3 lessons to learn for crypto investors from the FTX collapse
Okay so here we are going to learn 3 lessons from this FTX collapse and remember this is not going to stop because it's cycle and it happens after certain time. We have seen many collapse in crypto industry because the people who know the cycle are waiting for frustration mode on when most of the people say "crypto is dead". This time situation is transforming like this and just yesterday I have seen the detailed article by big author and he is literally aying crypo is now dead. When people loss their hopes, crypto again start rising. Same thing going to happen again.
1.Diversification is the key
No matter how strong project you choose to invest, you have to be careful with your fund and never invest all the money in single project and this is what I believe. You must diversify your fund to survive and grow in this market otherwise forget about making money because if you don't know the diversification, one day you will be ruined and that is the harsh reality. I have invested in multiple projects and in bitcoin too. Remeber cash is the king too so you must have cash. Invest some of your money in property and gold and these two are decent investment. For example your 50% investement will go to different crypto projects and rest will go for cash, property and gold. This is what perfect diversification.
2.You must know the risk involved in your desired crypto project
Proper research is important before investing in any project. Ofcourse FTX is big exchange and no one expected that but this is crypto market my friend and it always show us something unexpected. Similary, we also not expected with luna but now you can see luna is no more. Obviously it is very difficult to choose the project for invest. I believe strong community is the key for any crypto project to thrive and you can see this quality in steem community. This is truly decentralized community. So you can see strong communtiy, strong support team and what is the vision of that company.
3. More focus on decentralization
Steem and hive has strong community and this is because of hive and steem are true decentralized platform. There are many crypto companies saying that they are decentralized but in reality they are not because one person controlling the paltform and holding big amount of crypto so it can move the market it can change the direction of the company and i think this is not decentralization at all. You have to check all the aspects that fits in true decentralization. We have decent examples and bitcoin is decentralized and after that hive is also decentralized and it has these qualities. So why not we move towards decentralization? Why not using decentralized wallets to hold crypto? why not use decentralized exchanges? Theset things will take time but if we can start folliwing it we do not have to worry. Obviously there are some difficulties in decentralized exchnages and lack of features that centralized exchanges provide but it is atleast better than worst.
What is you opinion? Must share you point of view in the comment section. Thanks...
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hi dear friend @suerteli
The bad news does not stop in this world of cryptocurrencies everything about FTX is a disgrace, but here we are, we survived another crisis and we will be rewarded if we continue in this world
the worst part is when you have 3 projects and all 3 fail so we have to keep trying one day we will win back all the losses
god bless you
Your point is strong too. Thank you for the comment.
You have highlighted important factors and if all these are taken into consideration, it will help reduce ones' chances of being rug pulled. Thank you for sharing...
Exactly but sadly cryto users repeat same mistak again and again.
Dear @luckyali
One extra lesson I've learned from FTX collapse is that panic "bank-runs" caused by powerful people (like CZ from Binance) are fully legal within crypto world.
If he would cause bank-run on any traditional financial insitutution or any bank ... then he would be in so much trouble already. But crypto world is still a wild-wild west.
Where is lesson number 4?
Also you've mentioned "Proper research is important before investing in any project". Truth be told, there is no way any small investor (like myself, like yourself) could do much in that area. What kind of research can we do if we don't have an access to all financial records behind companies we're investing in?
Hope you're having great weekend :)
Cheers, Piotr
Sorry it's not 4 it's 3. Edited
I am talking about research like who are in support team what is the background of them. We can check their social media accounts and know what they have done in past. Other thing is checking their old projects if they have. So i think these things help us to take the better decision. isn't it? But that's still not 100% perfect but atleast better than nothing...
Thank you
Thanks for getting back to me @luckyali
You see, Ive been working for years as a digital marketing guy and I've seen many BS promoted online. If someone has enough resources then such a person will be able to create online persona for himself and his team.
Look at SBF from crashed TFX. He even managed to be interview by reputable worldwide magazines like Forbes. And people believed in him.
Right now if someone would tell you that CZ is a fraudster and that Binance will collapse within a year time - would you believe? I'm sure I couldn't give you one solid answer if we should put our trust in binance. Or even big projects like ADA, Solana, ETH. No matter how much research we will do - all we can learn is "what they want us to learn".
That's my sad impression. It's just very easy to fool investors by building fake image of company and people working in that company. Especially if someone can spent millions on marketing and PR.
Hopefully I am making sense?
Cheers
Yes that's true that is why I said anything can be happen and this research is not 100% works. Obviously there is risk involved in crypto but at the same time it is most beneficial industry too.