Perspective: Go Where You're Valued Most

Image by HeungSoon from Pixabay

Imagine you are looking for a new job. You find three different companies you'd like to work for and go through the application process. Being a quality candidate, all three companies offer you a job. For simplicity, let's say each job offer is identical except one offers $50k/yr, one offers $55k/yr, and the third offers $60k/yr. Which one are you going to choose? Again, without any outside considerations (benefits, commute time, size, opportunity for advancement, etc) it's a no-brainer, right? You're going to choose the one that pays you the most money. Why? Because they are obviously going to give you the most value for your time and effort.

So why hasn't the financial world figured that out yet? There are trillions of dollars floating around in world economies, a sizable percentage of which is sitting in fiat currencies on balance sheets around the globe, but those dollars aren't being valued. They're actually being DE-valued. "Safe" investments in sovereign debt are paying next to nothing and even, in some case, yielding negative results. Money markets pay nothing. Savings accounts pay nothing. In the meantime, governments are flooding the economies with more currency "supply", decreasing the value of the currency you already have. It makes no sense.

Where Crypto Comes In

With the advent of the defi boom, cryptocurrencies are actually paying people for putting their capital at risk with them. You can "stake" your capital and make 3%, 6%, 10%, 20% and even higher depending upon how much risk you're willing to take on. If you buy in early, while there is a higher chance of failure, you are rewarded with a higher return. If you get in after it's more well-established, the return is lower, but it's STILL a positive return. And a very nice one compared to what's out there in the "real" financial markets.

Why are these cryptos paying you so much to "borrow" your capital? Because they "value" it. It's what helps them do the things they want to do. With your capital they can increase the value of their network thus increasing the value for everyone using it. It's how it's supposed to work.

What you see happening now is the beginning trickle of what I think will become a massive flood over the next few years. Capital, like water, is going to follow the path of least resistance. As the barriers to entry become easier and easier to deal with, more and more capital will flow downhill into this industry. This is where it will have the most value; where it can do the greatest good. This is also where that capital will be most valued; where it will receive the highest return.

Image by Stefan Keller from Pixabay

People aren't stupid. They're going to see the writing on the wall as to where our current economic crisis is coming from and they're going to go where they're most valued. You want to be there when the floodgates open.

That's MY perspective. Thanks for reading. As always, comments are welcomed and appreciated.

Per usual, I'm not a financial advisor and this is not financial advice. Cryptocurrencies can and do go up and down and you could lose all your money. Do your own research.

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