Sumant Vasan of Bizuly on The 5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency
Investing in the actual coin or project is much less risky, since you can always hold the coin, even if it drops, and wait until it recovers. Margin products are designed to allow for fast trading based on price movements and are oftentimes traded in very high volume, therefore not suitable for holding for any extended period.
Over the past few years, the Cryptocurrency industry has been making headlines nearly every week. Many people have gotten very wealthy investing or leading the cryptocurrency industry. At the same time, many people have lost a lot investing in the industry. In addition, more people have been scrutinizing the ecological impact of crypto mining, as well as its potential facilitation of illegal activity. What is being done and what can be done to address these concerns?
In this interview series called “5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency” we are talking to leaders in the cryptocurrency industry, as well as successful investors, who share insights from their experience about how to successfully invest in Cryptocurrency.
As a part of this series, I had the pleasure of interviewing Sumant Vasan.
Sumant Vasan, Co- Founder and Chief Marketing Officer at Bizuly, is an experienced marketing professional with a passion for the cryptocurrency space. He has been investing in blockchain projects for the past 6 years.
He describes Bizuly as an easy to use financial discussion platform that combines the features of Reddit, Facebook groups, Discord and Twitter all together. The team at Bizuly (a mobile application), aims to bridge the knowledge gap in the investing world by bringing experienced traders and novices together, to help each other to make better investing decisions.
Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit. Can you tell us a little about your backstory and how you grew up?
I was born in India, but my family soon after emigrated to Los Angeles, California. My father is a CPA and my mother is in IT, specifically in the E-learning space, and I have one sister who is a lawyer. Great childhood, nothing to complain about there. Good food, roof over my head, access to after school sports and family vacations..very fortunate to have an enjoyable childhood. I would say a few things that define me are basketball and hip hop music. Yes, I love the Lakers, and most of the stuff I listen to isn’t safe for radio play. Funny thing is that most of the successful people I know are also big rap aficionados, so maybe I am on the right path.
I wouldn’t say I was a social child, but I had a small group of people that I was fond of. I was always playing basketball, so that is where most of my friends were made- on the court.
Is there a particular book, film, or podcast that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
So many to choose from, but my favorite is The Pillars of the Earth by Ken Follet. It’s the longest book I have ever read at a whopping 806 pages, but did an excellent job of presenting the time period in which building churches was the greatest tribute one could undertake. It also depicted the harsh realities of life before power tools. Not sure what it is about that book, maybe it was the sheer feeling of accomplishment after completing it that makes it so memorable!
Is there a particular story that inspired you to pursue your particular career path? We’d love to hear it.
I worked as a social worker working with military veterans, but found it to be emotionally taxing. I stumbled across an internship opportunity in the field of digital marketing, and decided to give it a try having known not much at all about the scope. One thing led to another, and I was fortunate to work my way up to leadership positions within notable companies over the next 10 years. One thing that I absolutely love about digital marketing is that it combines traditional marketing methodologies with the tech of today. Being able to mesh psychology with new forms of reaching prospects using digital means is quite interesting and ever changing.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?
I have made so many mistakes it’s difficult to narrow it down to just one. I do remember this one time I accompanied the Founder/CEO of our firm to a very important and quite sizable prospect meeting, to help him set up and present. After arriving and the typical pleasantries, I realized that I had not copied the files onto the presentation laptop from my office system. 20 minutes in and ready to start, I was mortified, and the look on the owner’s face said it all. Luckily, they laughed it off, and shared a similar story with me from a time when they were first starting out. Although still embarrassing, it did ease the pain.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
Once again so many people. My parents first and foremost. My wife definitely was always supportive and my sounding board, voice of reason, and harshest critic. Without her, who knows what would’ve been. Professionally, I did work with a well known digital marketing agency focused on the luxury vertical, which was spearheaded by a team of very smart brothers. They taught me that ‘manning the helm’ did not mean rule with an iron fist. They had a very subtle mix of authority, but being ‘of the people’. As corny as that sounds, they were prime examples that it is possible to be friendly, cordial, and at times silly with your people, as long as everyone understands the goal and buys into the vision. Lead by example, but not from a tower I think is the lesson they taught me.
Are you working on any exciting new projects now? How do you think that will help people?
Definitely. Bizuly is a mobile app that my partners and I created to help people make better investment decisions. The premise is that the large financial institutions typically fare well due their wealth of resources by way of analysts, risk managers, algorithm engineers, etc, while the ‘retail’ or individual trader or you and I, have to scour forums, try to piece together financial reports, and look at charts on our own with little to no support.
Imagine if there were a platform, where we could share our ideas on stocks and cryptocurrency investments with experienced traders to get their thoughts? Or if experienced traders could share their picks and charts, and newer investors could follow them and learn?
Basically, Bizuly is trying to bring it all together and give individual investors access to crowd sourced information to help us all make more sound investment decisions.
Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. The cryptocurrency industry seems extremely dynamic right now. What are the 3 things in particular that most excite you about the industry? If you can, please share a story or example for each.
I think the real world use cases are infinite when it comes to crypto. Imagine a ‘filing system’ for information that is accessible by anyone anywhere, without having to depend on standards that might not be safe or prone to human error?
One example is in the healthcare industry, pertaining to healthcare records. Currently, the healthcare industry is working on digitizing medical records, but even by doing so, there isn’t one easily accessible central system. Each hospital has its own digital record set up due to security protocols and HIPAA compliance rules that may delay vital information from being shared to other providers in critical situations.
If patient A suffers a major injury in another state, but the doctor there is unable to quickly access their medical records, crucial time might be lost that might make a significant impact to the patient’s medical care. With a distributed ledger (blockchain) that can be accessed from anywhere with a private key, medical staff can simply ‘unlock’ these records at their location.
Another example is seen in the booming defi or decentralized finance space. This new type of lending/borrowing and interest investment strips the traditional intermediary, the bank, and facilitates peer to peer lending. This of course has many advantages, most notably the drastically reduced fee structure since you are dealing with another person, but also that it forgoes credit checks and verifications- you can simply use your crypto as collateral.
Thirdly, I think the most widely applicable use of crypto is in the banking sector. Cross border payments of any amount can take place in a few seconds. In addition, without depending on centralized institutions, transactions can happen at any time and with little oversight.
What are the 3 things that concern you about the industry? Can you explain? What can be done to address those concerns?
I think there is still the question of security. One advantage banks have is that the FDIC secures a portion of the funds, so by the off chance there is a hack of some sort, your money is protected. Since crypto exchanges are still in limbo in terms of regulation, it is a bit more risky. Newer investors often leave their assets on the exchanges themselves leaving them vulnerable to sophisticated hackers. By removing them from exchanges and onto cold storage devices such as a ledger, assets are notably more secure.
Secondly, the crypto market is still wildly speculative. Meaning there is little in the way of fundamental financials or revenue directly attributed to the different assets. It is similar to investing in Tesla when they were new and had grand plans, but no real revenue. Of course with Tesla and their physical product this soon changed, with crypto you are investing in what could be down the line. But if you look at current valuations of many coins, they have little to no financial flow backing it up, other than they are priced based on what people are willing to pay for them.
Thirdly, only a handful of these crypto projects will succeed, with a majority of them going to zero. I think if people invest for short periods, they can generate amazing returns, but those that set it and forget it may wake up one day to their investment completely bottoming out.
What are the “myths” that you would like to dispel about cryptocurrency? Can you explain what you mean?
There are definitely a lot of myths out there. Most people think crypto is synonymous with magical internet money when in fact the technology behind some of the top projects, such as Chainlink, Solana, Compound and Aave, are quite advanced. There are use cases, but the valuations are what make little to no sense so early in the game.
I also think that most people are too scared to accept this space because they can’t feel the physical product. This is completely understandable and one of the hardest mental roadblocks to overcome. I think it comes down to some feeling that if they can’t see it, it is not real and holds no value. But in the 1st century BC, Publilius Syrus wrote: “Something is only worth what someone is willing to pay for it”.
How do you think cryptocurrency has the potential to help society in the future?
I think as mentioned above, there are a lot of very interesting use cases for cryptocurrency and blockchain technology as a whole. There will come a time where all the meme coins of the world will cease to exist and only legitimate projects will dominate the space. A public ledger, blockchain, can provide transparency into accounting, supply chain, medical records, and chain of custody applications.
Recently, more people have been scrutinizing the ecological impact of crypto mining. From your perspective, can you explain to our readers why the cryptocurrency industry is creating an environmental challenge?
Many of the original projects were based on proof of work (POW) validations which are energy intensive. They require huge amounts of processing power, high quality microchips, and oftentimes can consume large amounts of power resources. The newer technologies use Proof of Stake (POS) or Proof of Authority (POA), which are far less energy dependent. The most popular cryptocurrency, Bitcoin, uses POW to validate transactions currently. But there have been improvements in that area in which natural energy sources such as volcanic ‘steam’ or hydropower can be used to reduce the carbon footprint.
From your perspective what can be done to address or correct these concerns?
As with most technology, there will be a period of trial and error which will bring to light some of the issues. These will all be fixed or made efficient in due time, but I don’t believe the environmental impact is anything to truly worry about at this time. To put things bluntly, there are other sources of waste that are far more pressing that we are yet to address efficiently- trash, smoke pollution, excessive mining, deforestation, and plastic waste. Let’s work on the more impactful problems first.
Recently, more people have been scrutinizing cryptocurrency’s impact on illegal activity. From your perspective, can you explain to our readers why cryptocurrency, more than fiat currency, is seen as an attractive choice for criminals?
I believe that Hailey Lennon, a former contributor for Forbes, has a quote in her article from Jake Chervinsky, General Counsel, Compound Labs that says it best:
“It’s disappointing to hear Dr. Yellen repeat the mistaken view that crypto is mainly used for illicit activities. Her statement is demonstrably false . . .That said, it’s important to remember that crypto is a relatively small issue compared to everything else the Treasury Department is responsible for, so she likely hasn’t spent time deeply considering it yet.”
When it comes to illicit activities, such as money laundering, extortion, and anything related, fiat currency is still the preferred medium. Crypto plays a very small role because let’s be honest, most people are comfortable with money, something they can touch and feel.
From your perspective what can be done to address or correct these concerns?
Some sort of regulation might be considered. But, let’s keep in mind that the point of decentralized platforms is to be independent of a central governing body. I think there might be a way to find a happy medium between crypto and regulation, but we should probably focus our time on regulating or identifying crime in the fiat space, which still accounts for probably 95% of all such activity.
Ok, fantastic. Here is the main question of our interview. What are “The 5 Things You Need To Understand In Order To Successfully Invest In Cryptocurrency?” (Please share a story or example for each.)
- Decide if you are investing in actual projects, or just trying to make money.
There are two ways to invest in cryptocurrencies. The first is to buy the actual coins, the second is to use a margin type trading instrument which is essentially where you trade in the value of the coin pegged to a stablecoin, such as USD or USDT.
Investing in the actual coin or project is much less risky, since you can always hold the coin, even if it drops, and wait until it recovers. Margin products are designed to allow for fast trading based on price movements and are oftentimes traded in very high volume, therefore not suitable for holding for any extended period.
Here’s an example: If you wanted to invest in bitcoin, you could buy 1 for about $30k as it stands. If the price were to drop to $29k you could just choose to wait until i recovers to make a decision. It’s similar to holding a security that has dropped a little, say Tesla stock. If Tesla stock dropped $100, you could wait until it goes back up to sell, since you actually own it.
Margin trading is when you use small amounts of money that are leveraged (multiplied using borrowed funds from the exchange or other market participants). So you could alternatively use the money you would have spent on buying one bitcoin, to purchase contracts equivalent to 10 bitcoins for the same $30k. But in this case, if bitcoin dropped by $1000 dollars, since you have 10 contacts, you are actually down $10k ($1k per bitcoin contract). As you can see, it might not be possible to incur any more loss than the $10k you are already down, in case it decides to drop more.
In most cases, it is advisable to buy the coin you want to invest in at favorable prices and wait for growth.
2. Decide whether you are investing based on price action (price movements) or value of the project.
For transparency, this is very similar to number 1 above, but goes more into detail.
Price action is investing based on price swings, buy low sell high, sell high buy back low. These price fluctuations are quick and require the ability to execute trades quickly.
If you lack the time and energy to follow this type of price movement, it’s probably a better idea to research projects that you feel have scope and have a high likelihood of being successful. Then simply invest in these projects and wait until they succeed. Sell the coin when you feel you have reached a predetermined profit level.
3. Make Sure your Risk is Managed
No matter which path you choose to invest in, actual coins or leverage trading, make sure you manage your downside. Always enter Stop Losses, which is a type of order that will basically sell/buy that coin at a certain price to avoid too much loss. If you are willing to lose $1k on an investment, set a stop-loss at that loss amount, that way you forgo any huge swings where your potential loss could be catastrophic. Instead walk away losing that $1k and be thankful that it wasn’t more. You can then live to fight another day. Always protect your capital!
4. Investing is Risky, You May Walk Away with Nothing!
I hate to be the one to say this, but there are a lot of scam coins/projects out there. You know the ones that spend huge amounts on marketing to make you feel like they actually have amazing tech behind the and are worthwhile projects looking to change the world? Beware of all projects.
- Do your homework, make sure they have notable investors.
- Check out their website, road map, use cases and community.
- Are people actually talking about the value of the project, or do you get the impression that the community is simply trying to pump the price up, just to dump it at a later point?
- Do they have a real social presence with engaged followers or just spammy profile comments
One of the latest ‘rug pull’ projects was called Frosties, an NFT project with promising rewards and ecosystem. Shortly after earning over $1mill, the creators decided to shut down the entire thing and left members without a project, community, or a coin of any value. They have been arrested, but this does little in the way of compensating those who suffered both financially and emotionally from the ordeal.
5. The Most Important Rule for Success** Be Disciplined Enough to Step Away!
The cryptocurrency market is 24/7. It has no set hours like the NYSE or other exchanges. At first, this might seem like the ideal environment with its flexibility to work any time and from anywhere, but there are some quite serious tradeoffs.
Drawbacks of a 24/7 Market:
- The need to always look at your phone (price checking)
- Distant from family, even when sitting next to them (always looking at your phone)
- Trading always on your mind
- One tracked conversational tone (hey do you trade crypto?)
- Quality of life drastically dropping due to inability to focus on anything else
- Dogs suffer- less time for walks
- Wife suffers- incessant conversation about financial topics that she has no interest in
This was very meaningful, thank you so much! We wish you continued success!
