Here's why I decided to ditch my entire stock portfolio and put it 100% in crypto
Why am I leaving Traditional Finance?
I started investing in stocks at the beginning of 2020.
I'm leaving now.
My performance? Moderate: 30% in 2020 and 20% in 2021.
Still, everyone made money in these two years, so I was just lucky.
So why am I leaving?
1) The bubble is going to burst at some point.
It can be months or years. But, IMHO, this price level is unsustainable.
I prefer to look at it from the outside and take advantage of the fact that I was lucky that the crash did not catch me (at least fully, I’ve suffered the past few weeks).
2) Time
I put a LOT of effort and resources into analyzing companies, selecting assets, and diversifying my portfolio.
All for a return that is practically risk-free in crypto (I'm not going to get into the risks of Defi now).
Also, in cryptos you can’t catch a break. I went on vacation for a week and crypto went from Defi, to Defi 2.0 and even Defi 3.0.
It's amazing how much time it takes to stay up to date with crypto. Therefore, I had to cut time from somewhere else...
3) Values
This is a little less rational and more sentimental. But is it wrong to invest in the things you believe in?
Money is king, I always had that clear. But if you can combine values with returns: no brainer.
For example there is KlimaDAO. They are dedicated to reducing the supply of carbon credits on the market, and as a consequence it is more expensive to pollute!
Or why would I invest in gold as a reserve of value, if I know that mining companies pollute and do not provide good working conditions?
Why better not invest in Bitcoin or Ethereum to reserve value?
4) I lost the fear of being wrong
I am 26 years old, I don't have to take care of anyone and I have a stable job.
If I make a mistake, I will learn the necessary lessons.
What did I do wrong? What can I do differently next time?
This has to do with the paradox of error: the more you fail, the more you set yourself up for success (as long as you learn in the process).
If I am correct, I will probably have earned financial freedom at a very young age.
That's what asymmetric investing is all about: you can only lose what you put in, but the profits can be exponential.
5) I am psychologically prepared
I can stand the volatility.
I understand that it is a market that is moved by whales and that in one day it can drop all 20%.
Someday the market will mature and be more stable. Today you have to bear it to succeed.
The key, for me, was to understand the fundamentals of the projects that I invested in. Fundamentals matter, specially in crypto winters.
Twitter: @JuampiAranovich