A Guide to Sustainable Crypto Investments

In the dynamic digital asset market, the stark reality is that for every two digital assets launched, only one survives.¹

The phenomenon of survivorship bias underscores the importance of being discerning when investing in cryptocurrencies.  Digital assets are characterized by high volatility and rapid evolution, and investors must be cognizant that a risk-free trade does not exist.

In this thought leadership paper, we delve into navigating coin selection for investment, unveiling three characteristics that increase a token’s odds of survival. Understanding market risk, can minimize investment risk for investors that want exposure as digital assets continue to deliver outsized returns compared to other asset classes.

History Repeats Itself, Trajectory of the Web and Crypto

When the internet arrived, it revolutionized everything. In the unfolding digital revolution, Web3 has turbocharged decentralization as the blockchain is paving the way for equalized access to goods, services, and experiences. What has not changed is investors seeking investment opportunities, injecting billions into emerging blockchain companies just like they did internet stocks in the 1990s.

What is substantially different in this current iteration of the web, is decentralization. Blockchain is likely to replace the centralized server as the standard backend to almost all online systems as it offers more security and increased privacy for the individual user, but more importantly, it provides efficiency and transparency.

The rise of the internet drove massive asymmetric growth, revolutionizing infrastructure and connectivity, and impacting and forever changing the way we conduct business.  

During the 1990s, there was an unprecedented number of internet-based companies founded, often with little more than an idea and a ".com" in their name. Not wanting to miss out on the digital gold rush, investors pumped money into companies with unsustainable business models that were unprofitable.  It's estimated that by 2004, more than half of the dot-com companies went bust.³ Despite the high failure rate of internet companies, the era also gave birth to companies like Amazon, Facebook, and Google which became industry giants.

The uptick in the adoption of digital assets mirrors

the trajectory of internet users.