Power of Patience: The secret to crypto investment success

Nowhere is this more prominent than in the risky (yet rewarding) world of , where speculative overpowers and drives up overall across the asset class.

Most view as a means of getting rich quickly and are on the lookout for the next BTC, ETH, SOL, or even DOGE and SHIB, with the promise of multi-bagger returns, and over-compressed timeframes.

At the very core of this greed for quick exponential returns from crypto, is the difference in mentality of evaluating the asset with the lens of an investor vs a trader. The same user might have the “patience of an investor” when deploying capital in equities for the long term but would seek quick returns from his “trading bets” in crypto.

This approach is being fuelled due to the lack of knowledge about the underlying fundamental value that a crypto asset might hold. Just like equities have various valuation models, even crypto assets can be valued based on novel metrics like using network fees as a proxy for cash flow. But most users continue to trade crypto like “penny stocks” and do not view it as an investment for long-term wealth creation.

In fact, investing in crypto for a longer time horizon could be akin to early-stage venture investing, where the upside potential on investments can grow exponentially over time. Great examples would be Ethereum (in 2014) and Solana (in 2020), which had their public token launches at less than $1 and are currently trading above $3,000 and $140.

The other approach is to let time do its magic because just like other asset classes, the power of compounding can create outsized returns and reward the patience of crypto investors. There’s a term for this amongst Crypto Natives: or Hold On for Dear Life. The idea is that if you have taken a high conviction position in a fundamentally strong project and continue to hold that position over periods of high price volatility, you will be rewarded with exponential gains.

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Source: Forex-Markets-Economic Times