Some of you may have decided to stake your coins, and on first look it seems like a very good idea because it allows you to basically earn interest on your crypto. In general, earning interest has always, traditionally, been a very good – and SAFE – financial strategy so that your ‘money’ (weather that is fiat currency or crytpo currency) doesn’t just sit there doing nothing. Instead it basically does a little work for you and earns you a little interest. Crypto Staking operates in a similar way to interest on a bank account, and is described in the image that goes along with this post.
Here are a couple more posts that explain how Staking works in GENERAL TERMS:
What is staking? — Bitpanda Academy
HOWEVER – in the crypto sphere and in the current world conditions there is a very big GOTCHA regarding Staking. Currently we just went through some huge mal-investment and big failures in the cryptosphere. The main culprit has been named as Terra Luna, however one of the bigger forces behind the recent market downturn was 3AC (Three Arrows Capital) and their predatory lending practices which could loosely be compared to what was being done to create the housing meltdown in 2008. The 3AC issues are not the same, but they are equally predatory to investors. This has created an atmosphere where there are a LOT of unstable and unsafe investments in the world of Crypto, and especially in ALTCOINS. Mainly the troubled category is what I call the 4W coins. These are coins that belong to the 4th wave of crypto – ALL of these are coins that have come to market in 2020 or later.Â
And this is a big problem for investors because most have FLOCKED into these new projects expecting to make massive returns. And there have been some that did make massive moves up – and then it was this exact 4W category of crypto that took the market (nearly) to it’s knees this year. AND THE FALLOUT FROM THE 3AC MALINVESTMENT IS NOT OVER. For this reason (and others) I do not think that staking is a good idea at this point in time.
The main reason for this is because staking usually locks up your coins so you do not have access to them, and as we saw from the CELCIUS issues — coins and withdrawals can be locked for a period of time. We do NOT want this!! We always want to have access to our coins and we REALLY, REALLY, REALLY do not want to just trust any of these 4W platforms with our money. Some of them are fine, sure. But as a general rule you want to be able to move your coins any time you need to. Also, at the UPCOMING MARKET PEAK – I also expect to see a LOT of trouble with this kind of thing, where coins are locked up and investors cannot get their funds out. I do NOT want this to happen to ANY of my members! So please, please, please be careful!!
This will change in the future, but for now, I AM NOT staking any coins and I would get my coins off of staking platforms. We can revisit the staking idea in 2023, but the real profit opportunities in Crypto for the rest of 2022 will exist in the realm of big swing trades.
Namaste –
Aura
**This is NOT financial advice. I am providing information and ideas about what I am personally doing in the crypto marketplace. I provice information NOT decision making. Your decisions are up to you. I am a firm beiever that better information leads to better decision making!
