How to invest in cryptocurrency with "track thinking"?

Yesterday I wrote that investing in cryptocurrencies requires bold breakthroughs in thinking and tolerance of some "incredible" projects. This is actually a kind of thinking of venture capital investment projects.

Venture capital started on the Internet, and now it is widely infiltrated into cryptocurrency investment. Regardless of whether it is in the traditional Internet or in the field of cryptocurrency, the vast majority of projects invested by venture capital are projects in the very early stages of development.

Many projects at this stage may touch future industries and unknown areas. Since the development of these projects is still extremely immature at this stage, their future development and future profit model are all facing great uncertainty. This kind of uncertainty will either cause the project to die quickly, leaving investors with nothing; or make the project lucky to become the pioneer and leader in emerging fields, allowing investors to obtain huge returns.

In the field of cryptocurrency, the current investment in DeFi projects clearly has this characteristic. DeFi is a brand new field. How will the future development of various tracks in this field be? It is still in the stage of a hundred flowers blooming. Everyone is still exploring and practicing. Although some leading projects have emerged, there are still blanks in more fields .

If we observe carefully, we will find that the positions of ordinary investors and venture capital in many DeFi projects are basically the same. Except that venture capital capital has a little advantage in terms of token prices, and can invest in projects one step ahead of ordinary investors, in other aspects, especially the uncertainties, risks and benefits faced by the project, we ordinary investors and venture capital have no Not much difference.

Because of this, cryptocurrency investment gives retail investors the potential to "explode" that other investment markets do not have, giving us the opportunity to enjoy huge profits similar to venture capital.

But in order to be able to enjoy this kind of potential huge profits, we cannot completely follow the thinking of the traditional investment market in investment, and we must use the thinking of choosing a track to analyze the project.

The so-called track selection thinking, in my opinion, depends on whether the problem to be solved by this project is a brand-new problem that no one else has touched; it depends on whether the project can develop into a field and an ecology.

Here I cite a case of Zhang Lei from Hillhouse Capital.

When Liu Qiangdong was looking for investors to invest in, he said that JD.com also needs to do logistics in order to be a shopping mall. Many other investors do not understand this model, thinking that it will cost a lot of capital, and they already have other express delivery, so why do they need to do their own logistics? Therefore, many investors rejected JD.com.

And when Liu Qiangdong found Zhang Lei, Zhang Lei suddenly thought of a regret that Amazon's Bezos once talked about. Bezos said that when he was doing Amazon, he also wanted to do logistics to make Amazon run more efficiently. But it is a pity that there is already a behemoth DHL in the United States. If Bezos wants to do logistics, the possibility of success is extremely low.

But in China at that time, although there were various express companies, none of them had become a giant, and what Liu Qiangdong wanted to do was "Amazon + DHL"? Once this track is successful, its future will be limitless.

So Zhang Lei bet heavily on JD.com, this is the track thinking.

I still use the examples of AMPL, NSURE and COVER mentioned yesterday.

AMPL is a project of the stablecoin track. On this track, only MakerDAO is currently in the leading position and is a blockchain project, but it still has some obvious problems, and its leading advantage is not insurmountable. Other projects are still in the competition stage. In this case, new projects such as AMPL have the opportunity to grow and develop.

NSURE and COVER are projects of the insurance track. There is less competition on this track at present, and there is only one NXM that is slightly famous. But the problem of this project is so big in my opinion, so there are still a lot of opportunities for latecomers to emerge, so for projects like NSURE and COVER, it is worth taking a risk to participate in the early stages of their launch.

Once there are projects with unshakable advantages in these fields, the track they are on will bring unlimited returns to investors. Therefore, when we look at these projects, we must not only look at the characteristics of the project itself, but also look at the characteristics of the track. huge potential.