When you invest in crypto currency, you should consider three factors
Recently I researched cryptocurrency projects for my own investments. I truly believe that crypto currency will be the game changer in 21 century and the most valuable invention since the first internet came out. We don't know the exact number of crypto projects in the world. but There might be tons of project that is rolling out even in time that I am writing this blog and the project is running 24/7 without suspensions. Next year will be the memorial year for bitcoin when the most valuable asset management company will release spot bitcoin ETF for retail investors. It means that bitcoin now and officially will come into the institutional realm of future finance. As you know, blockchain technology is quite geeky, and not easy to access the world of Bitcoin investments due to technological hurdles. With spot bitcoin ETF, it will reduce the hurdle so that more retail investors will find it easy to invest in bitcoin and another crypto assets. Here are three factors that I am considering before investing cryptocurrency project. I am super excited that my eyes are truly opened and see the new visionary sight of the crypto world. Now it is time to all in.
First, It's all bout SCARCITY
When you look back at the history of money, money that has a characteristic of scarcity won the competition of the monetary system. There were so many items that were competing to be a major monetary system such as feathers, beads, grains, gold, and silver in modern times. As I research about all of these, scarcity is the key to being successful monetary players. So that I decided "scarcity is the key" as my criteria for investing crypto project. As you know, bitcoin has 21M coins as a ceiling capped. This is generating scarcity for Bitcoin when we trade, buy and transfer within the crypto network. To be a successful crypto project, it certainly has scarcity within its inner characteristic.
Second, It's all about STORING VALUE
Recently, we have had high inflation and someone mentioned stagflation in the economy. As investors, we need to consider and think about how can we store the values of our assets within the era of high inflation and high geopolitical conflict between the US and China, and other areas of the world. This is the reason why I decided to invest in Bitcoin. Bitcoin has a ceiling capped and no one can print more coins within the bitcoin system. This prevents the devaluation of bitcoin as an asset so that I can comfortably invest in bitcoin as my major asset in my portfolio. So for any other crypto project besides bitcoin, we need to figure out whether those crypto project has a characteristic of storing value as an asset. This is my second factor to invest in crypto projects.
Third, It's all bout SYSTEM by programmable scalability
The great thing about bitcoin is the system that we can make programmable features on top of the system in bitcoin. We can make DAPP and let users use these DAPP and transfer coins. It provides payments, transfers currency within the speed of light, and stores value as asset investments, etc. So if I am looking for another crypto project, I would look for one that crypto projects can grow as a system with programmable scalability. When those crypto projects can scale into a billion transactions, the value of utility for that crypto project will exponentially rocket over the ceiling. This is the third factor that I have for making crypto investments decisions
