The Transformative Power of Cryptocurrency: 7 Resolutions for a New Year
As we usher in the new year, it’s an ideal time for crypto enthusiasts to reflect on their approach to the digital asset market. Whether you’re a seasoned investor or a passionate newcomer, adopting meaningful resolutions can help you thrive and shape the future of cryptocurrency.
1. Be More Vigilant for Scams, Rug Pulls, and Dumb Tokens
Despite countless warnings and educational resources, crypto scams continue to claim victims at an alarming rate. The severity of this issue was starkly illustrated on November 14, when a record-breaking 31 rug pulls occurred in a single day, resulting in cumulative losses of $15 million that month alone.
The distribution of rug pulls between mid-October and November Source: TenArmor
Most recently, the Hawk Tuah (HAWK) dump was a sobering reminder of how many people willingly ape into tokens that are obviously terrible ideas, if not outright scams. Following HAWK’s launch, its market capitalization skyrocketed to $490 million, only to crash by 91% to $41.7 million in less than three hours.
Do your research, be skeptical toward promises of quick profits and remember that scammers prey on people’s greed – so be fearful when you notice yourself getting greedy. Even seemingly legitimate projects backed by known figures should be scrutinized as closely as possible.
2. Transform Your BTC into a Passive Income Opportunity
Bitcoin (BTC) has evolved over the past year into something greater than a mere store of value (SOV). While critics once pointed to Bitcoin’s limited functionality compared to other blockchains, the landscape has changed dramatically with the emergence of innovative layer-2 (L2) solutions and smart contract platforms.
Projects like Stacks, Rootstock, Liquid, and Babylon have redefined Bitcoin’s capabilities, bringing sophisticated DeFi functionalities (referred to as BTCFi) to the network, effectively bridging the gap between Bitcoin’s robust security and Ethereum-like programmability. This enables everything from yield farming to lending and liquidity provision.
BTCFi total value locked since Q1 2023 Source: DefiLlama
Numbers-wise, the market has responded emphatically to these developments, with the total value locked (TVL) across all Bitcoin-based DeFi protocols surging from $306 million in Q1 2024 to an impressive $7.4 billion by year-end.
3. Use Your Crypto Knowledge to Educate, Not Pressure
There remains a fine line between sharing insights and proselytizing to a point where others invest in something they don’t truly believe in. As a result, historically, the most effective crypto advocates have been those who have focused on explaining the technology’s potential and real-world applications while acknowledging its risks and complexities.
Instead of promising quick profits or pressuring friends and family to invest, crypto enthusiasts should consider sharing their journeys, lessons learned, and factual information with their peers – thus helping build credibility for the entire ecosystem while respecting everyone’s individual financial decisions.
4. Upgrade the Security of Your Crypto Assets
Portfolio consolidation and secure storage have never been more important. Rather than spreading one’s funds across 620 little-known tokens stored across multiple exchanges and hot wallets, investors should consider consolidating their holdings into a carefully selected mix of proven cryptocurrencies and storing them in cold storage solutions.
Popular hardware wallets like Ledger and Trezor are the gold standard for storage thanks to bank-grade security solutions for digital assets, protecting them from online threats while offering complete control over one’s private keys. This shift toward cold storage solutions has gained momentum, with the amount of BTC held across different centralized exchanges (CEXs) having dropped to historic lows over the last 12 months.
5. Explore Alternative Use Cases for Your Crypto
With a growing number of brick-and-mortar retailers integrating crypto payment solutions into their digital frameworks, it’s an ideal time to explore alternative use cases for your crypto holdings. US-based convenience store chain Sheetz recently announced that it had started accepting Bitcoin and Ethereum payments across all 750 of its stores.
The travel industry has also embraced this technological revolution, with platforms like Travala.com accepting crypto for hotel bookings and flight reservations among other things. Consider using your crypto to book a trip or purchase everyday items from retailers who accept digital tokens.
6. Diversify Your Crypto Portfolio
In the past year, we’ve seen significant fluctuations in cryptocurrency prices, making it essential to diversify your portfolio by investing in a mix of established and emerging assets. Don’t put all your eggs in one basket – instead, consider spreading your investments across various sectors, such as DeFi, gaming, or social media platforms.
7. Share Your Crypto Knowledge with Others
Crypto enthusiasts should consider sharing their knowledge and experiences with others, helping to build credibility for the entire ecosystem while respecting everyone’s individual financial decisions. Share your journey, lessons learned, and factual information with your peers – this will not only help others but also contribute to the growth of cryptocurrency as a whole.
As we embark on this new year, it’s essential to remember that cryptocurrency is a constantly evolving field, filled with both opportunities and challenges. By adopting these resolutions, you’ll be better equipped to navigate the market, spot financial opportunities, and make informed investment decisions.
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