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Author : Ben Krypto 9 Jan 2018
Interoperability (cross chain communication). Stability (reducing the volatility to allow some crypto to be used as legit alternative currencies to fiat). These three issues are some of the most pressing and must be tackled. My personal investment strategy is to select ICO’s and invest in cryptocurrencies that aim to provide real solutions to this. I’ve placed some big bets on some of these investment themes over the months, anticipating the market would move towards these trends, and I have been very right so far. There are other areas that show potential and may be lucrative investments. What are some potential big market trends to get ahead of? Alternatives / Rivals to Blockchain tech. Currencies (better versions of Bitcoin, to be used for day to day spending). Money Remittance (optimizing money transfers by solving inefficiencies). Crypto Lending. Supply Chain. Dex (Decentralized Exchanges). There are obviously many other areas that show a lot of promise for blockchain disruption, but these are the ones I feel are most relevant and likely to be the first. Well what about all these disruptive Decentralized Apps (dApps) people keep talking about? I’m not sold on dApps right now as viable. In general, I avoid most appy cryptocurrencies out of habit. The reason being that most dApp-based currencies are money grabs and have no need of an actual token to function. My reasoning is that when the market corrects and the value of blockchain tech is based on what the cryptocurrency has achieved in the marketplace (i.e. the business fundamentals of the company behind the app), most dApp tokens will collapse in price.
There is also the issue where blockchains are simply to slow to run most of the dApps being proposed today. Ethereum was brought to its knees by cryptokitties last month. If one of the top blockchains can’t handle a few thousand users hammering the network, what do you think will happen if an application with a few hundred thousand users starts sending out transactions over the ethereum network? Catastrophe, that’s what! Even worse, scaling solutions for ethereum are years away. The good news is that there are some solutions now such as the new working blockchain Zilliqa that have solved the scalability (Zilliqa supports 2500 transactions per second via sharding) which comes out January 25. However, scalability will prevent dApps from being practical. At least for a few years. This is why I don’t invest into 99% of the dApp ICO’s or cryptocurrencies. 3. MARKETCAP MATTERS. Marketcap plays a significant role in your return on investment (ROI). Simply put, the lower the marketcap, the more room your coin has to grow. There are exceptions, however. The recent (as of the time of writing this article) pump of Ripple from .35c to $3 has brought the market cap of ripple to that of Bitcoin. Prior to this, it was generally more profitable to go into LOW cap coins rather than high cap coins like Ripple because to see multiples (2x, 3x,4x, etc), the market cap of a coin had double, triple, quadruple, etc. However, we’ve seen coins that were 20 billion jump to 100 billion in days. So marketcap in this wild bull market is less important than it was. But you should still consider an ICO’s market cap very important.
The lower the marketcap, the more likely you are to see huge returns. For example, if an ICO has a marketcap of 10 million, it’s ‘easier’ to see a 10x gain to 100 million than an ICO that comes out at 100 million from ICO that must go to 1 billion. Again, there are exceptions such as hype, market conditions and so on, but this rule of thumb is generally true. So let me repeat: lower marketcap is always better than higher market cap when considering your ICO choice. What’s a good marketcap? ‘A good market cap’ depends entirely on how much money is in the market. January 2016, an ICO that tried to raise 5 million would have been absurdly high with crypto only being valued at a few billion. Fast forward nearly two years later and the market cap is getting close to 1 trillion. So a reasonable market cap for ICO’s depend on the current state of the market and what the total market cap is. The higher the market cap for crypto, the higher a marketcap ICO’s will likely be right out of the gate. Now, I feel it’s a very bad thing giving these ICO teams absurds amounts of money when most of them are little more than ideas without a working product (and in many cases, without the means to actually achieve what they promise). What I Consider Good Market Caps for ICO’s. As of January 2018, a smaller ICO market cap would be between $40 million to $60 million. A big market cap ICO would be 60 to 90 million and a ‘big’ market cap ICO would be 90 million+. Some ICO’s that were ‘big’ market cap ICO’s would be Tezos, Polkadot, and Status.
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