The easiest and most effective way to invest in cryptocurrencies

Photo by Harrison Kugler on Unsplash

Two days ago, well-known blogger He Taiji posted a message on his Weibo.

“The easiest and most effective way for lazy people to invest (in cryptocurrencies)”:

1. Hold Bitcoin and ETH for a long time

2. Invest in DeFi main sector leading tokens

3. Stablecoin Mining

The content is short, but I mostly agree with it, and it’s the concept I’ve been repeating and instilling with you all over the years, so I’m sharing it with you today.

Hold BTC and ETH for a long time

I’ve been shouting about fixed investing Bitcoin and ETHAN for almost two years, from $4,000 to $10,000 of Bitcoin.

Bitcoin has now surpassed $18,000, and the all-time peak of $19,162 is within reach. ETH has also surpassed $500, and I believe that exceeding $1,000 is the next target price to achieve.

The movement of Bitcoin and Ethereum today is a testament to the validity of the strategy we’ve been pursuing, and those of you who have stuck with the same strategy as us over the past two years have seen good returns so far.

If the fundamentals of Bitcoin and Ethereum don’t change dramatically, investing in them and holding on to them is a strategy that I think all digital currency investors should stick with forever, and they will be the ballast of our portfolios.

In this upcoming wave, Bitcoin and Ethereum could conceivably reach new highs. At that time, I will sell most of my holdings of these two tokens at a profit but still, keep a small portion. And in a bear market after the bull market, I will again practice what I have been doing for the past two years: restarting fixed deposits.

Bear betting and bull cashing out on bitcoin and Ethereum will be my way of doing this forever.

Invest in DeFi main sector leading tokens

DeFi is one of the sectors I’ve been writing about, and I’m most optimistic about DeFi within the Ethereum ecosystem, which I’ve invested in.

The reason I am so bullish on DeFi is that I believe that DeFi will be the infrastructure in the Ethereum ecosystem, they are like the building blocks of a building. The value projects in the DeFi ecosystem will be the underlying layer on which future applications will be built, and will capture the value of future applications, creating a steady stream of value for investors.

The leading projects in DeFi, like Ethereum, will gradually widen the gap between them and their competitors, and eventually, stand out from the crowd and occupy a monopoly position in the entire sector.

I’ve gone into more detail about what are the leading projects in DeFi in my November 16 article, “What are some quality DeFi projects worth investing in?”(The following chart shows the projects the author is interested in. Almost according to the TVL)

As for these headline DeFi projects, I will also be dumping at near-high prices in the upcoming market and buying back later in the bear market. They will also be targets for my long-term future holdings and attention, just like Bitcoin and Ethereum.

Stablecoin Mining

Photo by Dan Dennis on Unsplash

Mining is an emerging concept and investment approach in the current DeFi boom. The primary focus of this type of mining is to provide liquidity. By providing liquidity, we mean pledging two tokens into a liquidity pool at the same time in a certain ratio. But one of the biggest problems with liquidity mining is IL, which means that the liquidity provider will lose some of their tokens due to market volatility.

There is currently no 100% solution to this loss. However, in the case of liquidity mining with different tokens, if two stable coins of the same type are offered, IL would then be so small that it is almost negligible.

Therefore, providing stable coins to participate in liquidity mining is a better way to mine.

However, I have some reservations about this, mainly because the returns from mining are already very low, and with the cost of Ethereum gas fees in the mortgage process, the overall calculation is that if the capital is not large enough, the returns from this kind of mining are very limited.

Furthermore, if we take these stable coins and buy promising value projects at low prices, the future appreciation potential of these value projects may be greater than the gains we get from mining. The main advantage of this operation is that it is prudent and not too risky.

This approach has been practiced by many long-term, value investors, and I believe it will be accepted by more and more investors.

Article from DaoShuo Blockchain

Translated by Yang(Mengyan Finance)

To translate some latest policy and issues on blockchain and fintech happened in China