This post first appeared on Warpcast.

In an up market, there is an increase in both signal and noise.

Signal

• technology maturing, expanding the adjacent possible
• more talented teams are starting interesting projects
• price reflexivity leads to more general interest and usage
• velocity of experimentation accelerates; new best practices emerge 

Noise

• more mercenary teams start hot narrative; copy-pasta projects
• everyone is launching a narrative, a token, and the tokens pump
• a flurry of projects raise overpriced rounds

Because everyone in crypto is an investor to some degree—whether by holding tokens or starting/working on a startup—it’s important to parse the increased volume by taking a balanced view of the short-term opportunities and a disciplined view of the long-term opportunities.

A few principles I try to remind myself of:

• Short-term token prices are not indicative of long-term success.
• Projects that burn white hot are more likely to experience black swan corrections. 
• In a high-noise environment, time management is paramount: measure time spent on short-term games vs. long-term games. It’s perilous to ignore each, and worse to confuse them.
• When working with partners, it’s important to suss out which game they are predominantly playing.

Ten years into crypto, I continue to play the long game. That said, it’s important to understand the game that’s on the field—and sometimes the best way to understand it is to play it. There is signal in the noise. But don’t get lost. Spend your time wisely.

+++

This post is for general information purposes only. It does not constitute investment advice or a recommendation or solicitation to buy or sell any investment and should not be used in the evaluation of the merits of making any investment decision. It should not be relied upon for accounting, legal or tax advice or investment recommendations. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment. Certain information contained in here has been obtained from third-party sources, including from portfolio companies of funds managed by Variant. While taken from sources believed to be reliable, Variant has not independently verified such information. Variant makes no representations about the enduring accuracy of the information or its appropriateness for a given situation. This post reflects the current opinions of the authors and is not made on behalf of Variant or its Clients and does not necessarily reflect the opinions of Variant, its General Partners, its affiliates, advisors or individuals associated with Variant. The opinions reflected herein are subject to change without being updated.