1) Right Place, Right Time
History is filled with the proliferation of rising asset classes that have stimulated investors. In the 1630’s, it was tulip prices in Holland that skyrocketed to unforeseen levels. In the 1720’s, stocks of shipping companies in the South China Sea experienced a boom. The 1980’s saw a rise of the Dow Jones, and in the 1990’s it was the tech stock boom on the Nasdaq. But since the dot-com boom of 20 years ago, there’s been a void in the marketplace for new asset classes that have captured the heart of the younger generation. This is exactly what cryptocurrency is capitalizing on today, and it will continue to capitalize on this for quite some time.
2) Vision vs. Numbers
Since crypto projects don’t have 10-Q’s or 10-K’s, there generally aren’t any hard sales figures to look at when assessing a project’s potential. Instead, prices are driven by responses to questions like: does the team’s work ethic go beyond just the bare minimum marketing necessary to keep a project relevant? Is the team trustworthy and reliable? Will the team follow through on their promises? These are the types of questions that need to be asked of all investors.
3) Importance of Conferences
Conferences play a key role in the success of crypto projects. They are an excellent way for teams to provide a jolt of energy to their projects that goes above and beyond the standard online marketing campaigns. This is similar to a musician whose success depends on him being able to dually sell albums and fill concert venues. If he can’t energize people in both capacities, he won’t achieve the same level of success that he would have achieved if he were good at both. This same principal holds true in crypto. The most successful projects not only put out a good product, they also navigate the conference scene effectively.
4) Transparency with Investors
How can crypto teams create transparency with investors? Dash holds a quarterly conference call with token holders. Binance has announced plans to conduct an IPO. Other projects religious publish their developer activity on Github. These practices should be emulated by teams everywhere.
5) Team Members Scattered Everywhere
Crypto projects rarely have corporate offices. In fact, most crypto teams don’t even live in the same city as one another, let alone the same country. As such, communication amongst team members occurs almost entirely online. Conferences come into play here, because they provide an actual physical location for team members to congregate and be stimulated to get stuff done. Ethereum is a perfect example of this. The more Vitalik Buterin, Joe Lubin and the rest of the Ethereum community are around each other, the more that developers spurn into action and start building platforms.
6) Price Speculation
Price speculation plays a key role in cryptocurrency. Although some people view checking prices throughout the day as an unhealthy behavior, it’s the excitement of seeing prices rise that keeps so many people interested in the crypto space. Projects that are currently trading on exchanges – or that will be trading on exchanges in the near future – have a much better chance of succeeding than projects that aren’t.
7) Increased Diversification
Want a more diversified, lower risk portfolio? Simple: add crypto to it. It’s a statistically proven fact that the more individual asset classes held in a portfolio, the lower the overall risk factor of that portfolio. This might seem counterintuitive if an individual asset class being added is highly volatile, such as cryptocurrency. But think about crypto versus stocks. When one market is down, the other market might be up or down – its behavior is completely independent of the behavior of the first market. Adding cryptocurrency to a portfolio that’s otherwise comprised of stocks, bonds and commodities will yield an overall lower risk, more highly diversified portfolio.