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It looks like it’s going to rise, so I’ll buy it because it’s underpriced. The word invest and the word speculate are very close yet very different. One needs to be aware that when the button “Buy” is clicked, sometimes it’s speculation and not investment in this crypto world. In a nutshell, investment is an educated decision that, if done correctly, should almost always lead to a positive outcome.
Speculation, on the other hand, has no guarantee as it’s more gambling-based.
Many of the crypto and the NFT community are unaware of the difference. A few people in this new world have been lucky to succeed in their speculation. Some of those crypto enthusiasts were not even aware that what they were doing was actually speculation and not investment.
I’m Al, a business consultant in Zurich, Switzerland. I’m a specialist in blockchain and crypto initiatives. I do not extremely support either the stock market, bonds, cryptocurrency, or NFT investment as a single “all-in” investment. The word investment carries a risk in all cases, which one has to be aware of. At this stage, investing in stocks could be perfect. Tomorrow, it might be crypto. Only time would truly tell.
Being involved deeply in the crypto and NFT world, I get inquiries from lots of people in my network about NFT and crypto investing. Here’s what I immediately inform them with:
- You must be aware that this is a new market. Not a long time ago, the internet was fairly new as well. A large chunk of companies then failed; only a few actually survived. However, this is not necessarily the same. We’ve only had the internet as a sample in our study. There’s nothing before that that could validate the long-term survival of either the cryptocurrency market or the NFT one.
- Suppose you’re entering this market to make money quickly. I’d recommend slowing down and reading Benjamin Graham’s The Intelligent Investor.
- If you’re entering this market because you see potential in the blockchain technology and its integration with the NFT, and the cryptocurrency, then do more research on the company or crypto project you’re investing in. It stands to reason that if most of these new companies fail, some blockchain companies will survive and will heavily thrive.
The book, The Intelligent Investor, is a brilliant read to any investor who’s interested in investing in the stock market or in bonds. However, I believe it’s even more vital as a read to cryptocurrency traders and NFT investors.
The genius of Benjamin Graham pinpoints you to study the investment very well and disconnect your emotions in the process. Given that this market is highly dependent on the world, this is one of the most important lessons to learn.
“You need to be emotionally ready to receive the news tomorrow about a new country banning cryptocurrency and the prices dropping as usual. You also need to learn your investment objective and when to cash out.” – The Intelligent Investor by Benjamin Graham.
The cryptocurrency world is fascinating; there are no arguments there.
It has achieved a successful milestone whether you’re a supporter of it or not. The applications of such a technology in the upcoming years are going to ripple through generations to come.
Yet, this does not mean that you should put all your savings in cryptocurrency. A wise investor would understand what she/he is investing in. Benefiting from the technology by investing comes in different forms:-
- Putting money in a specific coin of a project one believes in (Like Solana, for instance). The only problem with such an option is that your savings are now in control of the unknown. Even if Solana as a blockchain technology somewhat excels and becomes optimistic, that does not necessarily mean that you’ll have a good ROI. The ROI could drop simply because of a rumor.
- Investing in new companies that are building actual products based on the blockchain. This could prove very rewarding if the market thrives in the upcoming ten years. However, those companies are probably affected by the first option. The real problem, though, is vetting the current companies. There are countless companies built on ideation or a lack of product with a fantastic website and hundreds of thousands of Twitter and discord followers. One has to carefully understand what those companies represent in order to increase the chances of a successful investment.
- Investing in companies that believe in cryptocurrency, yet they’re S&P 500 companies, for instance. IBM, as an example, is working with blockchain technology in many of its products. It stands to reason that if this market prospers, their stock value will increase as well, although not as dramatically.
Every person could be an investor or a speculator.
A wise person would be aware of which one she/he is. Crypto Speculation is not investment. That doesn’t mean that one should not speculate; it’s a choice. If you aim to take the risk of speculating that Doge would jump to $1.00 in a year and choose to put some savings in such a crypto coin, that’s up to you as long as you’re aware that this is more speculation than investment, which could succeed, but also could very much fail.
Diversification could be the perfect solution for many enthusiasts. One does not have to be extreme to place an entire portfolio solely in the crypto or the NFT market. One could diversify between crypto, NFT, stocks, bonds, as well as cash or commodities like gold.
Finally, whether speculation or investment, the key takeaway would be having complete awareness of the entire process.
I’m Al, a business consultant in Zurich, Switzerland. I believe in the power of delivering value to you, the reader. I’m focusing my content on being more and more on Medium and Linkedin. Hence, follow me on both channels to keep in touch and connect.