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Four Coins that Could Quadruple by This Time Next Year

Okay, folks. It’s time. First, the disclaimer:

We don’t provide individual advice. Past performance is not indicative of future results. Seek professional investment, financial, and legal advice before investing in any asset, let alone cryptocurrencies, which are a brand-new, emerging class of assets. Read our recommendations and take them with a grain of salt, do your own research to back up your investments, and be prepared. Use this site at your own risk.

Now that we’ve scared you, here’s our post.

We gotta admit that this is a rather fun universe we’re entering here. Part dot-com boom (before the bubble), part options trading when it was just invented. And part gambling, because, let’s face it, some of these ICOs and emerging cryptocurrencies are like playing the lottery or playing roulette.

That being said, though, the idea of creating an entirely new form of money, based on computing power and solving code and a lot of stuff that’s way over the heads of mere mortals – well, that’s just plain thrilling.

So, as we jumped head-first into the pool with this post, we tried to think of the particulars that could make these coins actually go crazy in the market. Some of this is going to be a little too techno, and some of it is going to be real-world. All of it is mere speculation: I can’t see the future.

But if you take our “BRED Portfolio” post as an example of our ability to be soothsayers, we might be on to something here. (If you had invested in the BRED Portfolio on April 1, you’d be up 12.08% in just three weeks.)

Enough background. Let’s dive in: Four Coins that Could Quadruple By This Time Next Year.

Metacoin Meme

#1: Litecoin

That does it for me. Seriously, though, once you’re starting to see a coin used side-by-side with Bitcoin, you now know it’s got real-world functionality.

Litecoin (LTC) is about to hit its fourth birthday, and it’s actually well below, on a USDT basis, its all-time high of $50.27 a coin (achieved in November of 2013). It’s that factor first and foremost on our list of reasons why this coin could quadruple by this time next year.

Volume of late has been huge – 9-figures worth traded a couple times in April – but its utility, to the tune of transactions per day in the thousands (more than double the number of Dash transactions, per this chart), tells us that the coin is actually being used out there in the wild.

Over the weekend, the LTC/BTC pair was trading at .01 to .012-to-1 – support kept the price above .01 pretty much all day on Saturday. This is another good sign.

Expect volatility, though – I’d hazard a guess that it may bounce around in the .009 to .01 range for awhile. That’s a good price to jump in at.

Mandatory mention of Segwit here. LTC is moving toward Segwit. Segwit is important. Let’s all talk about Segwit!

Disclosure: We’re long Litecoin at the present moment.

#2: Dogecoin

Yeah, I can’t believe it either. A coin named after an Internet meme…you CANNOT be SERIOUS? Dogecoin. I’m serious.

DOGE had more than 10,000 transactions in the past 24 hours – more than Litecoin; third in the rankings behind Bitcoin and Ethereum – and its market cap is $50m+. So it’s legitimate.

What really jumped out to me? The average transaction value. It’s pretty low ($310 or so) when compared with others; the median transaction of around $3.28 tells me that people are using this coin as a Venmo substitute. (Whether that’s true or not, I don’t know. But I’m guessing fewer lattes are purchased and more random paybacks and IOUs are covered with this one.)

Dogecoin trades around 35-38 Satoshi of late. Its all-time low is 15. I see more mainstream use in its future. I wouldn’t be shocked to see it in the 60s in a month or so.

#3: Digibyte

Digibyte logoDid we mention Segwit above? We did. Here’s a link to the latest on Digibyte Segwit activation.

To the layman, this means little, but to those in the know, here’s the general consensus:

  1. Segwit is important; its adoption will drive the price of the coin adopting it higher
  2. It may never happen with Bitcoin, it might happen with Litecoin
  3. It looks imminent with Digibyte.

Place your bets: with a current market capitalization of less than $10m, do you think the bargain hunters will start shopping for the coin that is the first to activate Segwit? Honestly, quadrupling might be a lowball estimate. We’d accumulate anywhere in the low 100 Satoshi range.

Disclosure: we’re long Digibyte right now.

#4: Bitcoin

BitcoinDidn’t see THAT one coming, did ya?

Let’s assume that Bitcoin stays around $1200 USDT, giving it a market cap of right around $20B. Now, let’s also assume that Bitcoin becomes the word synonymous with all digital currency, crytpocurrency, and altcoins (even though it’s NOT an altcoin), sorta like “Kleenex” brand facial tissue is everyone’s word for facial tissue.

I was going to say that there’s all sorts of crazy economic stuff going on in the world, but heck, I’d focus on two things that should drive the value of Bitcoin way up in the next 12 months:

  1. Brexit
  2. The tenuous state of the EU and the Euro

Now, that might get folks moving toward the US Dollar – which is a fair guess – but if you factor in the dicey nature of the US economy and the role of the Federal Reserve in money printing…do you think the masses will want to start putting their money into the US Dollar? Especially when an infinite supply of dollars could, technically, be printed?

Do you think a $5,000 price point for one Bitcoin is out of the question?

Disclosure: We are currently long Bitcoin.

Additional notes: we do not make any trades in any of the listed coins here for 24 hours after the date we publish this report.

 

Quadruple Your Money with the BRED Portfolio

When we stumbled upon this idea this morning, our first instinct was to play it rather cool with the headline. Something like “Introducing the BRED Portfolio: A Buy-and-Hold Bitcoin and Altcoin Investment Strategy.” And that sounds very straightforward, by the book. It’s also boring.

So we went with the clickbait headline.

Read on:

Why “BRED”?

There are a couple reasons behind this one – and it’s not just because these four letters fit together nicely. (They do, though. Props to us.)

Think about one of the best business and investment acronyms out there: FANG. Jim Cramer claims to have created the acronym several years ago, used to put four “new economy” stocks into one nice bucket. Facebook. Amazon. Netflix. Google.

It’s easy to remember, but it also includes four really solid tech stocks – and four companies that are, you could argue, doing quite a bit differently while still being in the same category.

We thought the same thing when creating this portfolio strategy: let’s get four of the biggest cryptocurrencies out there and put them in one bucket.

BUT, let’s do this with an eye toward the ones that have the best chance of long-term staying power.

While “BRED” works nicely as an acronym, these are also four coins that have managed to stick around in the crypto space.

We’re not just rationalizing…

B is for Bitcoin, and you couldn’t have a portfolio like this without Bitcoin, since it started this whole shebang, right?

R is for Ripple – which, for some reason, doesn’t have a ticker symbol that starts with “R” – and Ripple’s USDT price developments of late don’t tell the whole story; consider it the best chance of becoming the backbone of all crypto transactions throughout the world.

E is for Ethereum, whose “smart contracts” were, you could argue, the first yin to Bitcoin’s yang.

D is for Dash – “digital cash” is a very easy and consumer-friendly value proposition. We will argue that this one could win out based on the strength of its community alone.

 

Look at the rankings, though – if you visit Smith and Crown this morning, you’ll see that these are four of the five largest cryptocurrencies – in terms of market capitalization – in the world. In fact, going back to January 1, you would still have been picking four of the 7 largest cryptos, as shown in this chart from CoinMarketCap.com.

Argue with us if you’d like, but we’re going with this acronym. You’ll see why in a second.

Structuring the BRED Portfolio

To keep it simple, we used January 1, 2017 as our starting point. And, as opposed to weighting the portfolio by market cap – which would have had Bitcoin at about 92% of the portfolio, defeating the purpose – we went with a straight 25% invested in each.

Bred Jan 1

To get the prices, we grabbed a chart from TradingView.com – our first-ever visit to the site, which is bloody easy to use, we might add – and use their figures for open price on January 1.

TradingView BRED Chart
Thanks, https://tradingview.com

So there we are, a simple portfolio with four of the biggest crypto assets. But…how did it perform?

Quadruple. Your. Money.

What will remain to be seen here is whether or not this is an aberration – past performance not indicative of future results and all that.

But holy buckets this thing is on fire.

Straight Up Fire

$10,000 invested equally on January 1 in four cryptocurrencies – Bitcoin, Ripple, Ethereum, and Dash – would have grown to $42,567.69 on April 1.

So…Now What, Smart Guy?

Yes, hindsight is 20/20. Looking back, the woulda-shoulda-coulda factor with the coins that aren’t named Bitcoin is pretty huge. And the volatility is such that today’s number on the BRED portfolio is more like $44,000 – and that’s due in part to the Ripple developments over the weekend.

But here’s our take – and we’re not investment professionals, nor do we provide legal advice – on what to do with this information:

Buy and hold. It doesn’t have to be these four cryptocurrencies, but you should consider having a few coins or tokens that you simply leave alone. Don’t trade them, keep them in cold storage, and worry about them only a little.

Launching an Altcoin? Write a Manifesto

do you manifesto?“Love me a good manifesto.” Actually, we’re struck by how many altcoins HAVE manifestos – and why they feel the need AND they choose the word “manifesto” in the first place.

Corporations have Mission Statements, Vision Statements, Core Values – and they normally put these things in initial caps and plaster them on walls throughout their organization. The thinking is that you get your morning coffee, I guess, and you walk by and read these statements, maybe genuflect, then get on with your day; but they’re always on your mind as you go forth and conquer the business world (likely for the benefit of the owners or shareholders of the company that just gave you your free morning coffee). (What if that coffee ISN’T free? I guess that’s a subject for another day.)

The Manifesto – beware, initial caps about to permeate this article – is an Italian term, and it appears the first Manifesto of note was written in Baghdad in the 11th Century. I, for one, always think of “The Communist Manifesto” as the most dominant manifesto to use “Manifesto” in the title – though it appears that a whole host of other documents – like the Declaration of Independence – can be called “manifestos.”

It sounds like there’s a reason, though, for these documents: you get fed up, or you don’t like the way things are going, or you’re just looking to make some changes and get others on board. So you write a manifesto, nail it to the wall somewhere, and you’re off to the races.

The Bitcoin Manifesto

The cryptocurrency movement started with Satoshi Nakamoto’s original paper, “Bitcoin, a Peer-to-Peer Electronic Cash System,” which is considered required reading for those who want to understand how Bitcoin works (and, in turn, how all of these other follow-on currencies work).

BTC Manifesto

It’s a simple abstract (if you speak a little bit of programming language). And it started us down this path.

Why do you need a manifesto?

When we Googled “Bitcoin Manifesto,” the above popped up – even though it doesn’t have “manifesto” in the title. And then we Googled “Ethereum Manifesto” and this is what we got: Vitalik Buterin’s white paper, or write-up, or whatever…it, too, is not called a “manifesto.”

What’s interesting here, and what actually prompted this article, is the following chain of events:

  1. April 30, 2016. Ethereum launches its DAO – “Distributed Autonomous Organization” – and it takes off “like a runaway train” (as we learn in this awesome article on Quartz);
  2. June 17, 2016. The DAO is hacked, to the tune of $50m USD in Ether.
  3. July 2016. A “hard fork” is announced; this and subsequent hard fork in November 2016 are actually the third and fourth hard forks.

But somewhere in there, the old school and new school Ether disagreed: thus ETH and ETC. It was the DAO that got folks disagreeing: should it be altered? Should it be left untouched?

Enter PIVX and its manifesto

Honestly, we had heard about PIVX and we had seen a little bit of ticker-symbol chatter on Poloniex. However, since it’s not traded on Poloniex, we weren’t all that familiar with it.

But their manifesto tells us quite a bit about how they feel about the DAO.

PIVX Manifesto

“The DAOS are untouchable.” (It should be “DAOs” but we’ll cut them some slack.)

PIVX also feels rather strongly about privacy, it seems. Take a look here at their “tale of the tape,” as they compare their coin to Dash:

PIVX Dash Infographic

Altcoin Manifesto Theatre

Let’s be honest here: we could probably spend all day talking about all sorts of coin manifestos – in fact, someone else did that here and why not just link to their post? – but the point of our post is that PIVX appears to want to hang its hat on a couple key themes: “Privacy” and “Governance” seem to be the two biggies (assuming you use “DAO” and “Governance” interchangeably).

Bringing us to the point of this article, and the key takeaway for you: “What does your coin stand for?” In other words, are you a “me, too” coin, created to take advantage of the fact that this is still the wild West and you can pretty much get funding for just about anything these days? Or are you putting a stake in the ground and saying “this is what we’re about.”

And I guess if you’re the latter…put it in a manifesto.

FOMO, FUD, Pump and Dump, and Other Trading Caveats

FUDLook at that list…so many coins! So many wild mood swings! So much volatility!

Seriously – if you’re new to trading altcoins and crypto and you want to move beyond the mainstream coins with the high market caps and the household names, you might see some of these and think: PROFIT! I can get in and out, make a quick buck, double my money, and keep doing that til I retire as a Bitcoin Millionaire!

Wait. Hold on. Just a second. You’re likely to get taken for a ride – and you might not like the ending of this roller coaster. Here’s what we mean.

ADVERTISEMENT: If you haven’t gotten started with Coinbase yet, here’s a link. Make a qualifying Bitcoin deposit, you’ll get a bonus, and we’ll get a bonus.

FOMO

Of course, “Fear Of Missing Out” is a widely used term these days. If you don’t go out to the bar, you might miss big fun. If you don’t watch the show, you might miss a cultural experience. And, if you don’t invest in the next big altcoin, you’re going to miss out on big profits.

Careful of that last one.

If we’re using the example from this screengrab, Einsteinium, we see a 64% bump in the price – which, crazy enough, is sorta kinda the norm for some of these altcoins. You don’t want to miss out on THAT ACTION, do ya?

But the FOMO danger here is that old saw about trying to time the market. Take a look at this chart, from the past couple days of EMC2.

EMC2 chart

Oh. Remember to time the market at your own peril.

FUD?

Yes, Elmer. FUD. “Fear, Uncertainty, and Doubt.”

In the top screengrab, look immediately above and immediately below the Einsteinium price: STEEM is down almost 12%, Shadow is down more than 7%. You could guess that what drove EMC2 up might be the same thing that drove STEEM and Shadow down. Fear (maybe of missing out, maybe that it’s not the greatest coin on the planet), Uncertainty – because, really, what do we know about ANY of these coins and their long-term prospects? – and Doubt because there’s likely somebody on Reddit who has you convinced that Shadow is toast.

Pump and Dump

This is a classic tactic employed by small-cap stocks; depending upon how it’s done, it’s possibly unethical, possibly illegal in the stock market. Simply put, first a group hypes a stock, creating perceived value, and, they hope, driving up the price. That’s the “Pump.” Once the group gets the stock where they want it to go, they cash out, take their profits, and leave those who bought in high holding the bag.

But this is the wild west, so anything goes in these markets, right?

Here’s where, IMHO, Poloniex does a great job with their “Trollbox,” or the chatroom that’s attached to their trading platform. Start saying things like “wow, XYZ coin is going to the moon!” or “XYZ will hit 10,000 tomorrow, better get yours now!” and you get banned for an hour or a day, depending upon how egregious your sins are.

They’re trying to keep folks from pumping and dumping – especially with thinly traded coins whose prices might be the most volatile.

Trading caveats like these might make you ask: what should I do?

Research. Investigate. Ask Questions.

We don’t give investment advice here, and past performance of any coin is not indicative of future results. But, really, are you going to base your investment on what some rando says on the chatbox?

We’d encourage you to look around, visit other sites, check out the underlying fundamentals of any of these coins. Smith and Crown is a great place to start – look at the market cap, the age of the coin, how many will be released. Visit the individual sites of these coins, too. And don’t forget chatrooms, Reddit, Slack, and the like; you’re often a quick Google search away from the answers to the questions you didn’t even know you had.

FOMO FUD

Margin Trading Comes to Coinbase through GDAX

Fortune is reporting that margin trading has arrived at Coinbase. You can see the full article here, but suffice it to say the key differentiator for Coinbase’s GDAX trading platform is the one thing that the firm hopes gets it adopted by the big traders: regulatory compliance.

Bitcoin is the future, and it doesn’t actually look like this

GDAX accomplishes this in the form of state licensure, which is normally the first thing that “whales” want to see before plunking down all sorts of money. Or even any sort of money.

Note that margin trading already exists on two of the largest US-based platforms: Kraken and Poloniex. (Kraken appears to have added trading in Monero recently; you can read more about Monero, or XMR, elsewhere on this site.) Other sites have margin accounts available – but sites, as you’d imagine, are scattered around the globe.

And that’s the point of crypto and, perhaps, where the big ol’ dose of irony comes in: in order to become legitimate in the eyes of the mainstream, you have to do some legitimate things – like state licensure. But you can’t maintain that decentralized awesomeness that you’ve come to expect from Bitcoin and altcoins if you’re too tightly regulated. Or if the big banks start getting involved – since their involvement always finds regulatory involvement trailing closely behind.

In any event, feel free to check out the info on the Fortune article and on Coinbase’s GDAX.

And if you want to get started with Coinbase, here’s our handy-dandy affiliate link. (DISCLOSURE: if you make a qualifying Bitcoin purchase, we’ll get some Bitcoin as a result.)