Cryptocurrencies

Small Altcoin Investments – a case study

Thanks to the Bitcoin Cash hard fork, I ended up with a little cash in hand.

Before going further, let’s drill down into that statement and analyse the latest BCH/BCHA saga.

Bitcoin Cash and Bitcoin Cash ABC

I have already sold my Bitcoin Cash ABC, in fact, I sold it as soon as I noticed that it was possible for me to do so (I didn’t have much BCH so I sent it to Binance to handle the logistics of the fork for me). I sold BCHA for two reasons: firstly I don’t see it becoming a popular coin which will sustain a high price, and secondly because I don’t support Bitcoin Cash ABC’s proposal which resulted in the fork.

Moving outside the box and looking at the issue: when your “miner fee” proposal is rejected by the resounding majority of miners, it wasn’t a good proposal! I’m disappointed to see that the proposal was nevertheless pushed ahead and executed, but I’m very pleased to note that it was rejected. I consider this to be not only a victory for (the proper) BCH, but also for decentralisation and for crypto in general.

In an era when Central Banks are racing to adopt CBDCs and impose new digital currency regulations, it is heart-warming to see how the nexus of the crypto community still clearly has its focus in the right place.

As for my Bitcoin Cash, I will return it to my cold wallet and continue to HODL it.

NOTE: this is not to say that BCHA won’t go through a quick hype-based price climb, but whether it does or not, I really don’t care. I’m officially done with BCHA, as far as I’m concerned, it’s history: another BSV-style coin for the shitcoin trash can.

Altcoin buying

Based on the pro-BTC bias observed during the early stages of the previous bull run, I’m currently holding onto my BTC for dear life and am not trading it into altcoins. It is evident from recent price actions that this bias is once again present in the market.

Unlike with BTC, I feel comfortable reinvesting “free money” like this in altcoins. As much as I know that BTC will be out-performing most altcoins for the next few months, I still want to take the opportunity to purchase oversold/under-bought bargain coins while some “blood in the streets” remains.

That raises the tricky question of “What to buy?” – a question which I did NOT find easy to answer! In fact, it was such a tricky question that I decided to sleep on it while my funds lay in BUSD overnight.

As the altcoin market continues to mature, so I continue to adapt my portfolio accordingly. There are definite patterns (for want of a better word) emerging, categories of coins/tokens which look as if they will outperform others. For now, the coins which seem to have the brightest futures, at least for the time being, are Platform coins, Exchange coins and Payment/Fiat bridge coins.

It is vital to note that other categories which are under-performing should still wake up later – Logistics coins (e.g. VeChain), Gaming coins (e.g. Enjin coin) and Privacy coins (e.g. Monero) all being the excellent examples of that. I would not suggest selling off such coins if you happen to hold them.

Platform Coins

As attractive as they may appear, Platform coins can be difficult to buy. The reason for this is simple: the good ones are already expensive, the cheap ones are probably bad, and the new ones come with the risk of being untested and a high chance of failing to succeed or gain traction. If you get really unlucky (or follow hype too much) you can even find a few bad ones which are expensive…

For this reason, especially with only a few dollars in hand, Platform coins are not a suitable investment for me at this time.

Exchange Coins

These are similar to Platform coins, but with the added complexity of a deeply flooded market and of the DEX vs CEX conundrum.

As with platform coins, I already hold the coins of all my favourite projects (DEXs and CEXs). Putting a few more dollars into any of those isn’t going to make a discernible difference.

With the market already so flooded, putting money into start-ups or into ultra-low market cap exchanges is a waste, they are too liable to fail. After a good night’s sleep, I was able to realise that exchange coins are also not the right investment for me.

Payment/Fiat-bridge Coins

With increasing interest from institutional investors, and with new retail investors yet to arrive, Payment and Fiat-Bridge coins are looking like solid, high-return investments. The considerable interest displayed towards Paypal’s frankly pathetic crypto offering should be evidence enough of this fact!

Unlike Exchange and Platform coins, Payment/Fiat-bridge coins remain, for the most part, undervalued. A few, such as MCO, have done well, but I am absolutely certain that more are to follow. For this reason, the Payment/Fiat-bridge coins sector is where I elected to spend my money.

I already own enough UTrust (UTK) and Request Network (REQ), so I ruled those two out. I hold TenX (PAY) too, but remain disappointed with the development of the product, so that was not an option. MCO is already too expensive to buy into with only a small investment.

This led me to my favourite shopping area in the current market: the $5 000 000 –> $50 000 000 market cap zone. This zone corresponds roughly with the coins ranked 150th to 500th by market cap. I feel really comfortable shopping in this zone because I believe it to offer the best Risk vs ROI, at least until the altcoin surge occurs (during which time even some of the worst coins will probably offer great ROI at low risk). The coins lying between positions 150 and 500 on the market cap ladder are usually too big to have gotten there by luck or chance, and are too small to be expensive.

Decisions Decisions

Having eventually decided on which type of coins to buy, I needed to decide on specific coins. To make this decision, I needed to include one final factor: I wanted coins which were cheap at the moment, ones which were in a dip. I struck gold.

Not only did I find two coins which were in a price dip and located at either side of my 150-500 market cap shopping zone, but they were also both coins which I already held a small position in, and they were both available on Binance (where my BUSD shopping funds were lying)!

Some perspective: It is important to remember that if you hold only a small number of coins on an exchange, moving those coins can cost you a considerable portion of their value. A coin like TenX is worth about 1/100th of what it was at ATH. If you bought $1000 worth of a coin like that in early 2018, and then left it on a CEX, it would only be worth about $10 today. Moving it could easily cost you 20% of your TenX bag in transfer fees alone! For this reason it makes sense to top up small coins which you believe in, then if you do want to move to a wallet/staking platform etc, you’ll lose a smaller percentage of your investment in the process. I have a couple of coins on Binance which have devalued so much that Binance keeps offering to dust them into BNB! It’s simply not economical to move those coins, trading them will nett me hardly any investment capital, and I’ll also forego the opportunity of them possibly (and in some cases probably) regaining their former glory and relative value.

So my final decision was to buy two Payment/Fiat-bridge coins, both of which I already hold small amounts of, both of which are undervalued and both of which can be bought on Binance.

I’m not going to go into them in detail, that’s up to anyone who is deciding for themselves what to buy, but here’s a brief overview of what I walked away with:

The first one was Voyager Token. Sporting the ticker “VGX,” Voyager Token still goes by the ticker “BQX” on Binance (a throwback to its original name “Bitquence”, that was even before it was called “Ethos”). I bought VGX a few months ago, so I got away with doing very little pre-buy research. I merely checked that the project was still active and on-track (which it is). It’s also going through a “merger” of sorts at the moment, which appears to be well-planned in terms of token allocation (token holders won’t be diluted) and which should prove to be mutually beneficial to the investors of both projects (Voyager has bought out LGO token and is integrating it). The market cap of Voyager lies just South of $30 000 000 and (and this is a huge bonus!) the maximum possible number of minted tokens are already in circulation, so there can be no dilution of my VGX holdings over time.

The second project I bought into was Everex (EVX). On paper Everex is similar to Voyager, though tends to get less international recognition, possibly due to being headquartered in Singapore.

OPINION: the Western Hemisphere crypto world still greatly under-values projects which originate in the Far East. It does so at its own loss. I tell you again: there are damn good reasons that NEO is my platform coin of choice, location factors into those reasons. When I put the word “futurist” on my profiles, it isn’t because it looks fancy or sounds cool. It’s because I look far ahead when I make projections!

The market cap of Everex is about $5 600 000, with over 87% of the total supply already in circulation. This makes Everex immensely under-valued (though it does enjoy popularity in Singapore and has won significant accolades), but at a slightly higher risk. I do already own a fair amount of EVX, but decided that at such a low market cap, it was worth adding a few more coins to my stack.

Both Voyager Token and Everex have phone apps, here are the links for the Google Play store apps:
Voyager Token
Everex

Voyager Token also has an Apple app too, with the Everex one still being in development.

Conclusion

Well that’s a bit of insight into my latest crypto trades, I hope that it may help you when making your own investment decisions.

Again I apologise to all my readers for blogging so infrequently of late, I try to get a few Tweets or Tweet comments out when I can, but finding time for blogging at the moment is a near-impossibility while I’m still playing the roles of nurse-to-an-injured-wife and every other role around the house. I’m expecting things to normalise about three weeks from now, when I can (hopefully) shed the role of “taxi”.

Final word

The post I’m really itching to write, but haven’t yet found the time, is about the latest Bitcoin price developments. It’s important that people do not expect either a constant price climb, or that this is the start of the real climb. These are still the early stages of the positive part of the market cycle and should be treated accordingly. Please remember that.

Yours in crypto

Bit Brain

“The secret to success: find out where people are going and get there first” 

~ Mark Twain

“Crypto does not require institutional investment to succeed; institutions require crypto investments to remain successful” 

~ Bit Brain

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