The DeFi Disaster

Before you put on your first trade or buy any asset, there's one question every investor needs to ask themselves:

What's my objective?

For most investors, the answer is pretty simple. It comes down to maximizing returns and minimizing losses in a way that fits within each individual's unique preferences.

Despite this, you'd be surprised with the number of people who use the market as an outlet to express their political views rather than as a way to make money.

We're raising this today as a reminder to stay objective and always follow the money flow, rather than the opinion of journalists or analysts.

One field that crypto investors are particularly susceptible to these biases is within the decentralized finance sector.

DeFi is the darling of the crypto world.

If you bring up crypto to anyone in the financial realm, DeFi is front and center in the discussion. Knowing all the flaws and inefficiencies of the traditional industry, it could certainly help pave the way for a new financial system. I encourage you to go listen to our podcast with Jim Bianco where we discuss this very topic.

But with this all said, let's not forget our objective.

We're here to make money, not to be right.

As much as DeFi looks to have a great fundamental use case moving forward, it's actually been one of the worst areas to deploy capital in crypto over the last six months. The market cap of all DeFi tokens relative to Bitcoin has done nothing since February.