Crypto is a place of unprecedented equality, transparency, and opportunity. It is a land in which every wallet is treated equally and where race, gender, and orientation are immaterial. Crypto is fertile soil, a level playing field for a game that everyone is invited to play.
But it also has a darker side, for where there is money, there is opportunity and opportunists in equal measure. It may be impossible to eradicate the latter fully, but that doesn’t mean crypto can’t be made safer, fairer, and ultimately more profitable for all. For this to happen, industry figures, from exchanges to KOLs, need to embrace more responsible practices in 2024.
Crypto rises and falls on hype. From the breathless proclamations of YouTubers shilling the “next 100x” to blockchains promising to “transform the layer1 landscape,” the hype machine never rests. This enthusiasm is contagious, but it’s also exhausting. Instead of focusing on fundamentals, influencers urge users to hop from one token and chain to the next, frantically buying and selling in search of the gem that will make them rich.
In an industry that is built on money, this focus on price is understandable. Infrastructure improvements, in comparison, are hard to visualize and harder still to sell; DVT might be valuable, but it’s unlikely to excite anyone other than hardcore Ethereum validators. This is why liquid staking tokens receive more attention than liquid staking technology and why meme coins attract more volume than tokens with genuine utility.
How do we fix this? Fundamental analysis must stop being a dirty word in crypto, and investors must be able to access the educational tools and guides that will help them learn how to read between the lines of project roadmaps, whitepapers, and marketing.
Fortunately, traditional-style ways of valuing companies using ratios can be found in crypto. For example, Daily Active Users/Market Capitalization is a ratio that shows how much each user is “worth” on the blockchain. In some cases, each user is worth hundreds of millions of dollars in market cap.
Just this information alone empowers people to question the marketing narrative and pose the question: is this project attracting the users it needs to be successful? We have amassed 20 such metrics in our Crypto Analysis Toolkit, which is available for free — along with a handy guide.
It’s up to each individual to take personal responsibility for their digital assets, which is, after all, what crypto is about: self-sovereignty, self-custody, and self-sufficiency. In practice, this comes down to enacting better investment analysis, making personal decisions, and not falling prey to FOMO.
Using these free tools allows users to develop frameworks and “walk the talk,” developing that all-important experiential knowledge. I mean, there’s no tougher lesson in risk management than seeing a bad investment go to zero.
So, use the toolkit to make cool-headed decisions, this means not blindly copying the altcoins shilled by influencers or the trading setups shared by crypto OGs. For some people, copy trading works, and it can take you far in crypto, but learning through exercising your powers of reason will sharpen your skills and allow you to build a robust portfolio, which allows you to be more comfortable with trading a small portion of your net worth.
As Warren Buffett put it, the stock market is a device to transfer money from the impatient to the patient. The surest way to achieve your financial goals is to stay in the game for as long as possible. You don’t have to make it all in a single trade. You don’t need to get rich overnight. Bitcoin isn’t going anywhere. Crypto isn’t going anywhere.
So long as you’ve got skin in the game, you’re able to keep playing the game. In 2024, the entire industry needs to adopt more responsible trading practices. For those in a position of influence, doing so will improve reputation and build trust, while for those starting, taking on less risk is the key to portfolio growth.
Bitcoin whales made their money by doing their research into a technology that was ignored by the majority and then exercising patience for years on end. There are times to act quickly in crypto to take advantage of opportunities. But most of the time, there’s more money to be made from watching, waiting, and allowing market forces to do their thing.
Author bio:
Hao Yang is the Global head of derivatives and financial product at Bybit. He is responsible for building one of the most sophisticated options platforms in the industry, designed to provide users with a seamless trading experience. Today, he heads up a team of passionate builders working with the latest trading technologies, from AI bots and structured products, to enhancing Unified trading accounts, and new innovation on crypto-native derivatives. Hao is passionate about building a new, decentralized financial system.