Welcome to another Nugget of Wisdom! A free weekly post I send out every Thursday. These are designed to be short and sweet, a quick read to (hopefully) impart some sort of wisdom, or at the very least to get you thinking about something interesting.
A mistake that I see most people in crypto make — especially those who are new but not that new — is to always be searching for alpha. The total noobs don’t even know what alpha is, but once someone figures it out, it’s all they can think about.
I want the alpha! I want to know what tokens to buy. I want to know what narratives are popping off, and what’s going to pop off next. I want to know what tokens are undervalued. I want to know what airdrops to farm. Where do I find the alpha?!?!
The reality is that there’s absolutely no shortage of alpha these days. There’s infinite content out there, and a lot of it genuinely is very good. The problem isn’t that there’s not enough, the problem is that relative to all the other content out there, the ratio is shrinking.
One of my favourite articles is The Dark Forest and Generative AI which discusses the future of the internet being an increasingly life-like but life-less state — aka overrun by bots, algorithms, and engagement farmers. The humans, the genuine content, the real alpha will largely be found in a layer beneath that, in the cozy web.
We’re still at a point where there’s tremendous value to be found on platforms like Twitter — but it is getting harder and harder to find. Ask anyone that’s been around CT for a while and they’ll tell you that the quality and experience has basically only gotten worse over the years (this is partially due to the above theory, but also due to the Geeks, MOPs, and Sociopaths theory too).
What’s the solution? For starters, curating your information flow should be a top priority for everyone spending time online these days:
Letter 60: Curating Your Information Flow
Beyond that, it’s understanding and accepting that when it comes to crypto alpha, you are much better off specializing and focusing on a particular area or sector rather than trying to be across everything everywhere all at once.
In the early days of crypto there weren’t many opportunities. It was Bitcoin. Then came Ethereum and a few other chains, but still there weren’t that many opportunities. Then came ICOs and the number of opportunities ballooned, but it was still a drop in the bucket compared to today.
Then came DeFi Summer, and NFTs 2021, and then all the L2s, and all the new L1s, and AI, stablecoins, gaming, marketplaces, liquid staking… the list goes on. Today there are a near infinite number of different areas to focus on, and a near infinite number of opportunities within those areas. This is something that is only going to get worse over time too.
Instead of trying to catch every narrative, pick one or two sectors and focus on those. Set some goals and be clear on them, and then be vigiliant and dilligent about not straying (easier said than done). Focus on high quality content over engagement farming meme bites, and recognize that alpha is everywhere; alpha is cheap these days.
Clarity, focus, and alpha without noise.
That’s the real alpha now.
Thanks for reading! In case you missed it, check out Monday’s post below 👇
Letter 70: Growing your Portfolio from $0 to $10m+
One of the toughest things when it comes to writing in crypto is that everyone is in a different situation, and so the advice that might be best for one person is very often not the best for the next person. There’s many reasons this can be the case — how much time a person chooses to spend in the space, their risk appetite, their current level of knowledge, etc.
