a bull market, risk management is imperative.
One could argue that it is even more important during a bull market. What’s the point of being exposed to life-changing gains, and yet never realizing those gains? This is, however, why many investors experience a bull market, and yet somehow end up in a predicament of loss. What I am wanting to address in this article is a level of exceptional success, as opposed to modest, or benchmark returns.
Many TradFi investors are known to produce results that outperform certain indexes, such as the S&P. However, to be honest, it’s not that difficult a task to accomplish. If you have experience regarding portfolio construction and risk management, it’s relatively achievable. So, how do super successful Crypto investors outperform the average Crypto investor, as well as the successful ones?
Before I continue I would just like to provide a little clarity. It is important to keep in mind that we are looking at percentage gains and not dollar valuations. For instance, many Crypto YouTubers, and the like, often appear successful. However, this is more often than not a rather deceptive scenario. Many of these individuals earn ridiculous amounts of Crypto and fiat via ad revenue, promotions, and other methods of monetization.
Much of this capital is then invested in blue chip Crypto assets, and so, their valuations rise significantly, but this is only because they had copious amounts of money to invest in the first place. Essentially, many are only enjoying 10X or even 20X returns. This is nothing to write home about, and yet many investors are still endeavoring to achieve these levels of profitability. This is a clear sign to consider re-evaluation.
However, that’s a topic for another day. Crypto investors who achieve enormous gains (percentage) are usually those with an edge. It’s almost as if they can look into the future. They are not in step with the market, they are ahead of it. Often their investment decisions appear foolish to bystanders. However, as time matures, wisdom begins to ooze out of the fruits of their decisions.
A Pioneering Mind
Essentially, if you want to experience success beyond BTC, and the altcoin benchmark, you have to identify the trends of tomorrow. Not only that, but you have to diversify and structure your investment decisions within the confines of this perspective. Look, let’s be honest, BTC only achieved a 3X return on its previous high during 2021. Covid provided an enormous opportunity for new investors.
However, investors who got stuck on the wrong side of the market in 2018 were only able to enjoy relatively modest gains. Provided, they didn’t repeat the same mistake, which, to be honest, is unlikely. An impoverished skill set can only go so far. If investors in this predicament choose not to work on their skill set, they are unfortunately unable to produce a different result. The same is true of a construction builder.
A guy with a few nails and a hammer is rather limited in what he can produce. Investors who outperform are those who learn from past mistakes, and then look into the portal of the future. This is done by objectively following the breadcrumbs. Too many investors are too emotional. In many instances, it has become clear that their particular moonshot is not going to achieve what they had initially hoped.
A false sense of loyalty, as well as an inability to accept correction, and make adjustments, keeps them at a disadvantage. Certain micro-caps have produced returns in a matter of weeks that match, or even outperform, what many investors are hoping to experience in a bull market in relation to their altcoin of choice. It’s this inability to adjust, or even diversify that keeps the majority of investors from outperforming the market.
Final Thoughts
Successful investors are often pioneering, unafraid of change, and ahead of the market. If you are in step with the market, you can only expect benchmark returns. A rather obvious outcome, and yet the majority of investors are unable to entertain this level of deduction. Doing what everyone else is doing will yield similar results to what everyone else is experiencing. In other words, the benchmark.
Unless you break away on a unique path of research and allocation, don’t expect anything other than benchmark returns. It’s a harsh reality, and yet nothing can change it. Sometimes a more predominant project experiences a significant event during a bull market that gives it a bit of a boost. However, it’s random and isolated. Identifying the trends and projects of tomorrow is where alpha lies.
This lull period before the commencement of market appreciation is a great time to begin delving deeper. This is an excellent opportunity for research and re-evaluation—all the best, as you navigate this ever-changing market. See you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
