Investment Ambition and Behavior
After understanding investors’ consideration towards crypto investments, we take a closer look at what investors try to achieve with crypto investments and their investment horizon.
After a gaining deeper insights into the user journey of crypto investors and analyzing their responses, we see that the investment literacy of crypto investors are advancing with more room to mature. The bifurcation of centralization and decentralization is not clear-cut, despite holding onto ideal views of a completely decentralised space, crypto investors have understood the necessity of regulation. In addition,
CEXes have played a significant role in enhancing investment literacy for new crypto investors by creating informative and educational content for their users. However, the findings on due diligence and investment behavior shed light on areas of investment literacy in which investors can make improvement on. When making investments, Investors placed high emphasis on reputational factors, moreover the time spent on due diligence is far from sufficient.
Younger generations have also shown to be less informed when making investment decisions. As a leading crypto exchange, Bybit is fully committed to enhancing crypto investors’ investment literacy. As such, we have prepared an investment procedure checklist to strengthen your crypto investment literacy before your next investment.
1. Find Your Objective Crypto’s potential for long-term growth and diversification from traditional assets are appropriate for most users. On the other hand, when deciding to engage in short-term investments, it is crucial to identify your investment constraints, including but not limited to the maximum drawdown you can tolerate, caps on a single token’s concentration, or maximum leverage.
2. Find Your Investment Strategy Develop your investment strategies based on your expertise, whether long, short, or market-neutral. New crypto investors, however, are advised not to short frequently in order to manage risk. Harness different instruments, spots, options, futures, and perpetual to hedge risks or enhance returns.
3. Set Aside Funds for Investment Allocate an appropriate amount of investable assets to crypto investments based on your background, investment objectives, investment constraints, and investment horizon.
4. #DYOR As the crypto space grows, there will be an abundance of projects. As such, it is important to perform more comprehensive due diligence before investments to sieve out unsustainable ones from those that are profitable. Retail investors should spend a few days on DYOR to fully understand a token project. Research from Bybit or other research agencies may facilitate understanding, investors should take note to distinguish facts from opinions while reading.
5. Deep Dive into Potential Projects Once you’ve picked your project of interest, ensure that you review the projects’ technology backup, tokenomics, performance, competitor analysis, valuation, etc., on top of founders’ or backers’ reputations. Take heed of venture capitalists’ investment cost as an anchor of the token project’s fair valuation.
6. Find Your Trading Platform There are many ways one can trade crypto. However, when engaging with DeFi platforms, one might require more crypto knowledge as compared to trading on a centralized exchange. Most centralized exchanges have a variety of product offerings covering spot, derivatives, and structural products. Take note the chosen exchange’s proof-of-reserve (POR) before depositing your funds. Check out Bybit’s POR on Nansen and DefiLlama.
7 . Read Crypto Twitter Have ongoing monitoring with regular revisits of your crypto investments. Watch out for token-specific news, industry news, and macroeconomic updates. A common platform to update yourself would be Crypto Twitter. Alternatively, check out Bybit’s Daily Bits.
Remember: No FOMO, No FUD. Execute your trading according to the pre-set investment objectives, constraints, strategies, and horizon. Do not let emotions make decisions for you.
