There is so much upside in Crypto, WITHOUT needing to take all the risk of getting “REKT”
So why do people still keep losing?
In this article we will cover 5 things to look for in your own life that when addressed can help significantly in your journey through the cryptoverse.
Underpinnings
- Intractable (unsolvable problems)
- FOMO & Urgency
- Micro-strategy Diametrically Opposed To Macro Belief (Violating Own Economic & Personal Principles)
- Frequency of Exposure
- Asymmetric Risk (To The Wrong Side)
If you can identify these and hedge against them you WILL make a lot of money in Crypto.
When you have explosive upside you don’t need everything to go right.
You just don’t need to blow yourself up in the process.
The Intractable Problem
What’s the best strategy in Crypto?
I have the answer to this.
You Ready?
Are you trying to pay off your wedding in 1.5 years?
Are you trying to pay off your house in 30 years?
2 vastly different approaches…
The intractable problem is… How do I get more?
The solvable problem is how do i get an extra 55k in 7 months?
Now we can reverse engineer to solve the problem because we have defined variables.
With an UNSOLVABLE problem you don’t know how much risk to take, how much more you need, what numbers you even need to pull so you just chase more.
The Certainty App — Get your free account.
This is the single most important tool in Wealth Acceleration in our opinion. Period.
This app will turn your intractable problem into a solvable one.
FOMO and Urgency
You are still early…
Crypto is still new.
There is so much upside in Crypto (well as of 2021, hello future me!)
Did you miss a presale launch?
Guess what…
There will be 15 more coins launching today and 100 more during the week.
So many opportunities each and every day.
AND if you turn your intractable problem into a solvable one… Now you can figure out what matters and what doesn’t. Helping you to reduce that FOMO.
If you find yourself rushing… just Slow Down
Restraint.
As long as you stay in the game you win…How do you knock yourself out? FOMO into emotional decisions.
Micro-strategy Versus Macro-strategy
This concept is often violated.
Many traders will get rekt trying to time the sells on tops and buy the bottoms. Majority will have been better off dollar cost averaging and just holding.
Ex) If you are a believer in BTC selling BTC to try and gain more is a micro strategy that is diametrically(directly) opposing your Macro belief.
What about “so and so” they made millions off trading…Yes, I am aware there are traders who do very very well trading BTC (or other assets). This is a small minority of traders, which is why a market exists… for those traders to take money away from the MAJORITY of traders (who try and time the market but don’t have the expertise or skillsets).
Real Life Example
“I wish I had more time… then I’d spend more of it with my kids.”
Then every time you have more time you fill it up with more work… hoping that putting more work into your schedule will open up more time for you to spend with your kids later.
Frequency Of Exposure
Things that feel bad hurt more than things that feel good.
Ex) Losing $50 hurts more than if you were to gain $50
Staring at charts everyday… even at charts that go up 30% every day have people panicking because they have no idea how to throttle their frequency of exposure.
A chart that goes up 50%, goes down 50%, goes up 25%, goes down 25%. This will end up net neutral… but the emotions that comes from watching a chart that drops 50% or down 25% will have you reeling.
Not to mention the decisions that may come from that emotional vulnerability state.
Oh shit… this is a rug pull I gotta get my money out.
I’m gonna sell out at the bottom before it keeps going…
Frequency of exposure → Urgency → Micro-strategy opposed to Macro Belief → Good game…REKT.
Reality- Figure out how long you plan on holding something after doing the research behind the team, the token, etc.
Then create the system that helps you to achieve those goals.
Ex) An investor is a believer in $GUARD long term.
They have set aside the amount they can invest in at this time from a monthly perspective ($1,000) and have broken it up into amounts based on the frequency of buys they want to put in.
4 buys- 1 x a week on Fridays ($250) each buy.
This is a system setup that will help them accumulate more $GUARD (their macro belief). The Dollar Cost Average (DCA) will mean that they may catch the tops of some buys and they may catch some bottoms, but it will all equal out in the end & they will have $1000 more $GUARD at the end of the month without having to stare at the charts every single day waiting for the “right” moment to buy. Less anxiety, less day to day stress and more time being spent on the things that matter to them. This is of course assuming the project you have chosen is reliable and you have a long time preference.
Asymmetric Risk To The Wrong Side
People take bets where they can 100x their money on the upside… but the downside is it can go to 0.
Upside=100x — Downside is infinity. See the problem?
We want the downside to be far less than the potential upside.
You get a hot tip on a coin… check the chart and all you see is GREEN
God damn FOMO gotta put some in right now it’s gonna keep going up gonna miss my 100x.
If you put .1 BNB in that’s $47, with 100x gains thats $4700. Downside $47.
If you put in 10 BNB thats $4780 with 100x gains thats $478,000 awesome right? Downside is $4780.
Which one hurts more to lose?
Well if you didn’t think the 2nd option… and you put it into this. Good luck it’s a honeypot you just lost $4780 with no upside.
Let’s Play A Game
First, would you take the following bet? $10 to enter. $10,000 prize. 83% chance of winning.
You in?
Basic math/probability makes this a no-brainer for most. But basic math might be the wrong math. Are you SURE you would play this game/take this bet?
The game is Russian Russian Roulette.
No brainer, indeed. “Data-driven” people chasing upside often do not account for complete ruin.
If complete ruin is an option, the asymmetry is NEVER to the upside. No amount of upside outweighs losing the things that matter most
Sometimes we win, sometimes we lose.
Asymmetry to the upside is only SMART when complete ruin is not a realistic outcome. Stop spending more than you can lose. It’s NEVER worth it.
We all will fall into these underpinnings at some point. The more that you are aware of these however will allow you to setup your systems to start to tackle these biases.
Resources
If you want some additional reading material on these concepts you can check out this book.