The Top 5 Things Wealth Coaches Should Know About Crypto

In our previous article, we explored how Finfluencers are the Gen Z financial advisors of the current generation who are guiding people into the world of DeFi (Decentralized Finance). While Finfluencers lead the way toward exciting new projects and crypto assets to start a person’s journey into the crypto rabbit hole, some can also be considered as modern-day Wealth Coaches who bridge the gap between traditional assets and crypto assets and form a holistic approach to what true wealth may mean for a person.

A Wealth Coach works with individuals and families to plan for and reach future financial and lifestyle goals beyond just the money aspect. They evaluate a variety of tools that can be useful to focus on creating a positive impact on their clients’ lives. After all, what good is money if you don’t have the time to spend it, the health to enjoy it, the sense to know what to do next, the relationships to experience the benefits with, and the fulfilment of leading a meaningful life? Balancing those aspects — time, health, money, knowledge, meaning — is what true wealth is about.

At SyncDAO, we share these same values and believe that crypto assets will become a mainstay in most portfolios. We are cultivating a movement to go from crypto ‘Degen’ (the degenerative actions and behaviour of early crypto enthusiasts that is akin to gambling) to DeFi ‘Regen’ (leveraging DeFi protocols that give people the power to build long-term wealth generation practices and systems with maximum co-efficiency).

So for Wealth Coaches looking to stay ahead of the curve and include crypto assets and DeFi as a tool for their clients, we recommend developing a solid understanding of the following five cryptocurrency industry trends.

Trend 1: Industry Growth is Rapid

According to Crypto.com, global cryptocurrency users grew from 106 million people in January 2021 to 221 million in June 2021. Growth is present in all areas of crypto, with new startups and products launching monthly. Crypto products are becoming more mainstream too, including rewards credit cards, personal loans, and services that act like a high-yield savings account.

And when we say rapid, we mean blazingly fast. Just like Moore’s Law (essentially where technology doubles in speed every 2 years while becoming half as cheap) crypto takes it even further with exponential growth and speed. For those still struggling to come to terms with ‘basic’ crypto and DeFi which is just a few years old, the industry has already shifted into DeFi 2.0 and Web 3.0 development.

Trend 2: Crypto is Volatile

Over the past five years, it has been common for crypto assets to increase many times over in price only to lose half of their value within months or even days. Bitcoin for example is up over 8,000% over the last five years but has taken a bumpy road to get to that price. Volatility will continue as new cryptocurrencies emerge and mainstream adoption begins to take place.

It is not uncommon for crypto assets to increase hundreds to thousands of % in value, only to drop again just as much. The market is driven by speculation, news hype, social media, innovations in technology, and community engagement. In that regard, crypto, in general, is an event-driven market. If the traditional stock and forex markets were a tea-cup ride at an amusement park, crypto would be the main rollercoaster with dizzying heights, twisting loops, and gut-wrenching lows.

Trend 3: Industry Structure is Evolving

The cryptocurrency industry is a diverse landscape consisting of 3 main categories:

1. On one end of the spectrum, we have traditional banks and lenders. These types of entities are known as TradFi (Traditional Finance). They deal with fiat (cash) money, stocks, government bonds, and all sorts of fancy financial terms that are inaccessible to most people who aren’t accredited investors. They are centralized (one person or a group of people hold the keys to the company), hold custody of customers’ funds, and have access to the customers’ private data.
2. In the middle, we have CeFi (Centralized Finance). These are a mix of traditional and modern firms that include cryptocurrencies in their funds and products. They too hold the keys to customer funds and private data.
3. And on the other end of the spectrum, we have DeFi (Decentralized Finance). DeFi projects are based on using smart contracts (programmable code) in blockchain technology to automate and control aspects of wealth generation and organizational maintenance. Things like optimizing interest yields and voting on the use of treasury funds. The most decentralized form of a crypto firm is known as a DAO (Decentralized Autonomous Organization), which is largely controlled by its users through levels of consensus.

Contrary to TradFi and CeFi, DeFi is governed by code. It allows people to steer a ship using code as the compass, rather than relying on a single-sighted captain. Learn more about why DAO’s are the future here.

Trend 4: Investing Strategies are Diverse

Like traditional investing, investment strategies are diverse and range from simple to complex. Simple yet effective strategies include buying and holding (HODL’ing in crypto slang) crypto assets and using yield generating products that are similar to an interest savings account. Complex strategies involve actively trading crypto on exchanges much like the stock market, trading derivatives, and ‘yield farming’ — a DeFi term for actions like borrowing, lending, staking and providing liquidity to a market so that traders can trade without middle-men.

On a basic level, consumers generally need to understand the strategies and mindset required to wear the hats of an investor and a trader. They may choose to invest in crypto as a store of value, which is currently a leading argument for Bitcoin, or they may be looking for more volatile movement as a trader. Some use crypto as a way to hedge against inflation, while others invest based on emotions and FOMO (Fear Of Missing Out). Wealth coaches are therefore in a good position to provide sound advice to individuals who may be investing based on fear instead of a solid and strategic plan.

Trend 5: Different Types of Crypto Assets Are Being Created

The two main cryptocurrencies are Bitcoin (BTC) and Ether (ETH) from the Ethereum network. They are significant in that they are the foundations upon which other crypto assets have been developed from.

There are thousands of altcoins (alternative coins to Bitcoin) that have been developed over the past decade and are traded each day.

Altcoins formed as a means to support various crypto projects and each serves a different purpose concerning a project’s goals. Some have no purpose at all other than for novelty and are categorized as meme coins. Some coins serve a purpose specifically as a currency within an ecosystem, such as gaming coins. And particularly on DAO projects, there are governance tokens that allow those holders to have voting rights in the DAO. Unfortunately, there are also what’s known as sh*tcoins, which are projects that have underperformed, not delivered on their promises, or been outright scams. These are to be avoided at all costs.

One important distinction to remember is that there is a difference in the technical terms used to describe crypto assets. Even though they are generally referred to as coins, there is a big difference between a cryptocurrency “coin” and a “token”.

By definition, a cryptocurrency or coin is an asset that is native to its own blockchain. To be clearer:

• Bitcoin (BTC) operates and functions on the Bitcoin blockchain
• Ether (ETH) operates and functions on the Ethereum blockchain
• Avalanche (AVAX) operates and functions the Avalanche blockchain… and so on.

Like money, transactions of digital coins can be made from one person to another, however, no physical coins move when you send and receive them. All the “coins” exist as data on a giant global database (a blockchain) that keeps track of all the transactions and is checked and verified by computers around the world.

Tokens, on the other hand, don’t function in a simple transactional way like money. They are built on top of an existing blockchain and are used to interact with decentralized applications (dApps) that have different purposes; such as using a token to represent voting rights in an organization, or a token representing access to special privileges, or a token that reduces the fees associated with using a certain dApp. For example:

• The Yearn Finance platform has its own token — YFI — which gives token holders the right to vote on governance decisions of the Yearn protocol.
• The Binance Exchange has its own token — BNB — which reduces the fees for traders in their ecosystem by up to 50% or more.

The beauty (and chaos) of decentralization is that anyone can make their own custom token and build their own dApp to interact with any number of networks.

Next Steps for Wealth Coaches in Cryptocurrency

Equipped with this knowledge, Wealth Coaches are in a unique position where they can help people connect the dots in their financial lives and make smart decisions balancing short and long term needs. Wealth coaches should research the regulatory side of crypto and understand what they are legally allowed to do in their jurisdiction with clients. But remember that regulation is constantly evolving.

So what are we doing about it?

This trend with Finfluencers and Wealth Coaches is continuing to grow, and so we’ve designed SyncDAO to be easily shared by anyone who wants to be a guide or a coach within their own community, regardless of the size of their audience.

SyncDAO has created a DeFi platform offering Perpetual Vaults as a way for users to build wealth over time using the power of DeFi. As DeFi becomes more widely adopted, SyncDAO is dedicated to working with Wealth Coaches and Financial Planners to help deliver effective financial solutions to their clients.

If you’d like to know more about SyncDAO you can check out the website at syncdao.com

You can join the conversation on one of our channels

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Or check out more in-depth details about the project;

syncdao.com/deck
syncdao.com/litepaper
syncdao.com/tokenomics

You can verify the token address on https://etherscan.io/token/0xcf8829ae9384540c886a151fac3a865794cb9a01 and on the official SyncDAO website https://syncdao.com/how-to-buy-sdg-syncdao-governance-token/