Vitalik Buterin is a computer programmer and writer, better known as co-founder of one of the most significant blockchain the world, Ethereum. Some of his achievements include:
- Co-founding Ethereum, which has revolutionized the crypto industry by offering a platform for decentralized apps and smart contracts.
- He won the World Technology Award for IT software in 2014, when he defeated Mark Zuckerberg.
- Vitalik Buterin has been awarded a fellowship worth $100k by the Thiel Foundation.
- He has been involved in projects like Plasma, a scaling solution for Ethereum, and has actively advocated for privacy and security-enhancing technologies.
Vitalik Buterin offers four pieces of financial advice for investors to help them minimize the risks due to volatility in the crypto market.
On January 7, famous blogger Alex Voight published his opinion on social media X about Bill Gates’ diversification strategy. Blogger pointed:
“After Bill Gates became friends with Warren Buffett, he began to diversify his portfolio and sold Microsoft shares. Bill Gates’ fortune today is 138 billion dollars, if he hadn’t diversified it would be 1.33 trillion dollars. Be careful with diversification and with friends who recommend it.”
In response to that, Vitalik Buterin criticized advice as an awful one and shared his own “actual finance advice” with people.
Here’s a detailed look at them:
“Diversification is good.” Diversification is a basic principle in investment. Diversification of your own portfolio by spreading investments across various sectors helps to mitigate risks. Expand your portfolio by buying different types of tokens, including stablecoins (Tether, USD Coin), utility tokens (ETH, WBT, CHANCER) or even AI coins (FET, OCEAN,RNDR). On another note, WhiteBIT exchange introduced a Sub-Account few days ago. Sub-Account it’s an intelligent way to diversify your portfolio. Account of crypto platform Nexo on X supported Buterin and wrote “Don’t trust, diversify.”. At the same time, diversification in trading could be a distraction. That’s what crypto trader John Brown published on his X, recently.
“Save. Get to the point where you have enough to cover multiple years of expenses. Financial safety is freedom.” He underscored the importance of having a reasonable saving reserve. This principle is about creating financial safety that can cover several years of expenses. There is no guarantee in investing, so you have to save more in order to help shield from such problems in investing. A good example is the user, who said he can’t use Vitalik’s advice anymore, because he over invested in ETH and now his everyday routine is checking ETH price in hope it’ll become higher. However, do not forget that holding 96% of your cryptocurrencies on cold wallets is an exceptional security method. Statistic phishing scams by Chainalysys shows that $347 millions was stolen in 2023.
“Be boring with most of your portfolio.” Risk and return usually go hand-in-hand in investing. So Buterin pointed to having a “boring portfolio”. The idea of a boring portfolio suggests to focus on stable and reliable investments that often lead to long-term gains. Nowaday, the quantity of assets is huge. But in my opinion, AI tokens are a new future and best choice to “bore” your portfolio. They leverage AI to improve users’ experience, scalability and security within blockchain networks. Several AI Coins have been identified as having potential in the market and offering various applications, such as SingularityNET, Fetch.ai, Cortex.
“Don’t use >2x leverage. Just don’t.” The tech warns against high leverage in trading, especially using over 2x. This point is appropriate, specifically in the context of crypto trading, where high leverage could be the reason for significant losses. Some users in the comment disagree with that advice and think bigger leverage is more worthy: “Everything you said except leverage, use 50x make the profit choke” or “it’s 125x or nothing”. But you have to be careful with extensive leverages. Sometimes risks could cost you a lot of money.
Not all investors were pleased with his advice. Crypto investor CoinMamba noted in comments that advice is good only if you are already a millionaire and it doesn’t apply to someone who’s only trying to get rich.
Buterin’s financial advice is a precious resource for both novice and seasoned investors. It reminds us that sometimes the simplest advice could be more useful than complex one.
Disclaimer* Always remember to do your research and trust only verified information.
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