This entry is part 2 of 3 in the series Bullish on Crypto

All the info from the previous article is what I knew before investing in crypto. Looked solidly bullish to me. So at this point I invested in BTC (safe and lazy choice), but you may note everything there applies to all cryptos.

After some “DYOR” (stands for Do Your Own Research, aka make your own opinion from as much information as you can find), I realized a few extra things that made me diversify with Altcoins :

  • Technology matters.

While the market cap may not be the best indicator of a crypto’s value, it still gives an estimation of its popularity. Popularity is an actual asset not to ignore when adoption is the main goal. But another important factor is the underlying technology of a crypto, of course. Different technologies means different coins can serve different purposes, too. ETH and its smart contracts, or Ripple’s usage of XRP to move money across banks are very good examples. Will BTC succeed as “Internet’s native currency” ? Maybe. Will it ever be used for, let’s say, real estate contracts ? Nope. But ETH, among others, could do that one day.

My point is : top-tier altcoins have both a decent current market cap (popularity), and potentially life-changing technologies. So their value is real, they can coexist and it’s not likely they’ll disappear like that (unlike scamcoins who naturally get wiped out during bear markets, when get-rich-quick-schemes collapse). In the long run, it is hard to predict if technological advantages will prevail or not over popularity ; but it will definitely matter.

  • Not all trading pairs are available in big exchanges yet.

Bitcoin’s current price already includes positive things that are yet to come for other cryptos. The best example is the availability in Coinbase. Everything that’s not already in Coinbase could suddenly see its price going up the day it happens (Who said early 2018 rumors about XRP ?).

  • Hardware wallets implementation is not complete yet.

Not all coins can be stored in hardware wallets now. The same way being included in the Coinbase offer helps adoption/price, hardware wallets are a real thing. And people who are reluctant to expose their savings in anything else than a hardware wallet have, by definition, a lot of money.

  • Demand/Price of utility tokens can mechanically increase.

No need for people to even know and like your coin if it’s used in a product they like and they throw money in. While it’s not as impressive as price fluctuations induced by speculation (think BBC telling the average Joe to FOMO), every single coin sold to someone actually using it contributes to drive the price up (Who said CryptoKitties ?).

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Responses

  1. sandwichbill

    Yes, I’m bullish on crypto in the long-term. We’ve got the Bakkt platform coming in November, as CFTC approval is highly likely, Coinbase introducing a 40 coin custody service for institutional investors and they are also teaming up with Blackrock to put together a BTC ETF. We just need the SEC to get there act together and introduce a regulatory framework, because the uncertainty is holding the market back.

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