The Rise Of DeFi & The Crypto Virtuoso

When The Market Gives You Lemons

One of the most critical aspects of Crypto is that it is a multifaceted industry rich in diversity, opportunity, and use cases. That’s why it is somewhat concerning that so many involved in the space are primarily engaged with the speculative aspects of investing and nothing else. So many have been impressed by XRP’s performance. However, it is still below its 2017 top, never mind the previous cycle top, which was lower than 2018.

Even gold has outperformed XRP since 2018, and that’s saying something. Until recently, gold was a nonperformer and had a prolonged period of stagnation. Whales have capitalized on the recent XRP price spike, causing the asset to trade significantly lower than its 2018 cycle top.

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In 2018, speculators hit XRP hard as MSM news outlets began advocating the asset as a prime investment. Yes, the SEC debacle has been the primary culprit regarding the suppression of the price of XRP. After all, who wants to invest in an asset embattled with the SEC and facing high-level probing and scrutiny? Many XRP investors have had to wait almost a decade and are still experiencing a floating loss.

Of course, the wisest move would have been to continue dollar-cost averaging during cycle bottoms. Investors who appropriated this wisdom are the only ones in a beneficial position. New investors will also form part of this group. Speculative decisions can turn against you. They can cost you dearly. However, with the enormous level of diversification regarding opportunities, it is not necessary.

The Knowledgeable & Skilled Crypto Enthusiast

Speculative Crypto positions need only take up a fraction of one’s Crypto portfolio, and many are beginning to realize this. Airdrop farming, DePIN mining, DeFi, and other WEB3 ideas create copious amounts of income and investment capital for those who have awakened to Crypto’s potential and actual essence. Strictly speaking, DeFi involves liquidity mining AMMs and yield generation. However, any financial activity occurring in WEB3 is also DeFi in theory.

Even staking is an expression of decentralized finance. Many smart Crypto enthusiasts are now utilizing WEB3 and DeFi to acquire investment capital, ultimately eliminating the risk dynamic of investing. Capital acquired at zero cost faces zero chance of risk. On the other hand, capital acquired by labor and human effort is another story. I have addressed the idea of WEB3-based ideas and investments serving one another and ultimately a master plan.

When a speculative investment is at the heart of your master plan, you are at the wrong end of the spectrum. This shift in perspective is required to begin harnessing the intelligence of WEB3 and blockchain technology. The “Crypto Virtuoso” has not only realized this but has also actively set in motion a WEB3 machine. Speculative investments now only account for a fraction of his portfolio.

Everything is speculative. I am referring to price-related returns. In other words, a stagnant price simultaneously produces zero returns. There might be risks involved with DeFi protocols and other WEB3-based ideas, but they produce returns in real time. That makes all the difference. Take a simple concept such as staking for example. This would have been a far superior move to investing in XRP.

Imagine for a moment staking rewards compounded since 2018 together with price appreciation. Furthermore, XRP is currently valued below its 2018 valuation, making it even more profound as an investment strategy. I do not hate XRP; I was once an XRP investor. However, the risk/reward ratio moved outside of my confines post-2018. Most investors who ignore fundamentals and indicators such as risk/reward ratios are primarily emotional investors.

However, it can still work out for them, but it requires abandoning basic investment principles. In standard terms, we refer to such activity as gambling. Such decisions should only account for a minority of any serious Crypto investor’s portfolio.

Final Thoughts

Moving beyond speculation is not a new topic on this blog. However, it’s a mindset that must be embraced to eat at the crypto table. Speculation is merely the starter course. Those who have not endeavored beyond this point are missing out. DePIN is a good starting point for the adventurous because it requires zero capital in certain instances. With knowledge and experience, participants can venture into DeFi protocols.

Adventurous exploration will lead to new and exciting opportunities within the space, ultimately expanding one’s possibilities and increasing income generation. Crypto is so much more than speculation. However, many are plagued by a one-track mind. The maturation of WEB3 will, however, have a profound impact on the perspective of the average Crypto enthusiast. However, the transition remains somewhat constrained. See you next time!

Disclaimer

First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.

This article was first published on Sapphire Crypto.

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