Don’t Be Afraid of “Degen” Trading
By FriendoTrades - 15-Nov-2023
Everyone comes to crypto with different goals, skills and interests.
Navigating the market profitably and knowing who to trust or ignore online can be greatly helped by understanding the basic profiles of major groups of market participants. Some of these personas are more native to the ethos of what crypto is all about. But there is no wrong way to trade crypto.
The purpose of this article is to overview crypto participants and explore the virtues of being a degen.
Primary Types of Crypto Traders
Out of the hundreds of thousands of people who trade crypto actively, there are really three main types of market participants.
- _The Investo_r – in crypto, this type of person focuses on looking at the potential value of the most liquid and sturdy assets in the space. Based on fundamentals, vibes, memes, or any other type of analysis, they place an overwhelming majority of their bets over long periods of time and basically let the universe take over.
- The Trader – career traders in crypto usually employ tested and sometimes sophisticated trading systems to capture market movement on various timeframes. Terminals, TPO, DOM, spreads, icebergs, averages, order flow – it’s all numbers. These refined trading systems come with defined risk and reward, and they usually execute them almost robotically. If it has a price that moves, these actors will try to extract value from it.
- The Degen – this type of crypto persona often spends upwards of 9 hours a day on Twitter, TradingView, and DEX Screener. As a creature on an endless quest for alpha, the “degens” are constantly on the lookout for the next big thing. Sometimes called names like “onchain apes” or “gem hunters,” these traders always have a hope of hitting a 100x with an endgame of disappearing into the jungle with someone less mid than Margot Robbie. Becoming internet famous whilst tweeting Marcus Aurelius quotes from the sauna is a common pastime.
Most Crypto Traders Are “Degens”
It’s not unusual for crypto traders to rotate through different eras of fitting into different profiles listed above. And it’s undeniably true that most people in crypto fall into the third category – the degens. Even though the last bull market saw normies wear out terms like “WAGMI” and “degen,” the principles of a hyper-focused trader with fiscally degenerate tendencies remain as prominent as ever.
Why? Because it’s fun.
Whether everyone likes it or not, the Internet is the life force of the current culture, and crypto is the most interesting, unfiltered extension of this phenomenon. Ridiculous personalities, scandals, exploits and endless lore are part of being in this particular arena. Crypto as everyone knows it today was brought to life by some of the smartest and strangest people on the planet, and the rules are always wherever everyone makes them. It's a sight to behold, and it’s never going away.
Anyone who is fairly new to the crypto space may feel more like an observer than a member. But everyone should know that they have the power to change that. Instead of just reading memes, idolizing the early adopters, punishing themselves for missed opportunities, new traders should take time to understand why “the elders” in crypto have attracted so many followers and (usually) acquired so much wealth. Of course there are LARPs, but the one common thread through all of the true OGs is obsession. This isn’t just an obsession with money, it’s a true fascination with everything that crypto was, is and could be.
Even though crypto doesn’t always live up to every expectation, the potential of what is possible is the jetfuel that propels this entire space. Ideas, memes and potential for any asset to have the most lucrative and exciting fundamentals in the industry is everything a degen could hope for. In many ways, this was the entire vibe of “DeFi Summer” in 2020. Everything was new, fun, and absolutely ridiculous. Isn’t that what crypto is for?
Crypto thrives on irrational behavior because these inefficiencies create opportunities. It’s every trader’s job to turn those gaps into profits. No one really knows what the next big thing is – the next wave of irrational behavior. But the more someone utilizes everything available to them, the more they become an active participant of the entire crypto ecosystem. This is how anyone becomes better at recognizing emerging trends.
Fully understanding the space that you are actively trading becomes an edge.
A “degen” approach to crypto doesn’t always mean longing illiquid assets with maximum leverage. It means exploring, testing, experimenting, researching new and unproven ideas and products. Through this process, anyone will start to understand the pitfalls of crypto. And by extension, they will learn how to survive. Take note of what smaller cycle tops look like, what exhaustion and market saturation looks like on a smaller scale, and common traits across rugs and scams. All of this information takes seemingly endless hours to accumulate and no one will spoon feed it to the public.
Making money in crypto isn't all that hard, but keeping it is.
The Future Belongs to Degens
Human behaviors are incredibly repetitive, and this is why most of the charts in crypto look eerily similar. Everyone is trading attention. Understanding the future and avoiding past mistakes comes from studying history. Degenerate obsession with this emerging market of crypto is the only way to know where the attention will likely flow next and the opportunities it will create.
Humans are social creatures. Crypto is a social activity. Opt into it.