This is a brief update on the state of the current crypto market - what's new, what I'm focusing on, and where I think it's going.
I've been following the rise of bitcoin since 2013, so I have a decent historical perspective on where it's come from. And it's now my biggest ever, highest conviction bet, so I'm closely monitoring where it's going.
1. My Crypto Portfolio Update
I'm on track for a healthy 10x this year. I haven't sold any of my positions, but I am close to starting to do so.
- I stopped buying BTC at $10k. (too early).
- I bought Ethereum as recently as $1500.
I don't see myself buying any more as the market continues to heat up. However, if I had no crypto exposure, I would still be buying some with a 3-5 year time horizon and understanding the risks of getting into an already heated market.
In the near future I'll be sharing a more detailed breakdown of my crypto portfolio as well as my entry & exit strategies. Be sure to subscribe to my Youtube channel and sign up for my newsletter to be notified when I release this.
2. Earn Interest On Your Crypto
I was originally super skeptical of businesses that promise yield generation through crypto, but after understanding how they work better, I'm much more confident in the process & risks involved.
I've allocated some of my holdings to earn up to 12.5% p.a. passively on the following platforms:
- Ledn.io - the best to earn 12.5% p.a. on USDC stablecoins (use this link for a $25 sign up bonus)
- Celsius network (use this link for a $40 sign up bonus)
- Blockfi (use this link for a $10 sign up bonus)
I highly recommend if you have spare US dollars sitting in a savings account, consider converting them to USDC stablecoins and earning 12.5% APR interest with ledn.io. These interest rates are abnormally high only because the traditional banks can't move fast enough to provide funding to the crypto sector. These rates will come down as the big guys figure out what's going on and get in on the game.
Above all, consider risk management: diversify, don't put all your eggs in one basket.
3. Borrow Against Your Crypto
Pro-tip: if you need cashflow, DON'T sell your crypto, store it with Celsius and get a crypto-backed loan at 25% LVR for 1% APR (!!). Loan terms range from 6 months to multiple years.
A 25% LVR loan means if you store $100,000 worth of crypto as collateral, you can take out a $25,000 loan. Easily enough to meet most cashflow requirements.
This is another thing I was skeptical of at first, but the lending business checks out. The interest rate is unbeatable. Given how much your crypto will probably appreciate in the next 12 months, this is a no brainer.
4. A Long Term Perspective - My Thoughts
I'm highly confident that the crypto space is here to stay for the long term... although probably so too are the volatile market swings. Pandora's box is opening. Ethereum, DeFi, and NFTs are the most interesting things to learn about if you want to understand what crypto is likely to disrupt in the eventual longterm.
Bitcoin is pretty obvious to understand now, it is disrupting how value is stored.
Ethereum & specifically DeFi will disrupt banks & financial institutions. Basically, Ethereum acts as a global, decentralized computer and access to programmable contracts that isn't controllable by any one company. Apps can be built on it that are also decentralized and not owned by any one company.
This can be kind of confusing at first, but we are starting to see game-changing uses cases beginning to take shape. Here are two random examples:
- Dhedge - decentralized hedge fund protocol. Anyone on the internet can create their own investment fund with a public record, and anyone else on the internet can choose to invest their money in any of those funds. The protocol is non-custodial, which means investment managers can't run away with their clients funds.
- Uniswap - decentralized exchange. Runs by itself. Anyone can participate in governance of the protocol by owning UNI tokens and anyone can be a market-maker by providing liquidity. All profit generated from exchange fees is re-distributed back to users who provide liquidity.
Why is this good? Because most of the economic rent in these systems just feeds straight back to the users, instead of fatcat bankers & bloated institutions acting as gate keepers.
So, my 10 year view is that the crypto ecosystem grows exponentially into the trillions, a lot of value is sucked from traditional financial institutions, and everyday users are better off as a result.
It's important to keep in mind that every single application/crypto (excluding bitcoin) is still extremely risky since it's unclear which will be the long-term winning applications. Hence I think it makes a lot of sense to diversify across the space and only with money you can afford to lose.
5. Actions To Take Now
Actions I am taking to build generational wealth right now:
Hodl BTC. Ideally you bought some based on my call in August 2020 @ $10k, rather than now at $50k+.
Invest in a diverse range of altcoins as speculative medium term plays, betting on a wall of money moving into the space in the long-long-term, while admitting no-one really knows which specific real world applications will succeed and which will fail. I will sell almost all of my altcoins during this market cycle, I won't sell all of my bitcoin.
Earn attractive interest (5-7%) on your assets through staking on exchanges & lending platforms (Celsius, Blockfi, etc) as described above. Move spare dollars to USDC stablecoin to generate high returns of 10-12%.
I wholeheartedly believe in the exponential growth power of learning the right skills & knowledge. I've seen it directly correlate to the exponential growth of my income & net worth over the past few years.
So the action is to dive in and learn about the crypto space. Learn: economics, finance, cryptography, game theory, investment theory, history, software. Then when you have the skills & knowledge, build a business around it.
Want a business idea? Here's one. Go figure out how to buy, securely store & generate yield from crypto assets, and teach wealthy investors to do exactly this. From experience, I can tell you that there are gaping holes in the provision of quality information/services, and the demand is going up.
If you're an entrepreneur, high growth sectors are the best to be in. The deck is stacked in your favor. It's much easier to take a share in that rapid growth than it is to create growth in a stagnant industry. All you have to do is go where the flow is. Imagine there's a waterfall. If you walk through the waterfall, you're going to get wet.
Well, I think there's a waterfall ahead.
My belief is that by spending the time now to understand crypto, that you will be rewarded with abundant opportunities for lucrative investment returns and profitable business ideas for the next 5-10 years.
And finally, the biggest reason why I'm so excited about all of this is surprisingly, MORAL.
Today with crypto, the little guy genuinely has opportunities to participate in a nascent industry before big institutions are able to. This is literally the reason why you can earn 12% lending USD stablecoins to risk-free arbitragers in the crypto markets, through Blockfi or Celsius. Their traditional banking partners can't move fast enough to approve the funding they need.
This is the OPPOSITE of how it normally works.
All you have to do to beat the big guys is get smart about it, quickly.
PS - HOW DOES THIS ALL FIT WITH AMAZON?
For the record, ecommerce is also a high growth sector. So which should you focus your efforts, capital & attention on?
Personally I see Amazon FBA as the greater generator of cashflow, and crypto as the greater investment opportunity, more innovative space *with more potential good for society*, and more attractive for long term business opportunities.