How to spot the signal and the noise when the market is rising

In rising markets, both signal and noise increase.

Signal:

• The maturity of technology expands adjacent possibilities

• More and more talented teams are launching interesting projects

• Price reflexivity leads to more widespread interest and usage

• Experimentation is accelerating; new best practices are emerging

noise:

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

• Everyone is publishing a story, a token, and the token goes up

• A range of projects raised high-priced funds

Because everyone in the crypto space is an investor to some degree (whether through holding tokens or founding/operating a startup), it is important to analyze increased volume with a balanced view of short-term opportunities and a rigorous eye for long-term opportunities.

I try to remind myself of the following principles:

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

• Hot projects are more likely to encounter adjustments due to black swan events.

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

• When working with a partner, it’s important to understand what game they primarily play.

Having been in the crypto industry for a decade, I am still investing for the long term. That being said, it is important to understand the game at hand - and sometimes the best way to understand the game is to play it. There is a signal in the noise. But don't lose track. Use your time wisely.