Spikes in the crypto market over the last couple of days have generated yet another feel of excitement around the space. Those who have threaded this path before caution against getting too excited and instead try and invest the likely causes, validity and eventual consequences of such a spike. The latter speak from a more experienced perspective
Crypto has burned even some of its most fervent adherents badly. In actual terms, it would be downright indefensible if the capabilities surrounding blockchain technology and a decentralized system were not so revolutionary. Then it would be nothing different from a ponzi scheme, and a lot of crypto projects still are scams. Yet the ability to understand the dynamics of the markets make deciphering a lot easier to do.
To start, we must begin by grounding ourselves in why crypto came into existence in the first place. The obvious issues that plagues the traditional finance system and likely new solutions that crypto seeks to provide. A simple google search will provide most of the information we desire, at the very least to some degree of accuracy.
Next is the very important step of knowing what to invest, when to invest and how to invest. I have seen people several times giving money to friends to 'invest' on their behalf in crypto. If things go south some form of resentment might usually accompany it from either or both parties. This information requires painstaking more detail than the basic information about crypto, therefore it is advised that we do our own research with the caution and care it deserves.
Asset management is another important concept in crypto finance. We decide whether to play long term or short term based on the information we have about the markets, trends and potential. There is a lot more information out there on good projects to work with and produce value. Security of an asset is another important subcategory under asset management and we must be informed about the possible threats and ways of shoring up our crypto security architecture.
Diversification of our crypto portfolios is important as a potential buffer against the failure of another project we are involved with. There should always be consideration on how to fight the price fluctuations we experience until things finally begin to stabilize. Fleeing to fiat during downtimes just wouldn't give us the experience we anticipate.
I already spoke about how Hive can be an excellent financial management toolkit with a crypto focus, which is kind of what leofinance already is.
