Investment strategy of top DeFi projects
In yesterday's article, I wrote that DeFi as a whole is rising and its value-added space may exceed that of Ethereum. Therefore, from this perspective, if we seize the leading projects that have emerged in the DeFi field and pay attention to them for a long time to ensure that their fundamentals do not deteriorate significantly, the value-added that we can ultimately obtain from long-term investment in these projects under such circumstances Space will be great.
This determines that if we plan to invest in some DeFi projects in the long-term, we can always hold a part of the share in our hands just like investing in Bitcoin and Ethereum. As long as its fundamentals do not deteriorate significantly and its price does not deviate significantly from its fundamentals, we will hold on to this part of the share and not let go.
This is also one of my strategies for long-term investment in leading DeFi projects.
As long as the fundamentals of any token are good, its price will definitely be positive in the long run, but the process of rising is always cyclical and wavy, and the price cannot rise all the time, let alone fall. Therefore, even if we invest in such tokens at a high level for a short time, I believe that we will have the opportunity to unwind and make a profit in the future.
Bitcoin is such an investment target. Looking back on history, even if an investor bought $19,000 worth of Bitcoin at the peak in 2017, if he kept holding it in his hand and not selling it, the price of the currency in his hand would have doubled today, and the doubling time is only However, in about 3 years, the average annualized rate of return is nearly 30%-this kind of rate of return almost kills most traditional investment products in seconds. However, if the action of "holding it in your hand" is to be carried out firmly, it requires a lot of inner suffering.
To endure this torment, we need not only a will of steel, but also an extremely firm belief. This is exactly the same reason we cling to fixed investment in a bear market.
This is true of Bitcoin, and the same is true of leading projects in the DeFi field.
Readers often ask me in the comments at the end of the article, I bought DeFi’s XXX token at XXX price, is this price okay? I have DeFi's XXX token in my hand, can it still rise to XXX?
When asking this question, we can first ask ourselves, is this project I am optimistic about from the bottom of my heart? Are its fundamentals strong? Is it the head project in this field? If we calm down and answer these three questions in the affirmative, then we can rest assured that as long as the fundamentals of this project remain unchanged, even if we seem to be "quitted" in the short term, in the long run it will definitely be successful in the future. Let's make a profit.
When we have such a mentality, we can free ourselves from various emotions and anxieties, and no longer be entangled in the current market fluctuations.
There is a typical case in the DeFi project that deserves our careful study: Maker.
This is an established project in the DeFi field. This project is the cornerstone of the entire DeFi building. It is currently the first project of decentralized USD stable currency (USDC and USDT are both centralized USD stable currency). Its fundamentals have always been good, so I am optimistic about this project in the long run and invested.
Maker has also experienced sharp rises and falls in history.
In the last round of Bitcoin bull market, the price of Maker rose to a peak of $1,735 on January 21, 2018, and then went bearish all the way. The lowest point fell to $207 on March 17 last year, a drop of 88%.
However, with the rise of Bitcoin again, the bull market has reappeared. As of writing, the price of Maker has risen to $1,537. From $207 to $1537, it has increased by 7.4 times, and I believe that it will break through the previous high in this round of bull market and create another glories.
On the other hand, how many of the hundreds of tokens that also reached their peak in the same year, but then fell to the bottom in the bear market, how many have come out of the bottom to regain their glory?
I saw a project token that was well-known in the past and now ranks above 70 in market value. It rose to $83 in January 2018, fell as low as $1 in March last year, and now even if the bull market comes again, its price has only risen to $3. Is it still possible for this coin to surpass the previous peak of $83 in this bull run? I think it's highly unlikely.
Why can Maker get out of the market of Jedi counterattack that many other tokens can't get out of? The fundamental reason is because its fundamentals are good. Therefore, holding such a currency, we don't have to worry about short-term hold.
