Want To WIN In Web3? Here Are 5 Expert-Vetted Rules For Success
I’ve been obsessed with crypto for the past three years. I mean, seriously, it’s taken up a ridiculous amount of my time. I can’t get enough of the technology, the markets, the culture, the philosophy, and the politics behind it all.
Web3 feels like you’re playing a massive multiplayer online money game. Every day magic internet money is flying around, up for grabs, and the dopamine pulls you in.
I’ve read countless blog posts and technical white papers, traded coins and NFTs, made some money and lost a lot of it, watched hundreds of videos (and fried my brain cells), and scrolled through Discord and LinkedIn for what seems like an eternity.
Now, I want to share some of the lessons I’ve learned about the world of crypto. My goal is to organize my own thoughts and share my knowledge with others.
(get ready — because this is one of those rare gems on the Internet.)
Here’s the breakdown.
Rule #1: The Main Way to Make Money is to be Early
The best investors take risks on things that seem crazy at first, but eventually become mainstream. Look at Bitcoin, Ethereum, DeFi, NFTs, play-to-earn games, meme coins (yes, even the food and dog varieties), and DAOs. These were all once seen as strange and unlikely to succeed, but they did.
The challenge is to identify the next big thing and decide where to invest. If there’s a new trend that makes some sense and there are obstacles to overcome in order to invest in it, then that rule inherently increases the potential for a return on investment.
Rule #2: Let the Dust Settle after Major Events
Be wary of the “house wealth effect.” Basically, you don’t view money you’ve recently earned the same way as money you’ve earned in the past. It’s best to take a step back and relax. Let your money sit in stablecoins for a week and then make decisions when you have a clear head.
This rule applies when things go wrong too. If you lose a lot of money, it’s tempting to try and make it all back through risky trading, leveraging, or investing in risky coins.
However, from my experience, it’s best to take a break, reflect on what happened, and reevaluate your strategy.
Rule #3: Every Token is a Social Token
Simply put, all tokens are a reflection of human attention. Their prices rise and fall based on how many people are interested in a project at any given time. This makes crypto speculation a social activity. Until there is solid evidence that the situation has changed, we are essentially trading derivatives of people’s attention, whether in the form of coins or NFTs.
One week, Solana may be the talk of the town, but the next week, it’s another alt L1 blockchain. One day, the internet is buzzing about Bored Ape Yacht Club, and the next day, it’s the Moonbirds NFT mint. As a result, we should evaluate tokens based on the attention they attract and how much more attention they can attract.
Rule #4: Due Diligence is a MUST
In the world of crypto, everyone is trying to sell you something and get you to invest in their projects. Instead of blindly following advice and getting burned, take some time to think for yourself. Form your own opinions and make your own decisions.
Before making any trades, ask yourself some questions. What’s the backstory of this token? Who are the key players? Who’s buying at higher prices and why? If you don’t have good answers to these questions, you won’t have any conviction when the prices move, whether up or down.
Rule #5: Systems > Emotions
Without rules, trading in the market can be like riding a rollercoaster of emotions. Fear, greed, and other emotions can lead you to make decisions that you’ll regret later on.
That’s why it’s important to create rules for yourself when participating in the market. Think about what you’re buying, why you’re buying it, how much you’re willing to invest, over what time frame, and when you’ll take profits or cut losses.
These constraints will help you manage your risk and turn the unpredictable game of trading into a finite game with a set of rules. Remember, emotions are great for art but can be disastrous for trading.
The Game Never Ends
Your past experiences with the markets don’t determine your future success.
There are always new opportunities, no matter how badly you’ve done in the past. And guess what? The online crypto casino never closes. It’s always there, ready and waiting for you. So don’t be afraid to take a break and step away for a while.
When you come back, the chaos will still be there, waiting for you to dive back in.