Final Friday, I launched Momentum Grasp — an idea of shopping for cryptocurrencies utilizing a easy set of technical evaluation guidelines.
In brief, don’t purchase momentum property in the event that they don’t have… properly… momentum.
That explains #SafeMoonSqueeze’s muted reception final week. Very similar to final April’s #DogeDay occasion on Twitter (NYSE:TWTR), the concerted effort was met with an enormous fats investor yawn. Creating memes is one factor. Getting others to commit real-life cash to a made-up asset is sort of one other.
I’m not ruling out an eventual return of SafeMoon (CCC:SAFEMOON-USD). Stranger issues have occurred. However SafeMoon wants excess of a wily Twitter marketing campaign to restart curiosity.
In the present day, we’re going to try 5 alt-Doge cash that may do higher.
Rising Stars: The Alt-Doge Revolution
Earlier this month, crypto investor Chris Williamson grew to become an unintentional trillionaire after a Coinbase (NASDAQ:COIN) glitch misquoted his $20 Rocket Bunny funding by a decimal level or 10. Whereas Coinbase quickly corrected the error, many different alt-Doge buyers have seen equally lopsided positive factors.
There are all the time realists, in fact. Tyler Cowen at Bloomberg not too long ago printed a chunk titled “What the Crypto Crowd Doesn’t Perceive About Economics.
“Lots of you don’t perceive financial economics very properly,” he pooh-poohed. “First, the greenback is just not on the breaking point, nor will it’s changed by a crypto asset. … A second level, oft uncared for within the crypto group, is that crypto costs received’t proceed to go up perpetually at excessive charges.” And maybe that’s true for mega-cap Boomer Cash.
However folks shopping for altcoins (significantly Sh*tcoin aficionados) aren’t precisely attempting to behave like economists. Contemplate Exhibit 1.
As an alternative, these speculators are shopping for lottery tickets. It hardly issues that these tokens have nearly no real-world use. If it seems like the subsequent 1,000x Dogecoin (CCC:DOGE-USD) or Safemoon, punters will wager no matter they’ve.
I’m not going to fake as if I can predict the subsequent trillion-dollar winner. There are 1.1 million Ethereum (CCC:ETH-USD) and Binance (CCC:BNB-USD) tokens out globally, and solely 705 (or 0.064%) have a market capitalization above $1 million.
However I can provide you with some patterns that tilt the percentages barely extra in your favor. In any case, 0.064% continues to be a one-in-1,560 likelihood of selecting a winner — far larger than the one-in-844,512 odds of successful $50,000 within the Powerball lottery.
- Copycat Names. Alt-Doge buyers are a surprisingly conservative bunch in the case of shopping for what they know. So Shiba Inu (CCC:SHIB-USD) will naturally outperform one thing like Lamp888Token.
- Cult Following. Tokens depend on content material creators to unfold the phrase — the extra rabid its fanbase, the better the possibility of making viral memes.
- Momentum. Folks purchase cash which might be going up, so I received’t contact something that hasn’t proven no less than a 40% value improve in current weeks. (See final Friday’s e mail for extra about momentum).
That helps slim the sphere significantly.
- BabyDogeCoin (CCC:BABYDOGE-USD). “If you happen to like Doge then you definitely’ll fall in love with Child Doge Coin,” the token’s web site proudly states. They definitely have a degree; the Binance token has already amassed 50k followers on Twitter and has 100,000 holders. Its comparatively small $23 million market cap additionally offers this a possible 100x upside.
- Shikoku Inu (CCC:SHIKO-USD). Crypto copycat builders have wasted no time in creating the subsequent Shiba Inu / Dogecoin lookalike. SHIKO is especially egregious, copying 97.1% of SafeMoon’s underlying code (which itself is a replica of RFILIQ). It even brings a number of the spelling errors of the unique work. Maybe it’s going to have a few of that value magic too.
- Rabbit Finance (CCC:RABBIT-USD). The leveraged yield farming token has amassed 85k Twitter followers in stunningly brief order. With yield farm APRs exceeding 100%, it’s not exhausting to see how crypto speculators would possibly flip this new animal into the mascot of the crypto kingdom.
- Goes Up Increased (CCC:GUH-USD). Some builders have absolutely embraced the shoulder-shrugging motive why cryptos go up. Nevertheless, GUH’s crew has taken it to a different stage. By burning consumer tokens, GUH ought to theoretically sometime attain Bitcoin’s price-per-coin.
- Bonus: WTF Token. Walnut.Finance turned heads final week when a tank-top-wearing fan took to the Belgium/Finland Euro 2020 subject. “Sporting a swimsuit and selling a web site referred to as ‘WTF Coin,’ … the girl jumped the gates and jogged onto the sphere.”
Are these cash value something? In all probability not. It’s exhausting to think about a world the place copycat tokens do a lot for society.
However is placing in $100 in these a greater guess than Powerball tickets? I’d guess so.
Falling to Earth: Boomer Cash Proceed to Slide
It’s not simply Bitcoin (CCC:BTC-USD) that’s feeling blue as of late. Up to now week, 70 of the highest 100 cash by market cap have misplaced cash. The Grayscale Bitcoin Belief’s (OTCMKTS:GBTC) $24 billion property beneath administration (AUM) is barely larger than in the beginning of the 12 months.
Moonshot buyers largely don’t appear to care. Their $0.02-$0.07 Dogecoin entry costs imply most early buyers are nonetheless deep within the black. Solely the latecomers are licking their wounds.
However Bitcoin’s stagnation may imply a brand new “crypto winter” for different currencies too. An analogous shakeout in 2018 despatched altcoins right into a multi-year deep freeze as buyers pulled cash out.
In different phrases, don’t purchase “blue chip” cryptocurrencies as a result of they appear safer than altcoins. When a deep freeze occurs, not even Bitcoin is safe from the reckoning.
Are you trying to add extra threat? Alex Sirois explores 10 new penny stock names that might go 10x.
Will any altcoin finally eclipse Bitcoin? Chris MacDonald isn’t so certain. However he does have some steering for these seeking the next king of cryptocurrencies.
And at last, are you able to keep away from crypto taxes whereas saving a creating nation? Joanna Makris weighs in on the rise of “Bitcoin citizenship” and offers pointers for anybody who’s dreamed of working an under-the-table offshore sportsbook.
By the Numbers: Chance and Payoffs
|$60,000||Bitcoin goal value by J.P. Morgan strategist Nikolaos Panigirtzogloy. “If Bitcoin isn’t capable of break again above the $60,000 mark quickly, momentum alerts will collapse, in flip resulting in a cascading downdraft,” he wrote in April.|
|-36%||Losses seen by Bitcoin buyers since Mr. Panigirtzogloy printed his be aware.|
|-69%||Losses by SafeMoon buyers had they purchased the cryptocurrency on the time. The J.P Morgan be aware coincided with SafeMoon’s peak value.|
|500%||Acquire by buyers who purchased into FEG (Feed Each Gorilla) Token. Smaller altcoins have changed extra vital tokens and cryptos because the dominant speculative performs in current weeks.|
Closing Ideas: Having the Conviction to Promote
Once I purchase a brand new funding, I typically have a smile on my face. That new holding may in the future turn out to be value a brand new automotive. Possibly even a brand new home. It’s all potential when that profit-and-loss column nonetheless reveals “$0.” (These with children may also have felt that have earlier than).
However saying “goodbye” to an funding isn’t all the time as straightforward. Not even for me.
That’s as a result of promoting entails locking in income or losses. The second you’ve pulled the set off, all that limitless potential disappears. It means perpetually lacking out on any future upside.
But, Momentum Masters will know that promoting is as necessary as shopping for. When momentum property decelerate (or mean-reverting property go up), it’s higher to take income than to take a seat on a sinking ship.
FREE REPORT: 17 Reddit Penny Shares to Purchase Now
Thomas Yeung is an knowledgeable in the case of discovering fast-paced development alternatives on Reddit. He really useful Dogecoin earlier than it skyrocketed over 8,000%, Ripple earlier than it flew up greater than 480% and Cardano earlier than it soared 460%. Now, in a brand new report, he’s naming 17 of his favourite Reddit penny shares. Claim your FREE COPY here!
On the date of publication, Tom Yeung didn’t have (both straight or not directly) any positions within the securities talked about on this article.
Tom Yeung, CFA, is a registered funding advisor on a mission to carry simplicity to the world of investing.