Category: cryptocurrency

Cryptocurrencies are like stocks

Something that lots of new entrants to the cryptosphere don’t understand is that the coins and tokens we (sometimes blindly) invest into, are like stocks. We are directly investing into an idea, a solution to a problem, a product, or all of the above. It is vital to do your due diligence in researching what each individual coin represents. I wish someone would make a consolidated website with a little blurb for each coin so new people can at least get an idea of what they’re investing into, rather than blindly throwing money at coins like darts on a board.

If I cannot explain to a friend in less than 10 seconds what a coin represents, then I shouldn’t be investing in or recommending it. In order to be able to do that, you should read whitepapers, projected road maps, the team’s social media accounts, and get different opinions from other investors.

2018 thoughts on Cryptocurrency

There are about 25 “alt” coins that I want to get in on based off of information, speculation, and fear of missing out on “the next Bitcoin”.

I currently have money in 6 different cryptocurrencies, but want to diversify that to 20-25 by the end of the month. Some that I’m interested in aren’t easily acquired at the moment as they aren’t on a major exchange. I sold off all of my Bitcoin at a loss in order to invest into other coins/tokens that have more potential for 10-100x movements. It’s hard to imagine Bitcoin hitting 6 figures this year, and even if it did reach $100k per coin, that’d be a 5-6x return at most. Obviously, that’s an excellent return in hindsight, but I have the risk tolerance to try one of the budding alt coins and I believe in their use cases more than I do in Bitcoin.

I’m currently most hyped about Stellar Lumens and Request Network. I find their whitepapers and roadmaps easily digestible and they seem to have great project leadership. One of the, perhaps unfortunate things about Bitcoin is that it’s pseudo-anonymous leader “Satoshi Nakamoto” is probably no longer with us. What this means is that when somebody like Charlie Lee of Litecoin or Roger Ver of Bitcoin Cash goes on CNBC to promote their own coin or talk bad on Bitcoin, there’s nobody there to fight back and defend it.

I find the debate of Bitcoin to be quite interested. One topic that is often discussed on Reddit, forums, and various podcasts is the high and low prediction for Bitcoin during 2018. Some say a high of $50-100k per coin with a low of $10k. Others aren’t so high on it and predict a high of $20-25k with a low of $7-9k. It’s not hard to imagine one of the other top 5 coins overtaking Bitcoin. Bitcoin started 2017 with 86% market share and ended with 36%. All it will take is a dip in Bitcoin to $10k and Ripple or Litecoin mooning at the same time. I think once Bitcoin is overtaken, even for a split second, this could potentially be “the end” of it as a currency. People may just lose faith in it. At the moment, it seems like there are major problems – network congestion / delays and high fees. Bitcoin could cost 50x+ as much to transfer between exchanges versus something like Litecoin. Other coins are even cheaper and faster – some, like Raiblocks are even free. On the opposite end of the spectrum, a major dip in Bitcoin could cause a lot of people to buy back in and shoot it back to the top.

One thing that remains to be seen is just how much institutional money will enter this year. Crypto at $677B market cap is still in it’s infancy stage and that’s less than 1% of worldwide market cap. As more and more people, especially those who are older, learn about Crypto, I think they’ll enter the space by purchasing Bitcoin by default.