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Seven Stages of Crypto Investment

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muratkbesiroglu
@muratkbesiroglu
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While reviewing Binance Earn options on the Binance site yesterday, I thought of my evolution as a crypto investor over the past five years. And I tried to imagine how the preferences of a financially literate investor might change over time. Thus, an investment journey emerged in my mind.

Before I start listing the seven stages of crypto investing, I would like to enumerate the criteria.

  • Variety of cryptocurrencies invested
  • Diversity of investment medium
  • Variety of investment methods
  • Crypto trading frequency
  • Fundamental analysis know-how
  • Technical analysis information
  • Leverage usage
  • Dynamic portfolio management
  • Initial coin/farm offering participation
  • Decentralized Autonomous Organization(DAO) participation
  • Project development in the crypto space
  • Knowledge generation in the crypto space

After listing the criteria I would consider, I can now rank the maturity stages. I did not include investor behaviors such as chasing dog coins in anticipation of high returns. On the other hand, I am not suggesting that one of the following stages is better than the other or that they will necessarily occur in the order indicated.

  1. Bitcoin is bought from a centralized exchange and held for a long time. After all, we are talking about a financial asset whose value has doubled every year on average for the past 13 years.

  2. Investment is made in Ethereum as well as Bitcoin. Because the price of Ethereum, which was released in 2015, increases 3 times on average every year. However, when prices get too high, some of the coins are sold. New purchases are made during periods when prices are very low.

  3. Alternatives other than Bitcoin and Ethereum are also reviewed and coins such as Dot, BNB, Ada, Solana, Hive, etc which work with the Proof of Stake consensus algorithm, are staked. Thus, in addition to the increase in the value of the coins held, benefit from the return of the coins. New coins are added or removed from the portfolio from time to time, according to expectations about the direction of the market.

  4. Transactions made on DEFI platforms in order to benefit from the returns of liquidity pools. Investments are made in farms and pools on applications such as Pancakeswap, Uniswap, Apeswap. The number of coins invested has exceeded ten, and tracking the status of investments has become a task in itself. Technical analysis methods are learned for the right timing in trading. A lot of knowledge has been gained about the crypto market in general.

  5. Gained in-depth knowledge of specific blockchain ecosystems and developed good relationships with community members. Alongside an HODLed portfolio, stable coins and liquid coins are on standby to take advantage of emerging opportunities. From time to time, trading is made using leverage, and ICOs and IFOs are followed to capture attractive investment opportunities. Some small investments made are just to learn about the dynamics of the relevant market. Certain social media accounts are systematically followed for effective monitoring of the market. Knowledge of technical analysis is almost at the level of a professional trader. The token economy of invested cryptocurrencies is followed, and coins with high inflation are avoided.

  6. Crypto investing has now turned into a full-time job. Because more than fifty coins have been invested in many investment channels. Some of the experimental investments made created security problems and unexpected setbacks were experienced. Profitability is generally good, but it has been concluded that the portfolio has expanded beyond control. Portfolio and daily tasks are reviewed and unproductive ones are eliminated. The number of channels invested and coins owned is reduced. Day trading is made when an obvious opportunity appears. More time is devoted to critical issues such as monitoring general market dynamics.

  7. The crypto portfolio has reached a temporary equilibrium and is being fine-tuned. Considering what would change if only Bitcoin and Ethereum were bought and HODLed, it seems that there is no big difference. On the other hand, some projects involved on the occasion of crypto investment are doing well and lessons have been learned from mistakes. Activities such as participation in DAO voting, sharing information with ecosystem stakeholders, and participation in new project designs have been undertaken. Even though the return of the efforts has been received, there is a sadness of not being able to catch a project that provides a 100x return.

The journey I described may seem about knowledge, but I think that the determining factor in crypto investment is courage.

Thank you for reading.

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