The 2 types of crypto investors
PLUS: Ethereum validators are at ATHs
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In today's newsletter:
💡 The 2 types of crypto investors
📣 ParaFi Capital tokenizes $1 billion venture funding on AVAX
📈 Ethereum validators are at ATHs
Let’s dive in!
💡 Insight
The 2 types of crypto investors (not traders)
Crypto investing presents a remarkable opportunity for wealth creation, with potential returns that significantly outpace traditional markets.
Let's compare the historical performance:
📈 Ethereum (ETH): Averaging 100-200% annual returns since its launch
📈 Solana (SOL): Achieved over 1,000% growth in its peak year (2021)
📈 Bitcoin (BTC): Consistently delivering around 200% average annual returns over a decade
📉S&P 500: Historically averages 10-11% per year
These figures underscore why crypto is often called the investment opportunity of a generation.
However, to capitalize on this potential, it's crucial to adopt a strategy that aligns with your goals and risk tolerance.
Investing vs Trading
Pretty much everyone thinks prices will be way higher in 5-10 years.
But people will argue like crazy, totally sure they know what prices will do next week.
It's kind of silly because it's actually easier to guess what'll happen long-term than short-term.
Nevertheless, an inordinate amount of effort is expended on attempting to predict immediate market changes.
As a long-term investor, it's crucial not to let day traders' opinions sway your strategic decisions.
🚨 Remember:
most active traders are wrong most of the time
volatility is the price you pay for high returns
Now let's explore the two best approaches for crypto investing (not trading):
1. Long Term Investors (10+ years)
The primary focus for these investors is to capitalize on crypto's long-term growth trajectory over the next decade or more.
Rather than attempting to predict short-term market movements, they remain unfazed by day-to-day, week-to-week, or even month-to-month price swings.
Their strategy hinges on the broader trends of increasing crypto adoption and the sustained appreciation of their assets over time.
Recommended strategies:
2. Cycle Investors (1-4 years)
The primary focus for these investors is to capitalize on crypto narratives and market cycles.
Typically operating on a timeframe of 1-4 years, they seek to buy low during bear markets and sell high as bull runs peak.
While this strategy can lead to substantial gains, it requires a keen understanding of market dynamics, strong emotional discipline, and the ability to act decisively against prevailing sentiment.
Recommended strategies:
Remember, cryptocurrency investing offers unparalleled potential for wealth creation, but it comes with significant volatility. The key is to align your strategy with your risk tolerance and time horizon while maintaining discipline in your approach.
By focusing on the long-term potential of blockchain technology and resisting emotional decisions based on short-term fluctuations, you position yourself to capitalize on one of the most exciting financial opportunities of our time.
📣 News
ParaFi Capital tokenizes portion of $1 billion venture funding on Avalanche via Securitize
ParaFi Capital is tokenizing an interest in one of its venture funds on the Avalanche blockchain via the Securitize platform.
The tokenized fund opens ParaFi’s venture strategy to a new group of investors, selecting Avalanche for its EVM compatibility, fast transactions and low fees.
ParaFi is a prominent investor in the crypto industry that recently raised $120 million to buy stakes in other digital asset funds. It is also one of the largest investors in real-world asset tokenization projects and infrastructure.
📈 Signal
Ethereum validators are at ATHs
This means that the Ethereum network is becoming more decentralized every day.
Want more?
→ Check our guide on how to build a profitable ETH-based portfolio
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