Variant Fund Co-founder: How to grasp the signal and noise when the market rises

Author: Jesse Walden, co-founder of Variant Fund; Translation: 0xjs@黄金财经

As the market rises, both signals and noise increase.

Signals:

• Technology matures, expanding adjacent possibilities

• More talented teams are launching interesting projects

• Price reflexivity drives more general interest and usage

• Experimentation accelerates; new best practices emerge

Noise:

• More mercenary teams start hot narratives; copy-paste projects

• Everyone launches a story, a token, and the token goes up

• A range of projects raise high-priced rounds

Because everyone in crypto is an investor to some degree (either through holding tokens or founding/running a startup), it’s important to have a balanced view of short-term opportunities and a rigorous eye for long-term opportunities to analyze increased volume.

I try to remind myself of a few principles:

• Short-term token prices are not indicative of long-term success.

• Hot projects are more likely to experience corrections from black swan events.  

• Time management is critical in a high-noise environment: measure time spent on the short game and the long game. Ignoring one is dangerous, confusing them is even worse.

• When working with partners, it’s important to understand what game they’re primarily playing.

After a decade in the crypto industry, I’m still investing for the long term. That being said, it’s important to understand the game at play — and sometimes the best way to understand the game is to play it. There are signals in the noise. But don’t get lost. Use your time wisely.