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Why I Never Recommend Investing in Crypto
đȘ Stablecoins: Crypto's Killer Use Case, Pendle: Crypto Yield Trading đŸ
gm friends â
With the first presidential debate on Tuesday and the Fedâs first rate cut (probably) quickly approaching, markets are gearing up for a wild week. Letâs dive in!
Todayâs topics:
đ« Why I Never Recommend Investing in Crypto
đȘ Stablecoins: Cryptoâs âKiller Use Caseâ
đŸ Pendle: Crypto Yield Trading
Check out this weekâs YouTube show for a deeper dive!
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Why I Never Recommend Investing in Crypto
Prices are down significantly from their 2024 highs, and investors are losing confidence in an imminent crypto bull run.
While the negativity is everywhere, I havenât been feeling much fear or doubt, which I found interesting. âWhy am I not depressed that I âlostâ so much money?â, I wondered.
âMaybe crypto has calloused my sensitivity to money so much that I no longer feel the psychological pain of losing itâ, I proposed.
But, this didnât feel right - I definitely still experience the pain and euphoria from the wild swings in my net worth. So, what is the root of my stoic attitude? Conviction.
Crypto investing is hard. Markets are extremely volatile, scams are everywhere, and the technology is confusing.
This is why I almost never recommend investing in crypto when people ask.
If you arenât used to the volatility, youâll get scared on the first big dip, sell, and end up losing money
If you donât understand why what youâre buying is a good investment or your timeframe for that investment, youâll never make it through the inevitable tough times.
You must cultivate conviction - itâs an independent act. I canât transmit you mine.
So if youâre reading this and thinking about investing in crypto, donât do it unless youâve truly developed your own conviction in the space.
Stablecoins: Cryptoâs âKiller Use Caseâ
Skeptics love to argue that crypto lacks âreal-world use casesâ or a solid "product-market fit." Hereâs why theyâre wrong.
Firstly, Bitcoinâs inception marked the creation of the worldâs first digital, non-sovereign, censorship-resistant, permissionless store of value.
Iâm not here to convince you why thatâs important (not today at least) - but if youâre curious, research the history of currency debasement and capital controls.
But on a more relatable level, the tokenization of assets offers the promise of a global settlement and interoperability layer for all financial assetsâ the only thing preventing this is innovation-stifling, luddite regulationâŠ
The only tokenization market that has been allowed to develop so far is stablecoins.
Stablecoins, pegged to fiat currencies like the U.S. dollar, have experienced explosive growth and are providing real utility by enabling global access to stable currencies, fast settlement, and integration with decentralized financial tools.
The rise of stablecoins is hard to ignore. The stablecoin market has grown to ~$170 billion, with daily transaction volumes surpassing those of many sovereign currencies.
And this growth isnât speculativeâitâs driven by real-world demand for fast, low-cost, and borderless transactions. Stablecoins allow users to bypass the inefficiencies of traditional banking systems.
In developing countries, stablecoins have become a lifeline for individuals seeking access to stable currencies in the face of hyperinflation, economic instability, and capital controls.
By offering an easy way to store value in U.S. dollars and other stable assets, stablecoins provide financial security for millions who otherwise lack access to reliable banking services.
As the stablecoin market continues to grow, itâs becoming increasingly clear that tokenization is cryptoâs most successful and promising use case .
Whether providing financial stability in developing nations or enabling seamless, borderless transactions for businesses and institutions, stablecoins are proving their value every day.
And with ongoing regulatory discussions aimed at fostering responsible innovation, the role of tokenization in the global financial system is only set to expand.
Trade Section
Unfortunately, the update is not complete just yetâŠ
But the good news - the revamped trade section will help you keep tabs on cryptoâs hottest narratives/trades/sectors. Stay tuned đ!
Pendle: Crypto Yield Trading
Overview |
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What is it? Pendle is a permissionless yield-trading protocol. By tokenizing yield-bearing assets and enabling the trading of their principal and yield components, Pendle allows users to execute advanced yield strategies such as earning fixed yields, leveraging yield exposure, or providing liquidity for additional rewards. . |
How does it work? đ Yield Tokenization: Pendle takes yield-bearing assets (e.g., stETH) and wraps them into standardized yield tokens (SY), compatible with Pendle's automated market maker (AMM). These SY tokens are split into two components: Principal Tokens (PT), which represent the principal value of the yield-bearing asset, and Yield Tokens (YT), which represent the right to claim the yield generated by that asset. This process of tokenizing yield allows for the separate trading of yield and principal, creating new opportunities for yield optimization and speculation. . đž Pendle AMM: Both PT and YT can be traded via Pendleâs AMM, enabling users to enter or exit positions based on their yield strategy. Traders can lock in fixed yields by purchasing PT or speculate on future yield fluctuations by holding YT. The AMM automates these trades, providing liquidity and price discovery for yield-bearing assets. . đ vePENDLE Governance: Pendle also features a governance system powered by vePENDLE, a token that gives holders voting power and a share of the protocolâs revenue. vePENDLE holders can direct incentives to liquidity pools, receive boosted LP rewards, and earn a portion of the fees generated from swaps and yield trades. . |
How can you use it? 1. Maximize Your Yield: Tokenize your yield-bearing assets (e.g., stETH, aUSDC) on Pendle to split them into PT and YT. Trade PT to lock in fixed yield or hold YT to benefit from future yield accruals. . 2. Earn Passive Income: Provide liquidity to Pendle's AMM and earn swap fees, protocol rewards, and additional incentives without needing to stake your LP tokens. . 3. Govern and Earn with vePENDLE: Lock your PENDLE tokens for vePENDLE to vote on liquidity pools, boost your LP rewards, and earn a share of the protocolâs revenue from YT fees and swap fees. 4. Optimize Yield Strategies: Explore various yield-management strategies such as fixed yield, long yield, or liquidity provision. Customize your approach based on market conditions and your risk tolerance. .. For additional information, see Pendleâs official documentation. |
Other News
Check out this weekâs Mid-Week Crypto Update for more news stories!
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