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Why Cryptocurrency Investing is a Full-time Job

Arkansas, US, 3rd Feb 2022, ZEXPRWIREIn one of the crypto coin Telegram groups, a news article with a similar title exists and it challenges with getting a handle on crypto currency holding which is that it demands time, sometimes a lot of time, and attention.

The biggest challenge facing the growth of crypto currency is that it has a steep learning curve, especially decentralized finance (DeFi). Beginners do even know where to begin much of the time. The cryptocosm is, by its very nature, decentralized and while that is huge benefit for freedom of choice and freedom from control the sector is also very fragmented. This does not help. To worsen matters for the beginner (the crypto newbie or crypto curious) who is simply trying to learn, often they find themselves at the mercy of crypto influencers who possess only a tiny bit more knowledge than their audience. Not all influencers suffer from this dearth of knowledge, but  more crypto influencers coming out of the woodwork that have little or no experience or knowledge and seem to only want to exist to promote for the rewards instead of educating.

Crypto marketers, seek methods to incentivize engagement and personal promotion of our currency by offering coins and tokens (subjective value) as payment for your time and effort to promote and recommend investing. Airdrops, contests and giveaways are a few of those incentive techniques and are also universally employed by ICO’s. As the crypto enthusiast’s knowledge and confidence grow, they will likely participate in yield farming or staking in liquidity pools and actively hunt for new strategies and platforms. The returns are often higher with these DeFi tools and investing tends to focus on holding currency rather than speculative trading.

Time to Learn 

Briefly, examine the time commitment involved with two common approaches to building a cryptocurrency portfolio:

Approach 1– Accumulate coins, tokens and NFTs wherever you can find them for little or no cost, by participating in promotional campaigns. This is somewhat akin to picking up mushrooms in the forest, albeit every mushroom. The risk is that not every mushroom is valuable (edible), some are poisonous, and if you can’t tell the difference, you risk spoiling your whole recipe. When you accumulate every free coin offered, you may have some significant holdings, but you really don’t know which ones will be valuable in the future.

However, the risk is small if there are free (well, nothing is really “free”, as expectations are created with airdrops and other giveaways that you will invest personal time to promote the offering). Chasing down these opportunities takes your time, which has a cost (opportunity cost), namely the cost of foregoing other opportunities in favor of pursuing coin drops. However, if you are comfortable with the opportunity costs involved then this approach can be effective strategy if you are willing to work on it on a fulltime basis. Anything less might not produce the results you were expecting. This is great approach for the crypto newbie or the crypto curious, as getting things for “free” is fun. This helps grow interest and desire for participation in markets, but it also can perform a useful educational function in a low-risk environment. If you make an intentional decision to accumulate coins you force yourself to learn about wallets, exchanges, and decentralized finance. Learning by doing (applied learning) is a good way to flatten the steep learning curve involved with blockchain currencies.

Approach 2– Actively research projects and understand their capabilities to create use cases through an ecosystem. This clearly takes more time to do well. Every week new whitepapers come out promoting projects, some will be sustainable, and some will fail.

The cryptocosm has had its share of problems over the past 4 years. Rug pulls by developers, whales wiping out liquidity, and bots executing downward trading spirals are few of those problems. I probably read about 4 to 5 whitepapers a week on everything from DAOs, DEXes, charitable fundraising schemes and innovative use cases for NFT’s. One of the most difficult things to detect with new projects is how to determine if the developer team can execute the growth plan past the honeymoon period of the first public sale. However, we are seeing projects to begin to market the competencies by doxing their teams. For example, one of the few projects that has a doxed team is United Farmers X (unitedfarmers.finance) symbol UFX. The team has achieved substantial goals towards becoming a DAO in the last 6 months and are on the cusp of expanding the ecosystem for token uses. This transparency can give the investor confidence and trust that team is going to be there for the long term. Additionally, as investors, we want to see that the team has the competencies and understanding to establish and maintain an ecosystem for their coin, as that’s really what is going to contribute to longer term value appreciation.

When you look at all the reading and analysis involved, this route is also very time intensive, but it mirrors the traditional investing approach of carrying out due diligence. This is part of cutting through the hype. However, once you have accumulated some coins that have seen significant appreciation using the first approach discussed, perhaps it is a good time to take a bit of your new windfall and invest intentionally in a growth project.

Learn Quickly, Execute Quickly 

Nothing of what the discussion above  is intended to be investment advice. Its a mere examining of  the time commitment involved with two common approaches (not the only approaches, by the way) of accumulating and holding crypto currency.

Both approaches require a substantial amount of time to learn terms, practices, platforms, and techniques; and a dedicated time commitment to uncovering new opportunities and emerging trends. On the flip side, merely “dabbling” in crypto is probably not going to pay off. It might be a method of slow learning, but the markets require you to ‘learn quickly and execute quickly” if you want to see success.

Some of the terms used in this article may be unfamiliar, please visit unitedfarmers.finance’s glossary page for more detailed explanations.

About the Author

 Rob Eirich is the CMO and Chief Strategist for The Coach Harp Organization, which provides marketing growth services to Initial Coin Offerings and Sports Influencers.

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