Have you missed the crypto currency investment opportunity?
The most successful crypto investors in the market today, are not the big whales such as Michael Sailor, Elon Musk and Grayscale who only recently joined in the fray by investing millions, but those who purchased Bitcoin at under $100, and are now comfortably reaping the benefits of their foresight.
The advantage of being an early entrant to any technology vertical is that you are continuously given opportunities, over and over again. For those of us that missed the Bitcoin (BTC) frenzy, we were given a second chance with Ethereum (ETH); the inventor of smart contracts, launched in 2017 at U$ 2.77. It was still below U$ 150 in January 2020! Yes, if you could have purchased 33 ETH for a mere $5,000 in 2020, you would be sitting on U$ 85,000 even during this market correction. Binance smart chain (BNB) was the next missed opportunity. BNB launched in late 2017, and was trading below U$2. A year ago, it was trading below U$20, meaning a U$ 5,000 investment at the time would have yielded a return of U$ 87,000+ too. Similarly, there have been numerous coins that have yielded 1,000x return in 2021, though most of us missed the opportunity.
Is this the end? Can you still have that life changing experience from Crypto? The simple answer is YES. We can draw many examples from the tech space to gain this confidence. The very first desktop computer was launched by Olivetti in 1964, but HP catapulted it to the masses, growing even bigger once Microsoft started to develop their software. Nokia was the leader in Mobile phones, but had the rug pulled by a then unheard of Korean company, Samsung. Yahoo and AOL who dominated the search engine space during the dot com bubble was pushed by a simple search engine; Google. Facebook came in much later than their competition too. This is the beauty of tech, if you are an early adopter, it keeps giving you opportunities to progress.
We can be certain by now that blockchain tech is here to stay. It is being adopted by many enterprises and governments embracing the new transactional internet. I would urge you to read one of the best books written on this subject, Blockchain Revolution by Alex and Don Tapscott which provides a very comprehensive explanation of a blockchain driven future. Transacting in this space has also become more reliable, with reputable exchanges offering easy purchasing of crypto using fiat currency, and secure storage from a range of wallets. With cryptocurrency stepping into mass adoption, there are some very promising projects emerging into the limelight. The key to investing now, is to invest in projects that have good fundamentals.
If you are considering investing in the present, keep an eye out for prominent projects that will change the technology space. Below are my personal picks, which I have selected based on personal research. This new breed of blockchain is focused on solving interoperability and sustainability issues that plagued the earlier generations such as Bitcoin and Ethereum.
Cardano (ADA), which is currently trading below U$2: What’s good about Cardano? Cardano is one of the most prominent blockchain projects to follow Bitcoin and Ethereum. The project was built from the ground-up by a team led by Charles Hoskinson, a co-founder of Ethereum. Cardano belongs to the third generation in blockchain technology, which includes platforms like Polkadot and Cosmos. To understand more on the project, take a look at my previous post here.
The next is Polkadot (DOT): Yet again a project launched by a co-founder of Ethereum (ETH certainly seems to have HR issues), Dot’s introduction of para chains to the blockchain ecosystem will unify many solutions, enabling the success of real world integrations. They are also funded by the W3 organisation, which is a big positive.
And last, but not least comes Solana: Founded by Anatoly Yakovenko, an ex-engineer from Qualcomm, his big idea centred on creating a historical record to speed along “consensus,” which is how decisions are made by blockchains. At present, consensus is reached on various blockchains when members solve a mathematical puzzle, a mechanism that’s called “proof of work.” These miners are rewarded for their efforts with cryptocurrency, but the process takes 1 hour for Bitcoin, and 1 minute for Ethereum, and is insanely energy intensive, which is why neither Bitcoin nor Ethereum has proved to be very scalable. Whilst Ethereum is transitioning into proof of stake with ETH 2.0, it won’t be an easy task to achieve.
Solana’s blockchain uses proof of history, which can be compared to a synchronized clock that in essence, assigns a timestamp for each transaction, and disables the ability for miners and bots to decide the order of which transaction gets recorded to the blockchain. This allows greater security and “censorship resistance”. Solana has innovated other ways too, including forwarding transactions to validators even before the previous batch of transactions are finalised, which helps to maximise confirmation speed and boost the number of transactions that can be handled both concurrently and in parallel. “Basically, the speed of light is how fast we can make this network go”, says Yakovenko in his interview with Techcrunch.
Next – Invest in the Eco System
Each blockchain has its own eco system which it extends to Launchpads, User Interfaces, Developer Tools and Decentralised Applications (DAPPS). I have sourced the slide below from Crypto Banter, in which we see the eco-system for Ethereum.
If you check the coin price of the projects listed above, it will give you an idea on how they have exploded after launch. These are also relatively safer than investing in a project which has low fundamentals. One project which is not listed in the above is Polygon (MATIC) which held strong even during the recent market correction. Extend this tool to Cardano, Polkadot, Solana and even Binance Smart Chain. As the projects are constantly launching on these eco systems.
During last week’s market correction, there was a lot of backlash towards crypto influencers for not predicting the market correctly, and providing false information. But, if you follow the above method, you can make your own judgment about what to invest in. As a personal habit, I don’t trade on futures due to the volatility of the market. Seeing over U$ 2 billion worth of funds liquidating during the last correction assured me that I made the right choice. If you hold on to good coins, they will still be there when the market starts moving. Yes, you will see your portfolio value plunge in the short term, but rest assured that it will rise again. I managed to trade some of my holdings to gain more DOT during this period. Even ETH was trading 40% lower!!
Always trade on fundamentals and study the projects you bet your money on. Perhaps the top 20 projects may not give you 1,000x returns in a few days, though they will give you life changing returns in the long run. The proof is there, just look at the people who invested in Bitcoin and Ethereum a few years ago.