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Even the most novice degens know that the only rule that applies to cryptocurrency markets is that there are no rules. Not even the greatest minds in the world can overcome the chaos that is the world of digital assets. One minute, Michael Saylor and Microstrategy could be live on CNBC discussing their latest billion-dollar Bitcoin purchase, and the next, Jim Cramer You could tell the United States that you would never touch Bitcoin with a ten-foot pole, just a couple of weeks after calling it digital gold: it's crazy.
The market has been pretty uninteresting as asset prices have moved sideways for most of this year. However, hope in the vision of the Fed's mythical "soft" landing, combined with the upcoming Bitcoin halving, has the Web3 community salivating at the prospect of many life-changing opportunities that could soon be within their reach. With greed in the air, it would be foolish to ignore the difference in the outlook as market sentiment changes.
Whether companies like BlackRock look to issue ETFs to market crypto exposure, corporate adoption, multiple IPO, the rise of artificial intelligence or the attempt at regulation, there has never been so much discourse surrounding the digital asset class. That's exactly why you need to know three key things to take advantage of what's to come.
Related: Breaking the Bank: America's Multitrillion-Dollar Banking Problem
1. Dumb money following smart money is still dumb
One of the most common mistakes potential investors make, regardless of their target market, is outsourcing critical thinking skills instead of developing their own. Most investors prefer to follow someone else's investment decisions rather than perform their own analysis.
That's not to say there's anything wrong with seeking guidance from someone with more experience; However, it is important to remember that finances, goals, and risk appetite vary from person to person. Blindly following the advice of anyone, no matter who it is, is a sure way to make losing trades. Instead, cultivate the ability to determine the fair market value of an asset so that it can capitalize on any arbitrage opportunities that exist within a given market.
In times of prosperity, it is quite common for novice investors to fall victim to scams. Whether it's a personal security issue gone wrong leading to a complete loss of funds or you being tricked into investing heavily in a meme coin pump and dump, it's important to remember that there is no such thing as easy money. Be equipped with the tools to properly evaluate the viability Viewing an investment on its merits alone is the most important key to financial freedom.
2. Cryptocurrencies are small!
As I write this article, the cryptocurrency market capitalization (i.e. total size) is around $1 trillion. By all indications, this is an outrageously large figure for an asset class that is not yet recognized by some of the country's leading investors. elite. However, it pales in comparison to the vast majority of other asset classes. For context, the US stock market cap is about $47 trillion, while Apple ($AAPL) alone, with a market cap of $3 trillion, is about 3 times greater than all cryptocurrencies.
If cryptocurrencies' mission to upgrade our archaic financial system and financially connect the most economically marginalized parts of the world is successful, the positive potential is undeniable. For example, the recent progress we have seen in the development of a Bitcoin spot ETF will dramatically increase opportunities for the average person to gain exposure to cryptocurrencies without having to take on the operational risk of self-custody.
There is an astronomical disparity in global sentiment towards digital assets. That is to say, we have seen more liberated financial markets abroad, such as the United Emirates or several Latin American countries, embrace cryptocurrencies with open arms, while many Americans remain emotionally scarred by the narratives that have been weaponized in their against to discourage participation.
According to a study conducted by the Pew Research Center, 75% of American people They do not trust the security and reliability of cryptocurrencies. This stark contrast sets the stage for rapid price swings. It shines a light on potentially misaligned incentives that could have come into play amid a weakening dollar and an ever-changing geopolitical landscape.
Related: 4 tips for companies looking to enter the crypto market
3. Utility
Perhaps the most significant change that has occurred over the last market cycle is the influx of use cases that have finally become a reality. The overwhelming success and adoption of non-fungible tokens (NFTs) in the world of art and ticketing and at companies like Gucci, The Savior and the most prestigious brands and countries in the world that consider cryptocurrency legitimate currency, Web3 is no longer possible; it's happening.
Several advances in decentralized technologies have largely addressed the initial limitations of many decentralized protocols. The emergence of proof of stake and its numerous derivatives has allowed builders to put decentralized technologies in the hands of consumers and dramatically expand its applications. And while most degens have been of the opinion that in the world of distributed ledgers "winner takes all," it now appears that the Web3 community at large is interested in finding ways to build bridges to strengthen collaboration, a essential ingredient for mass adoption.
Conclusion
We are on the brink of what could be the largest transfer of wealth that has ever occurred in human history. The essence of blockchain is to create an equitable world where no one is a victim of abuse of power.
Bitcoin creator Satoshi Nakamoto dreamed of a more financially free world where everyone could participate. And although he couldn't even imagine how it would all play out, he must be happy to see the financial and lifestyle benefits of his technology come true for so many people around the world.
