Yet another crypto central exchange failure.
2022 has been brutal — Terra Luna, Three Arrows Capital, Celsius, Voyager, FTX (of course, FTX, the “Enron” of crypto failures) and now AAX…
Time to re-emphasise a few key points in the crypto-sphere:
1/ crypto is about personal empowerment and one of the key aspects of that is self-custody. In other words, get those tokens off of those centralised exchanges (CEXs). CEXs aren’t sexy, and shouldn’t be viewed as such. They are merely a platform to transact in crypto. Nothing more. Nothing less.
2/ leverage has no place in the crypto world. Crypto is volatile, we all know that (although recently it’s been reported that bitcoin has been less volatile over the past 6 months than NASDAQ … but I digress). Such volatile assets — when combined with leverage — usually ends in tears. John Maynard Keynes is attributed for saying “the markets can remain irrational longer than I can remain liquid”. With crypto, this is 1000x true. And leverage annihilates one’s personal liquidity with ruthlessness abandon.
3/ average cost into long term positions. I learned years ago the best way to buy equities is to (i) pay yourself first and (ii) “fire and forget”. What do I mean by this? Automate monthly investments into your own investment thesis (e.g., stocks, bonds, gold, crypto, etc) and then forget about it on a monthly basis. Revisit your investment thesis quarterly or, better, annually.
4/ HODL — only invest what you can afford to lose and don’t track daily price vol.
Of all of the above points the most important is — get your damn tokens off those damn CEXs!