You should not invest in crypto

Yes you heard that right. You should not “invest” in crypto. Curious to know why?

Cryptocurrencies and crypto tokens are not financial instruments in the traditional sense of the word. As a result, if you put down money to buy them, an investment professional will not be able to tell why you made a profit. As investors we need a solid logical rationale for investing and crypto cannot give you that with the traditional framework.

Buying tokens is not an investment. It is a “pledge" to support a community or a project that is fundamentally changing commerce as we know it. You shouldn't invest in crypto unless you understand what you're getting into.

First and foremost, if you don't find a project exciting, don't put down your money. Many people get caught up in the hype and invest in projects that they don't fully understand. This can be a costly mistake. Unlike traditional investments, the value of a crypto token is attributable to things other than just “profits” and “revenue”. 

Native crypto folks are engineers who are building the next form of the internet where we can transact with more trust, decentralisation and transparency. They are not creating financial instruments that adhere to traditional investment principles. 

To put it simply, investing in cryptocurrency is a bit like being asked to believe in the possibility of flying machines (what we now call aeroplanes) when all you've ever seen are cars. Imagine that you have only seen cars in your life and suddenly, two random brothers from Ohio come forward and say they can make you fly. Are you the kind of person who would have believed them? In hindsight, yes, you would have, but in that moment when you had never seen a flying machine, would you have believed it? My guess is that 99% of us would not have. If you belong to that category of folks, do not invest in crypto. It isn't mature enough for you.

If you are not passionate about the project you are investing in, or if you do not have a solid understanding of the underlying technology, then you should avoid investing in cryptocurrency. Instead, focus on building your traditional investment portfolio, and keep an eye on the developments in the crypto world. Who knows, you may find a project that excites you and decide to pledge your support. But until then, it is best to sit on the sidelines and watch the game unfold.

None of the material shared here should be construed as financial advice. It is purely educational in nature