CeFi stands for Centralised Finance. Using these services means you're giving custody of your crypto to a company. If the company goes bust/gets shut down/your account gets blocked, you could lose your crypto. In that way it's similar to traditional banking.
DeFi stands for Decentralised Finance. These services are non-custodial i.e. through the magic of blockchain you retain custody of your crypto — no third party is looking after it. You don't have the risk of a company going bust/getting shut down, and no company/government can stop you from accessing your crypto. Just don't lose your private key!
| Strategy | CeFi option | DeFi option (keep your private key safe!) |
|---|---|---|
| Just buy and hold BTC/ETH |
Buy BTC/ETH from one of the platforms on the left, then send it to a wallet: |
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| Buy an passive index |
Metastrategy is my strategy on ICONOMI. It's an automated strategy with daily rebalancing that is always an intelligent mix of the current top performing strategies, and is thus a great 'set-and-forget' option. This is my top recommendation for those new to crypto investing. See here for a step-by-step guide to investing in Metastrategy. You could also invest in 3-5 of the current top performing strategies. If you choose this option I recommend you manually rebalance every 3-6 months (i.e. move your money out of any strategies that are now no longer in the top 5 and into the current top 5). |
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| Buy an actively managed portfolio/fund/strategy (read about active vs passive investing) |
These are all early stage and I haven't yet used them myself. |
If you do choose to invest, consider dollar-cost averaging (investing equal sums of money at regular intervals) rather than going all-in.
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