Reward Risk Taking (With Cryptos)

It’s no secret that investing is one of the quickest ways to reach your goals, it’s one of the first suggestions from leading wealth and business coaches such as Grant Cardone, Gary Vaynerchuk and Tony Robbins. You don’t have to look hard to find countless speeches and books on the subject all over the internet.

“There’s no shortage of money, only of people thinking big enough” — Grant Cardone

The ways we invest are very interesting but not as interesting as what we invest in. People have invested in everything from livestock to minerals, paper to plastic and pelts to giant stones.

Some of these investments would garner a much higher risk than others like for instance a giant stone, a Rai Stone to be exact. Used as currency on the island of Yap in the Solomon Islands, these limestone discs with a hole in the centre can measure 4 metres in diameter and weigh over seven tons.

The high risk comes in when trying to build your wealth. You couldn’t just dig these stones out of the earth or borrow one from a friend. You would have to risk your life paddling across to neighbouring islands where you could carve these behemoths from a mountainside and row them back to the island.

This is unquestionably a high-risk currency play.

The monetary system of Yap relies on an oral history of ownership, just like blockchain it requires consensus. Because these stones are too large to constantly move, buying an item with one simply involves agreeing that the ownership has changed.

The extrinsic value of a specific stone is based on not only its size and craftsmanship but also its history. If many people — or no one at all — died when the specific stone was transported, or a famous sailor brought it in, the value of the rai stone increases by reason of its anecdotal heft.

Today, in most parts of the world we don’t have to risk our lives to be exposed to high-risk currency moves, we have cryptocurrencies to thank for this. Cryptos are known for their volatile price movements but I can honestly say I have never had to risk my life for a Bitcoin.

Whether or not you already have exposure to a high-risk investment vehicle, Cryptos are definitely something you’ll want to keep on your radar, especially since this year alone we have seen more big players like Black Water, Goldman Sachs, George Soros and Mike Novogratz entering the market than ever before. These behemoths of the financial industry are entering for one reason, high returns.

With higher risk comes higher reward, yes, but also a greater potential for substantial loss or entire loss of capital. The safest times to enter these markets to minimise downside is after big corrections, much like what we have experienced in the crypto market since January 2018.

Buying in times like these is where enormous amounts of wealth are made, times like these are where the age-old quote comes from “The time to buy is when there’s blood in the streets.”

A more recent example would be looking at the number of billionaires worldwide before the Global Financial Crisis, 793 according to Forbes. Only 4 years later that number had nearly tripled to 2,170 billionaires enjoying a collective fortune of $6.5 trillion.

Even being selective with entries, there will always be a risk/reward factor which can be managed with traditional investment fail-safes. Digital asset investments have some exponential abilities, including creating potentially big payouts in relatively short time periods. Let’s just look at the top two cryptocurrencies measured by Coinmarketcap.com.

At the time of writing Bitcoin is $6,464 USD. To reach it’s previous All-Time High would be over +200% profit. Etherum is $202 USD. To reach it’s previous All-Time High would be over +600% profit.

These may sound like moves which will take 10 years and they may well do that, but investors are exposed to this form of high-risk investment for that potential of reaching these targets within a much shorter time frame.

So are you going to sit on the sidelines?

Or, are you going to risk your lives for precious rocks?

Maybe just maybe you’re going to sprinkling a few investing seeds in the fertile soils of the crypto market, with-in the high-risk allocation of your capital.

To master risks, you’ve gotta take them……