There is a new hype in the market— the DeFi coins. These days the DeFi coins are pumping some oxygen in the dying altcoin market.
DeFi is the short term for decentralized finance. And the goal of DeFi, as people say, is to "reconstruct the banking system."
It seems like most Defi coins are pulling a 10x-100x these days. And it almost feels like 2017 is back. Everything is puming.
So, fomoing into these coins is natural.
I am not that much active in crypto these days, so I don't have much idea what's going on in DeFi coins.
I have seen Elrond a couple of times, I think everyone knows about link( the coin that goes only up). And the recent pump of YFI has attracted more attention in the DeFi market.
If the same thing has hapened an year ago, I would have bought 8-10 defi coins, and would wait for 3-4 months to see what happens.
But my past experiences have changed me. And made me more wise(I hope!)
Now I don't want to just wing it. I have to have some kind of strategy.
So, after calculating all the gains I could have made by investing just $1,000 in ADA, or a DeFi coin in the past 2 months, I was almost ready to buy some coins yesterday.
But I got back to the lessons I have learned from the investing books and decided to wait a little bit.
When you want to buy something, sleep on it
Whenever I find something new and exciting, I get a severe impulse to buy it. Like the Dcity game. When I found it, I got extremely excited about the concept and decided to invest 8000 hive on the very first day to build my city.
However, my first impulse was to invest 15k hive. But I slept on it, and on the next day, I changed my mind. Decided to spend just 8k.
As of now, I think it was a good decision. Neither too high risk nor too low reward. A decent investment risk wise, considering the game is in beta phase.
Similarly, I had a strong desire to put some money in margin trading. It's good that I slept on the idea. And when I woke up, I didn't want to go through the stress of margin trading again. Staring at the charts for 6-8 hours a day.
Sleeping on a decision helps us to analyse the situation better. You won't wake up with the same impulse on the next day.
So, I slept on the DeFi coin investment too.
And today, I have decided that I will buy some DeFi coins, but after some more research. I will wait for some more time before pouring my money in these coins.
If it feels risky, sit on the sidelines
When there is FOMO all around the market, people feel that they are missing a lifetime opportunity This is the best time to lose your money.
I have been in this market for just three years now, and I have seen more than 10 life changing opportunities. If I had invested money at the right place, I could have ended all my money troubles for a long time.
So, the lesson is— opportunities will always keep popping in one way or another.
In 2017, it was altcoins, in 2018-19, it was margin trading(usually shorting) and in 2020, it is Defi coins.
But fomoing in the wrong coins will reduce your chances to take advantage of those life changing opportunities. For example, it has happened with me that I wanted to buy something but all my money was stuck in a bleeding altcoin bag. I didn't had the guts to sell at loss and take advantage of the next big opportunity. As a result, I missed a lot of opportunities.
If in the past, you had to 2x your money to reach your goals, after a bad investment, you will need to do 5x your money. And it's just one bad decision. You will make many bad decisions in your crypto investment journey. So, it's better to sit on the sidelines, even if you miss some opportunities rather than jumping on every opportunity and riding moon or getting liquidated.
If you don't understand it, don't buy it
There are more than 68 Defi projects/coins in the market as of now. And there would be 100's that I don't know about( I just checked some of these on coingecko.) Some of those have given massive returns, while some are just sitting on the sidelines, and may as well go bust in the next few months, just like the altcoin bull cycle hype.
It took me a long time to understand steemit. So I didn't bought much steem.
Now, I know a little bit about hive and beileve in its growth. So I keep adding small amount of hive power each month(something like 1000 hp a month).
As long as I don't fully understand something, I won't buy it.
Although I am looking more into Defi projects, I won't buy anything if I don't understand them. It's better to sit on the sidelines than to lose all your money.
Do I actually need to invest in it?
In the past, I won't have asked myself this question before buying a gadget or investing into something. But now I question myself, "do I need to invest in one more thing?"
As of now, I only have hive and a small amount of bitcoin. The markets look primed for a small bull run. So, I can add some exposure in the crypto markets for the long term.
I don't know how much DeFi projects will deliver. If they have any value or not. But till now, most of the altcoins have played the same game. "To find a bigger fool you can sell your coins later at a higher price."
Damn spoken like a true thinker!
Lol, thanks a lot bro❤️❤️
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This paragraph explains why I haven't invested yet in DeFi projects. There has been little time to check it yet, so I stuck with my traditional way of swapping my profits in altcoin into bitcoin on Changenow. This way I get to make a little money than lose it all.
great article Looftee
Nice!
The DeFi bubble. Same as ICO back in 2017.
Yepp!