Being a full time crypto investor doesn’t necessarily mean you’re actively trading, gambling on shitcoins, or swapping NFTs. For me, most of my time is spent researching opportunities and organizing my thoughts. Pulling the trigger happens a lot less than you’d think!
Go Into Research Mode
The foundation of investing is your investment thesis, but you can’t formulate a thesis until you know as much as possible about the subject.
What problem is Bitcoin solving? What problem is Ethereum solving? Can you describe it succinctly? If not, you should probably dedicate more time to research.
For assets like Bitcoin that typically means reading books like The Bitcoin Standard, blog posts by Robert Breedlove or listening to podcast interviews with Michael Saylor.
For Ethereum its reading books like The Infinite Machine, blog posts by Vitalik and podcast interviews with Justin Drake.
If you haven’t studied crypto history, this can also be an epic source of inspiration.
If you’re past this point and already you’re probably hearing people on podcasts and Crypto Twitter mention new technologies and neww tokens every day. Go down those rabbit holes. Learn all you can.
We’re not looking for answers, we’re looking for inspiration. Let it brew.
First Principal Thinking
You’ll never reach the bottom of the rabbit hole, but at some point you can go back to the basics. It’s time to take everyone else's thoughts and opinions and formulate your own thoughts and opinions basedddddd on their thoughts and opinions.
Why did Satoshi invent bitcoin? Has it succeeded or failed? Why or why not?
What did we think would happen each cycle? What actually did happen each cycle?
What trends are you noticing?
Structure your thinking. You may may have a lightbulb moment, you may not. Let it brew. Keep playing around. At some point you will be STRUCK with an idea, or two or three. Follow them.
How Will It Make Money?
Just when you thought you had it all figured out, a question popped into you mind, “How will this project make money? How will it capture value?”.
From experience, this is a common conundrum. It doesn’t mean your idea is ruined, it just means its something important to consider. Apparently Google didn’t know how it planned to monetize organizing the worlds information, but they eventually figured it out.
Your Crypto Investment Thesis
Whether you’re ready or not, the cycle is here and its time to put your money to work. I can’t describe a crypto thesis other than to say it’s usually something pretty simple, but very impactful. Here are examples of my past thesises? Thesi? Theseye?
- In 2013, my crypto investment thesis was solely around bitcoin. A decentralized, permissionless, programmable, digital money which couldn’t be confiscated or manipulated. A digitally first money designed for the new digital world. Litecoin and Dogecoin were around, but Bitcoin was all I bought, and that’s all I needed.
- In 2015 I stumbled on Ethereum. It was a NEW idea. Something I’d never considered. My thesis was simple: A global, decentralized, super computing platform built on blockchain could be big, so I bought a bunch at $15 on now defunct btc-e.
- In 2017, after experiencing the rise of Ethereum and witnessing tokenization as the first major use case, I was certain decentralized exchanges would be huge. So I invested in Bancor, Kyber and 0x - none of which did all that well. It was too early. Uniswap wouldn’t exist for another year.
- In 2018, my thesis organized around “country specific” blockchains. Bitcoin was the people’s money, Ethereum was the global super computer, and I was starting to think countries might want their own blockchains too. So I bought $WAVES at $0.15 and $NEO at $5.50. Both investments worked out incredibly well. The mega trend at the time was ICOs, and most of the ones I bought into were a total fail.
- In 2021, I published my Stablecoin Lock-In Theory which in a nutshell, theorized that stablecoins were the biggest growth opportunity in crypto and the rise of stablecoins would “lock” value in the crypto markets. The former was accurate which unfortunately lead me to Terra, the latter was inaccurate also because of Terra.
- My 2023 thesis is still in the works, however at the moment its pointing towards the proliferation of “Real World Assets” (RWA) coming on chain. This once again means stablecoins except in the form of CBDCs, it also means stocks, bonds, real estate, etc…
What’s your thesis going into the next cycle? Let it guide you.
There’s nothing more fun than brainstorming investment theses (nailed it!) ~ if you’ve got one and want to chat, hit me up.
Written by: @gerbz Gerbz is the founder of BitLift and has been journeying down the crypto rabbit hole since 2013.