Investing for the long term, instead of using leverage on minute charts for short-term gains, is a much more prudent strategy for those looking to make it big in the crypto market. Since over ninety percent of all hopeful crypto traders end up losing money when trying to time the market, long-term horizons are the only way to go. Anthony Lesoismier, the chief security officer and co-founder of the crypto app Swissborg, swears by it. Last week, he sat with Alex Fazel of the crypto edutainment platform CryptoNites, in order to share market tips and tricks for those just beginning as traders and investors. His focus was how to be successful in the notoriously volatile crypto market. Lesoismier started out as a quantitative analyst for hedge funds back in 2008 and worked in sales trading for the next nine years or so. Lesoismier pointed out that the attitudes of the current culture were part of the reason why investors were failing to make the right choices for themselves, and many had not even considered the actual risks underlying their investments. “I think we have a thinking system that does not encourage people to think by themselves. Let me give you an example: If you go to see a professional investor, he will tell you that you must diversify. So, you must take this much money to invest, and you should take a bit of that and a bit of that. Even if you don’t believe in it, you should invest. For example, if you have 100k to invest, you should buy 80% of US Treasury bonds, 10% of Tesla, and 10% of the S&P. When we calibrate this kind of portfolio, we can fairly say that you’re not going to lose more than 10k, 10% of your portfolio. But if you don’t believe in it, the risk address return would not be good again.”
Lesoismier further explored his point by stating, “So when you invest in Bitcoin at $1,000, visualize that if it goes back to zero, then your risk is $1,000. But what is the probability that it goes above $2,000? What is the probability then of (it) going to $10,000 and (your) making $9,000? When you think about it, there are few assets with this property where you can get it, (and it) can go much higher, or it goes down, right? So now Bitcoin is at 30k, what’s the probability that it goes to zero or it rises above 60k? And of course, the more major an asset becomes, the less symmetry you will find. One of the examples: If you look at the Bitcoin charts, you can see who the public movement is and all these things, but maybe you can learn from the future market. Between the spot market and the futures market, when the spread is really high, it means that there is a huge demand on buying the future market, which means that people are rushing to buy the market, (and) they don’t care about the price, they’re ready to pay a premium,” Lesoismier was herein suggesting how investors could use such data to determine which direction a market trend could end up forming.
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Kaynak: https://www.blockleaders.io/digital-asset-insights-21/
