Takeaways from the Crazy Week in Crypto Markets:
May 8th - May 14th
In the wake of rate hikes in overleveraged markets overall, market downturns in the trillions of $$$'s and the Terra Luna collapse - You must always follow portfolio fundamentals when investing in Defi.
1) Always stay diversified - Never keep all of your eggs in one basket.
Even if your main Crypto Assets are Stable Coins, like mine, always stay diversified across coins, platforms, protocols and blockchains. You can own a blockchain specific version of any native or stable coin.
For example:
Here's portfolio diversification for just one Stable Coin: USDC
Blockchains:
Ethereum / Polygon / Arbitrum / Binance / Avalanche
Defi Protocols:
AAVE / Quickswap / UniSwap / Trader Joe's
Cefi Platforms & Exchanges:
Crypto.com / Kraken / Coinbase / Nexo / Binance
2) Practice Dollar Cost Averaging (DCA) - From Investopedia: "Dollar-cost averaging (DCA) is an investment strategy in which an investor divides up the total amount to be invested across periodic purchases of a target asset in an effort to reduce the impact of volatility on the overall purchase. The purchases occur regardless of the asset's price and at regular intervals."
Never APE into a crypto investment with a large sum of $$$ at one given time. Break up the investment into contributions / installments. Never invest what you cannot afford to lose
"Apeing is when a cryptocurrency trader buys a token shortly after the token project launch without conducting thorough research, usually because they are fearful of missing out (FOMO) on potential gains that could be lost if they hesitate in order to conduct due diligence."
https://coinmarketcap.com/alexandria/glossary/apeing
3) DYOR - Do Your Own Research. Always read the whitepapers and public documents for any platform, protocol or exchange that you farm or stake in. Know the value of the underlying asset that you stake or farm with and understand the investment mechanisms built into any platform that you engage with.
Join the Reddit, Discord, Telegram, YouTube, Twitter networks for platforms, protocols or exchanges. Learn from and share with communities that are built around your crypto interests.
Defi is so new that there is no formal school, course or certification about investing in it. Make full use of the current knowledge-bases and tools available online.
4) Use Tools for your Benefit:
DeBank- https://debank.com
Portfolio Management and Whale Wallet Watching. What are wealthy people doing with their crypto assets? Find crypto projects that $50M wallets are farming and staking in. Get a fresh perspective on coins, platforms, protocols and diversification that may not be in your knowledge base, yet.
More Whale Wallet Watching:
https://www.whalestats.com/
Crypto Market Analysis:
https://cryptoquant.com/asset/btc/summary
Crypto Market Analysis:
https://nansen.ai/
Defi Aggregator:
https://defillama.com/
Disclaimer:
I am not a Financial Advisor and this is not Financial Advice.