In the past, Bitcoin was the only viable option. The crypto universe was divided into two parts: Bitcoin and everything else. But everything else involved investing our money in virtually fraudulent systems. Now the perception is different. Bitcoin is still the most famous cryptocurrency. However, for the greedy retailers, Bitcoin is already old and heavy. It’s arguably the most boring crypto asset in the field. Today the big wins lie elsewhere. Money comes out of Bitcoin to find the hottest items in hopes of bringing it home. Dogecoin, Shibacoin, Solana, Axie Infinity etc. What do we buy?
A few years ago it was practically blasphemous to speak of a speculative market. Money, apparently, wasn’t the main goal of any of this. It turned out to be a revolution, not a speculative market. It was a currency reform that would end fiat money, private banks, and central banks. Withdraw power from the state and pass it on to the people. We’re talking about the old libertarian discourse and the gold standard, but clad in novelty, digital age, cryptography and millennial spirit. Same shirt, different color. Many spoke of the separation of state and economy in order to promote a kind of libertarian utopia. What happened to it
The purchase of BTC was practically a referendum against the system. It wasn’t about the money. It was ideology that supposedly motivated us. The world, it seemed, was very badly managed and its collapse was inevitable. In fact, fiat money is a scam. On the one hand, there is inflation, which dilutes its value. And on the other hand, its constant manipulation by the repressive state. Hence, having fiat money is very dangerous. Bitcoin is special because of its limited supply, citizen character, and digital reality. Since no intermediaries are needed, this means that intermediaries such as banks and the state automatically step out of the picture.
According to this ideology, people would turn away from the dollar during the next crisis and flee into Bitcoin. After all, the limited supply of Bitcoin makes the currency a safe haven. We’re talking about a currency like gold, but better (because it’s digital and programmable). It’s bitcoin against everything. Now there is a detail. It’s Bitcoin, unique and unmatched, against anything. Its limited supply is very important. And bitcoin has to be used to buy things. In other words, Bitcoin must be used as a currency. The problem is that it is very difficult for a Citizen Coin to remain the only one that exists. Finally, we are talking about simple computer code. Anyone can clone the code. And to break away from the uniqueness that is so necessary for currency reform in hard currencies. What happened? There are now thousands of cryptocurrencies.
The traditional solution to the introduction of a single currency in a given jurisdiction is to use state force. In this case for a project that is mostly driven by libertarians, this imposition must be voluntary. The problem is, people don’t listen. The Bitcoin maximalists have tried to get their way with stubbornness, arrogance and anger, calling anything that is not Bitcoin a scam. But obviously it didn’t work. People keep doing what they want.
The above is a vision of things. You could say it’s the official narrative or the formal narrative. But there is another vision. This is not as popular a view as the official one, but it has the peculiarity that it fits the facts perfectly. I mean the pragmatic view of Bitcoin. It’s not the ideal bitcoin. It’s the real bitcoin. Bitcoin as a speculative asset. That is, not a liberating reform, but Wall Street on steroids. It’s not about the Bitcoiner as a militant of a pseudo-political cause, but about the Bitcoiner as a venture investor whose goal is to grow financially quickly and aggressively. As simple as that.
What are we buying on this line? The answer is simple: we buy everything. When we see the opportunity, we buy. This implies building an investment portfolio. It is perfectly sufficient to have Bitcoin, Altcoins and NFTs in our portfolio. But not crazy. It is very important to weigh the risks and rewards of each project. This is relevant if they are allocated an adequate amount of capital. The rule is that a smaller amount of capital is allocated to riskier projects, thus allocating the largest amount of capital to the safest assets.
In this case, Bitcoin would be the safest asset in the basket, followed by altcoins in the top 10, followed by altcoins not in the top 10, and then we could get into the universe of NFTs. The concept of risk is very complex. And they all have their own version. But, on this occasion, one could say that risk is synonymous with high volatility, low liquidity, little information, novelty, immaturity (level of emotion and type of investor) in its market and a project in a highly competitive sector. Bitcoin carries less risk than Ethereum. Ethereum carries less risk than Cardano. And Cardano is less risky than Shiba Inu. For example.
In general, most of the sureâ ???? they are more stable. In other words, less profitable. The riskier projects are potentially more profitable. But if we lose, we can lose even more. For this reason, it is advisable not to invest a lot of money in risky projects. Therefore, We are taking an asymmetrical risk. In the worst case, we lose little. And we win well at best. This is one way of managing risk. A project can go to 0. But it can also be increased 1000 times. For example, if we invest 1% of our capital in a project that goes to 0, we lose 1%. On the other hand, if we win 1000X, with our 1%, we are doing it without much risk. This is what asymmetric risk is all about.
Why are you here? To fight the Federal Reserve on Twitter? Or to make money? To save the world? Or grow financially? To troll the networks? Or put bread on the table? Are you a militant or an investor? Everyone knows their answers. The most important thing is to be clear in life. Otherwise things will be very confusing. To be a good investor, we have to be pragmatic. We need a cool head. Be objective. Ideologies are often harmful because the idealist usually sees what he wants to see. That means you don’t see reality. In addition, too much time is wasted fighting for the “cause” with others instead of spending that time looking for financial opportunities. Militant or Investor?