Before diving deep into how cryptography and blockchain technology have taken the (financial) world by storm, let’s make one thing very clear: Investments (of any kind) are risky.
Investments in crypto technology are highly risky and you should only put on the table what you’re ok to lose.
However, we are drilled to like danger and if we understand and play that “golden rush” as safely as possible, it can be very exciting and extremely profitable.
1. Miners vs. Merchants During The Golden Rush
Have you ever heard of Levi Strauss? You probably own or owned at least one pair of Levi’s jeans in your life, right?
If that’s true, that’s you and a billion other people so it’s no wonder that Levi’s is one of the most recognizable jeans brands in an industry of $56 billion sales a year. (which at the moment by the way, is almost 3 times less than the total crypto market capital).
But let me tell you exactly how Levi’s has anything to do with cryptography. No, they aren’t launching an ICO, at least to our knowledge but if we look into how the brand and the man behind it got started, it will make perfect sense.
During the California Gold Rush in the second part of the 1800’s, it wasn’t the gold and the mining that made people (filthy) rich. It was “entrepreneurs” like Levi Strauss or Sam Brannan that made a big buck through selling supplies and services to the gold dreamers.
Trading was the main channel of wealth during those exciting times and it worked so well that the legacy and power are still very much relevant and profitable 200 years later.
If you agree that history’s a good teacher, you should have an idea by now of where your money should be in these exciting times.
2. Investing in cryptocurrency and ICO’s for the disruptive capabilities.
We see blockchain technology as a tremendous opportunity for freedom and choice. You don’t have to be a libertarian to want an alternative or a backup to the banking system.
3. 3 investments that would have brought you up to $38 million
If you invested $500 in Bitcoin in July 2010 you would have $38 million today.
If you invested $500 in Ethereum in July 2014 you would have $450,000 today.
If you invested $500 in Stratis in July 2016 you would have $300,000 today.
Can you really afford to miss the next big opportunity?
4. The whale effect
As we emphasized in the beginning of the article, crypto investments are highly risky due to extremely volatile markets.
However, there’s one thing you can do to mitigate your risk is to be part of a group that works as a bigger investment organism.
The motivation for buying in as a high risk investment stays in the ability to generate a higher return than one can hope to have on their own. Cryptocurrencies and blockchain related projects represent an amazing growth opportunity, especially given how incipient this industry still is.
While most of these groups are what’s called “pump and dumpers” and are mostly frowned upon by the community, the reality is that these DO make money. Question is for whom?
The alternative is to find an organized group that’s focused on bringing value to the market and have enough purchase power to hold a profitable stake into a coin or project whilst taking care of their members at the same time.
5. FOMO and FUD
The fear of missing out has a great effect on people and how they invest and trade. Its buddy, “fear, uncertainty and doubt” (FUD in short) have the power to wipe out $40 billion market cap in 12 hours, as it happened most recently with the latest China rulings and bans.
People trade with emotions and left alone they are very likely to get carried away in losing games.
If we look back at the Californian Golden Rush, it’s people who got carried away and sold it all out to go dig gold out of dirt that had the most to lose at the end of the day.
The real source of wealth is the rush of people. This can be played on to be profitable for those who take a step back and asses the big picture.
Remember though, when winter comes the lone wolf dies but the pack survives.