DeFi Bull Run: 6 things to prepare for alt-season
DeFi Bull Run Checklist:
Were you prepared for the 17’/18′ Crypto Bull Run? If you weren’t dont stress you have a second chance to make up for any mistakes you might have made. Something good to take out of 2020 is Decentralised Finance (DeFi) and the Bullish Crypto Market that it is bringing to the space.
Follow our guide to be ready to make the most and capitalise on the upcoming DeFi bull market.
- Sign up to an exchange!
In the last bull-market of 17’-18’ it could take weeks to verify and fund your account. Get ahead of the herd this time around by registering today.
- Get advice from accredited sources.
Digital assets are outside of state regulation as a feature, however this can open you up to bugs such as hacks, scams, confidence tricks and other tomfoolery. Join the Mine Digital Discord to interact with industry professionals who are ahead of the curve. Then, follow Mine Digital on social media.
- Make a plan to be profitable
Where the last bull market was a parabolic curve of madness and participants were HODLING, this time you need more of a plan. Between capital gains, staking rewards and yield farming in full swing, picking projects and ploughing the right fields will allow you to maximise your yields.
- Use Portfolio Theory
Modern Portfolio theory was developed by Harry Markowitz and first published in the Journal of Finance in 1952. The idea behind the theory is that assets have different risk and reward characteristics and that an investor can optimise their own portfolio by understanding the risks and rewards of investments.
Risks are understood as either systematic or unsystematic and for cryptocurrency, systematic risks affect the digital asset industry and could be thought of as things that influence the total market capitalisation. Unsystematic risk includes more nuanced risk of individual investment, such as Vitalik’s ability to deliver Ethereum 2.0.
A well diversified portfolio would reduce the effect of unsystematic risk through the most effective deployment of risk capital (i.e. your money).
At the least, framing your investments in terms of risk/reward is one of the strongest ways to look at them.
Jump on our Discord server and talk to the team about a strategy.
- Profit-Taking
The money has never been made until you have exited your positions!
To decide on how to take profit, you should consider whether your position is a trade or investment. Trades use more leverage, have more pre-determined exits (the market will always change this) and you are trying to capture the move in the market as opposed to having a fundamental view of the asset in question.
Investments are more likely to be bought and sold with less market timing, although each way of looking at assets will often instruct the other.
The Warren Buffett method rarely fails ‘Buy when others are fearful and sell when others are greedy’.
To maximise your return while taking profit, minimise exchange and transaction fees with the worlds most efficient exchange, Mine Digital.
- Decentralised Finance
Decentralised Finance, has exploded in 2020, capturing huge amounts of value for investors as well as providing very high risk/return profiles in some assets. DeFi investing has mostly been about capturing yield from different mechanisms such as posting assets, minting new assets with those and reinvesting them in other places.
Some of these are novel approaches to markets and we have seen new assets that are not clones of previous digital assets but act as a new layer of tokenomics over an already successful project. Some examples of this are Based over Ampleforth and Sushi over Uniswap.
The majority of these projects are built on the Ethereum (ETH) blockchain and require ETH to make the transactions. Sign up to Mine Digital to ensure you have enough ETH to not get caught out.
Conclusion
So with these killer tips, you’re now ready to keep your ear to the ground and shoulder to the grindstone and to take full advantage of this and each new bull-market in these assets of the future.
For more assistance along the way, join the Mine Digital Discord server for more help or just to simply chat about the future of the world of investments.
