Don’t let FTX’s crash distract you
Though damaging, the collapse of the FTX-Alameda empire in the long-term is a ‘sleight of hand’ that you should not allow to distract you. Yes, there’s been a pain. Yes, there may be more contagion. But it’s time to park it and focus on what survives. The FTX story is a failure of centralized entities and not one about the collapse of an entire industry.
The thing to remember is: even in the current bear market, crypto is still a trillion-dollar market.
With that in mind, a more pertinent question is, ‘Is the bottom in?’ Perhaps, we’ll look back and see that the FTX debacle did mark the bottom. Probably not. The one thing I’ve learned over the past year is that when the bottom is being called, the chances are it’s going to take one more dip shortly after. But if the bottom is not in, I would suggest that many indicators show that it’s probably close to being in.
This then means it may be a good time to think about altcoins and your investment strategy over the next 18 months. But only if you have the spare capital. And never have all your eggs in the alt-coin basket. Yet if you can afford to invest, there are potentially some good upsides over the next 18 months.
To further put things into a perspective, if we look at some tokens, and if they were to get back to HALF of their All-Time Highs over the next 18 months:
Other Potential Gainers
The layer ones are generally the safest plays, of course. Followed by the layer twos like Polygon (MATIC). And the bulk of any capital should be deployed in these areas. That is, unless you can afford to play at the casino, and lose. Other interesting areas include store of value, oracles (LINK being a solid steady type), and Defi.
DEX tokens could be a very interesting area. A potential positive from the FTX’s mess could be an acceleration in the use of decentralized exchanges. Could it be their time to shine? They have certainly enjoyed a bounce over the past weeks. Other areas include cross-chain, like gaming, infrastructure, and file storage.
Points to consider should you be itching to deploy your capital:
- In regards to the bottom, perhaps wait for the final confirmation to be in. Yes, you may lose out on some percentage gain but by waiting you’ll help ensure you don’t lose if the market takes one more dip. So, in the meantime monitor sectors and space, and try to anticipate what’s going to be hot and what’s not during the recovery.
- Smaller caps can run a lot faster and higher than a lot of larger caps. It’s all about risk and returns. The further you go out on the risk curve, the higher the volatility. The higher the volatility the higher the potential return. You have to consider your own circumstances and make reasoned decisions.
- Keep a time frame of 18 months. This might seem like a lifetime to a Zoomer but it’s nothing in the markets.
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