Good day everyone,

I hope you are all well and had an excellent week, welcome to CryptoGod-1’s blog on all things crypto. In this post I will be looking at the recent 'financial advice' given by Ethereum co-founder Vitalik Buterin, and why people were unimpressed with what he had to say.

Vitalik Buterin is NOT a Financial Advisor

Vitalik Buterin, the co-founder of Ethereum, recently shared his views in terms of financial advice when he responded to a post on 'X.' The famed cryptocurrency creator was quick to point out he considered the post awful advice, and went on to give his four points on what he considered to be good financial advice. He offered what he considered practical financial advice compared to what the original tweet had stated.

The tweet in question was posted by @alex_avoigt, a blogger, influencer, YouTuber, Engineer, Sportsman, Thinker, Nerd, Environmentalist, and BEV Enthusiast. The post noted how Bill Gates’ fortune today is 138 billion dollars, but that it could have been much, much more had he not listened to the advice of Warren Buffett and diversified his portfolio back along the way.

In his response Vitalik Buterin noted how it was awful advice, and instead gave his four key points on what he considers successful strategies for investing. The post had warned users not to diversify their portfolios but Buterin's very first point was the opposite.

1- Diversify

The very first point focused on the polar opposite of the original tweet. Buterin noted how there is value to be found in diversification. He considers this a part of strong financial planning, and is a strategy which involves spreading investments across various assets. Buterin did not specify that this should be applied to crypto alone, instead he noted that it is a good option. Considering we live in an era where new investment opportunities emerge daily in this digital era, spreading assets across various sectors and assets can be crucial in mitigating risk. When a user diversifies their portfolio they are making sure the impact from any single investment will not cause devastation in a users portfolio. It aligns with traditional investment strategies, which have often been applied to the stock market in the past, but given the volatile nature of cryptocurrencies it can help to make a users overall portfolio more resilient​​​​​​.

2 - Save

The second point of the tech visionary focused on the importance of saving. This is a cornerstone of any practical method of improving ones financial position. He advised accumulating enough to cover several years of expenses, which is easier said than done. While this approach would provide financial safety, it would also offer freedom and reduces stress during economic downturns​​​​. With job markets and economies becoming more and more unpredictable, it is a simple yet clear reminder that financial security involves more than just mere wealth accumulation.

3 - Be Boring

The third point in Buterin's post focused on having a boring portfolio. What he means by this is quite simple stick to the basics. Many crypto enthusiasts are determined on becoming a millionaire overnight, and in doing so they enjoy the thrills of high-stake, high-risk investing. His advice focuses on investing in low-risk, stable assets that yield steady returns over time. It is an interesting and smart piece of advice, but also goes against the high-risk, high-reward strategies often associated with cryptocurrency investments​​​​. The investors who throw their money into what they hope will be a sensational story of being an overnight millionaire are few and far between, and while its the biggest lure of the cryptocurrency industry, being wise and boring could be the better strategy.

4 - No Leverage

His final point focused on trading without making use of leverage. He is steadfast on this point, pointing out that anything over 2x is considered excessive leverage. He noted how leverage amplifies both gains and losses while it can also lead to significant financial losses. This is a risk many take, particularly when dealing with cryptocurrencies, as they looking to benefit with high levels of gains in such a volatile market. However, Buterin noted that being responsible with ones investment practice and prioritizing long-term stability over short-term gains is the best mode of succeeding. It emphasises a balance approach in the fast-paced modern digital environment. This pragmatic perspective, which looks at blending traditional investment strategies with insights relevant to the modern digital age can give a new perspective for both traditional and seasoned investors.

When considering his four points, one would think my heading of "Vitalik Butern is NOT a Financial Advisor" has been misplaced and ill-advised. However, while his points do emphasise the importance of investment diversification and smart investing, it also brings up a topic of importance which should not be ignored in this context. Buterin made his money from co-founding Ethereum, and not from investing. Yes, he has made money from investing, but he achieved his millionaire status by creating. 

Many on 'X' were quick to point this out, with his advice of savings to have enough money to cover a number of years consideribly easier for a person in his position than the everyday person. Some noted how it is good advice only for those who are already a millionaire and not somebody who is trying to get rich, while others pointed out the vast majority of his wealth came from Ethereum.

Another user was quick to note that it was good advice from Buterin and that it should be followed. However, they also speculated that if Bill Gates had not diversified, potentially Microsoft would not have reached the value it did and he would not have made anywhere near what he has in terms of his fortune. It is all the unknown really, and anybody who follows this advice from Buterin will always be able to find a way of contradicting it.

Diversify, and then find that the one coin you did like skyrocketed while the others didn't.

Save, and discover that if you had invested that money it would have been worth more.

Be boring, and you might find that a risky investment you steered clear of to remain boring would have been the jackpot.

No leverage only to find that if you had leveraged you would have made a lot, lot more profit.

All in all investing is a risky game and there is no guarantee that any strategy will work. All anybody can do is ensure they have their own trading style and strategy which they are confident and believe in. At the end of the day you cannot spend your time blaming others, or having regrets, if you are following your own advice. Buterin is a man worth listening to, no doubt about that, but at the end of the day the only financial advice people should follow is their own. 

Have a great day.

Peace. CryptoGod-1.

Referral Links and Follow Me:

Linktree