DeFiance Capital Partner: How to Make More Efficient Crypto Investment Decisions?

It’s no secret that cryptocurrencies currently represent the forefront of technological innovation. With human and financial capital coming into the industry, it would be too optimistic to think that one person can keep up with the industry as a whole.

Twelve months ago, the game was relatively simple. Find underappreciated DeFi Tokens on Ethereum before most in the market pay attention and profit when capital finally spins. At that time, the rate of return is high and the opportunity can be effectively identified. Today, we have countless different verticals (DeFi/GameFi/NFTs) blossoming across multiple ecosystems (SOL/AVAX/ETH/LUNA, etc.).

Given the wealth of information that currently exists, identifying signals from noise is the most important skill to drive rewards. While this skill cannot be taught (one has to experience the trials and tribulations of the market firsthand), I often find it helpful to develop a process that eliminates unnecessary decisions. Below are some lessons learned from someone who has been studying the cryptocurrency market for the past 18 months.

Simplification is the key

For 99% of investors, annual performance can be attributed to 2-3 specific decisions. Go long SOL or LUNA in January, find Axie at $1, take turns leaving DeFi 1.0 after a big rally in Q1 2020…

Each of these decisions can make your year easier if you're a professional fund manager, or earn 10 times your net gain as a retail investor. While most of it is an afterthought, the point remains - each investor faces only a few key crossroads that reflect the vast majority of their returns.

The tricky part, then, is how to identify these intersections in real time. We make countless decisions every day, so it's impossible to be sure when those decisions will come. However, great investors/traders will eventually grasp this in some form (whether consciously or subconsciously).

I've never had a crystal ball or an edge for differentiation, but I've often found that pruning a decision tree helps build a clearer mindset—one that better realizes opportunities when they arise.

Betting Thinking