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Embracing Volatility: Lessons from Life and Markets

This article is for educational purposes and is not financial advice.

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Back in 2023, legendary anon trader DegenSpartan posted the following tweet, which carries a trojan mindset for approaching the markets, and maybe life in general.

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It hints at our craving for stability as a limitation of our potential. Inspired by this tweet, let’s explore the forces of volatility, how they shape our lives, and why embracing it might be the key to personal growth.


The Illusion of Stability

From a young age, we’re conditioned to seek stability—a steady job, a predictable routine, and a secure future. While these aspirations aren’t inherently bad, they often come at a cost. As DS suggests, we overpay—financially, emotionally, and mentally—to maintain an illusion of control.

But stability isn’t the natural order. Markets shift, seasons change, and life itself is full of uncertainty. Resisting volatility means resisting adaptation, the very essence of growth.


Volatility in Crypto and Life

As markets go, crypto is the epitome of volatility. Prices rip and r.i.p. sometimes in hours, creating constant challenges and opportunities. For many, this unpredictability is daunting, draining, and demoralising. But for those who embrace it, volatility is a feature, not a bug. It’s the catalyst for innovation, wealth creation, and resilience.

Life operates on similar principles. It’s rarely a straight line. The unexpected—a career shift, a health challenge, a stroke of chance—often defines our most transformative moments. Stability may feel safe, but it’s in the ebbs and flows where things really happen.


The Minsky Moment: Stability Breeds Instability

Economist Hyman Minsky’s Financial Instability Hypothesis argues that extended periods of economic stability encourage risk-taking, overleveraging, and complacency. When people perceive the environment as stable, they assume it will remain so indefinitely, leading to the buildup of vulnerabilities.

In financial markets, this dynamic often manifests as the boom and bust cycles—where speculative excesses build quietly during periods of stability, leading to crashes.


The Sandpile Model: Small Changes, Big Collapses

In physics, the sandpile model demonstrates how prolonged stability can mask hidden stresses. Grains of sand are added to a pile one by one, seemingly without consequence. But eventually, a single grain triggers a massive collapse.


The Second Law of Thermodynamics: Order Seeks Chaos

The second law of thermodynamics states that systems naturally evolve toward disorder or entropy. A perfectly stable system requires constant maintenance and suppression of natural forces, which is inherently unsustainable. In markets, this is seen when volatility is artificially suppressed, only for it to return with amplified consequences.


Why Embrace Volatility?

It’s Natural. As Degen Spartan points out, stability is an unnatural state. Nature thrives on cycles—growth, decay, renewal. So do we. Embracing volatility means aligning with this universal rhythm.

It Drives Innovation. In crypto, volatility fuels progress. Without the swings, there’s little incentive to innovate or adapt. In life, challenges and uncertainties push us out of our comfort zones sparking creativity and action.

It Builds Resilience. Learning to navigate volatility makes us stronger. Each setback is a lesson, and every triumph builds confidence.

It Creates Opportunity. Just as investors capitalize on uncertainty, embracing life’s unpredictability can reveal unexpected opportunities. Platitudes like, ‘the job you didn’t get mean you’re free to pursue anything you wish’ and ‘the relationship that ended will lead to better things’ are annoying, but tend to be true.


Move with the Ebbs

Embracing volatility isn’t about recklessness; it’s about flexibility. It’s about letting go of rigid expectations and learning to adapt. Here are a few helpful approaches:

Cultivate Awareness: Recognize when you’re clinging to stability unnecessarily.

Focus on Fundamentals: In crypto, a focus on the fundamentals helps you build long-term conviction. Focus on your core values and goals, even as circumstances change.

Stay Open to Change: View disruptions as opportunities rather than setbacks. Strong conviction, loosely held.

Manage Risk Accordingly: Embracing volatility doesn’t mean yolo-ing your mortgage down payment (pls dont do that). Know what you’re risking as well as your upside, and be mindful of the consequences of both.


Embrace the Flows

Reading Degen Spartan’s tweet nearly two years ago crystalized something I’d been wrestling with and forced me to rethink my attitude to stability. Instead of fearing volatility, we can embrace it as the natural state of existence—one that offers limitless potential for growth, innovation, and fulfilment. Whether in markets or in life, it’s the ebbs and flows that make the journey worthwhile.

Crypto, like life, is volatile. Accept, adjust, keep going.

Memetic Digital is a venture builder and research team focused on early stage investing.