Are we in a Bull Market for cryptocurrencies? Is your latest “Pick of the Day” going to the MOON? Are you witnessing a pump-and-dump?
Is Ripple really going to be bigger than Bitcoin in the next month?
Will Bitcoin go to $5,000 a piece?
Calm Down, Everyone…
Really, while some of the froth in the market might be scary, there are a few questions you should ask yourself before entering into any investment or asset class; this is what you should do if you’re buying stocks, bonds, mutual funds, pork bellies, platinum futures or, yes, Bitcoin, altcoins, or any crypto-asset.
1. Is this fundamentally a good pick?
Let’s talk about Ripple – XRP is the ticker, and the token/asset/coin attached to the technology. While it appears that 389 gazillion XRP are in existence, you can get off the company’s back for a half-second. It’s not THAT many – 38.3 billion to be exact – AND the company announced today that they are escrowing 55 billion tokens.
So the froth around XRP – which is now #2 in the rankings, ahead of ETH and still well behind BTC – probably comes from the fact that the technology behind the token is actually being used, and that Ripple is actually taking on SWIFT. And, it appears, in some cases, winning.
Fundamentally: XRP is more than likely a long-term player, and its technology will likely make a whole host of behind-the-scenes bank transactions easier. Thus, it’s a good call.
But you should be asking yourself if there’s something to it that you can grasp, a concept that makes sense, and the people and technology that gives it a chance of being successful.
2. Will this be around in a few years?
I remember, back when electric cars were becoming a thing – but hadn’t yet become a thing in the US – and there was a company called “Think” that was bringing Finnish (?) automotive technology to the US.
It was a great concept, and it was poorly executed, and there wasn’t a vision behind it, and it fizzled.
Contrast that to Elon Musk and Tesla. Who cares that Elon himself didn’t invent electricity; you wouldn’t know it if you saw one of his press conferences. The guy can sell air conditioning to the proverbial Eskimo – he’s probably already contracted with Eskimos everywhere to put solar panels on igloos.
Why do I bring that up? Ages ago, for another site I have worked on, I made what I thought was a bold prediction: Tesla is the Next Apple. I doubted my own prediction last year, but now I’m starting to look like maybe I was on to something.
The Tesla vision is pretty simple: electricity, coming off your roof, coursing through your home’s veins, powering your auto.
Contrast that with…well, pick a coin, any coin. Ethereum: Smart Contracts, powering a whole host of transactions in a wide variety of industries, in as transparent a fashion as possible. I’ll take that.
3. Can I afford this? And…Can I afford this going to zero?
That’s right, another part of the sniff test: what if your investment hits rock bottom.
You should get professional advice, your should do your own research, and you should talk to a whole bunch of different folks about any investment. But, especially with a really REALLY emerging and crazy space like cryptocurrencies, you should “bet with your head, not over it.”
It’s possible you could end up a “bag holder” – someone who buys in at the top, then watches the asset drop like cray-cray, then finds themselves with 100,000 tokens that are worth .00000001 each. (In crypto parlance, that would be “1 Satoshi.” At today’s prices, $1.78, give or take.)
Happy Trading. Now…Everybody Calm Down.