What do you think the future holds for crypto? How will it evolve? Which blockchains will rise? Will BTC maxis be right?
The Future of Crypto: BTC, ETH, DeFi, and DOT
There are a few schools of thought around the future of crypto and what level of dominance (currently 67%) BTC has.
1. BTC Maximalists / Hyperbitcoinization — All alts fail to BTC as it is proven to crush them sufficiently and every other currency including the USD.
2. ETH Flippening — ETH takes over as the dominant crypto, BTC is to gold as ETH is to USD / all of world Fiat.
3. DeFi Dominance — I don’t think this has many believers yet, but most DeFi people would say ETH will be here and bigger than any other coin, but DeFi gains will supersede ETH gains. Since there are so many Defi coins here there will be no consolidation, all good currencies that have good protocols and do valuable services in demand in the crypto economy will bloom and flourish like a diverse ecosystem of specialist species. However, there will be bear markets and managing a crypto portfolio is always about managing risk, which means selling DeFi Alts for ETH and BTC when it looks like the tide may be turning.
4. DOT Friendly — ETH scalability fails and gas fees never get solved which ushers in DOT parachains even more. ETH staking becomes the solution vs. BTC mining, but DOT scalability bridges bring about the true realization of speed and vision that all crypto investors / believers envision.
I for one, see a blend of #2, #3, and #4.
ETH rising vs. BTC falling in dominance over the long run with DOTs help but DOT not as an ETH killer. DeFi blooms and all those coins will become the best stocks of the future, whereas ETH is like money and BTC is like gold.
I see this happening in stages (2, then 3, then 4). I don’t think BTC maxis will be proven right. Right now, I have only ETH and DeFi in my portfolio because that is where we are in the market cycle right now I believe. Understanding at any moment it could all come crashing to a new multi-year bottom, but historical analysis shows it will go for about 11 more months with a crash coming around on New Years Day 2022. It might lead early though because everyone is so shell shocked from last crash. I think September might be more likely. I am holding ETH and will hold ETH through that bottom, hopefully I will raise some USD at the right time, but if I miss it, I won’t sell late. Put another way, if I’m late, I won’t sell, just go out and start working to make more USD to convert to more ETH and and BTC.
The space changes fast, so it’s important to let an expert like myself and my fundamentalist managing partner, Nick, manage your ETH / Alts. We can stake ETH on our dedicated ETH node which is the safest way to get staking rewards. As I get my fund up and running (structured as an incubator fund) we can only accept a select few initial investors as they will become GPs (general partners) of the GP company with us. Then the GP as a company will invest into the LP. We will gain a track record there as an official fund, and then once that is achieved we can take on investors (LP limited parters).
That’s the vision. Hope that helps.
What do you think is Driving the Price of BTC, ETH, and LTC?
BTC and ETH are both mainstays, so I believe it is primarily price that drives price. The fundamentals and valuation for both commodities are there, and I’ve quantified them for BTC in my youtube videos. For ETH, ETH 2.0 staking rewards and the DeFi ecosystem hype / valuation I believe are driving ETH and those ETH based Alts vs. BTC. ETH also I see more like the true crypto currency (crypto cash) and BTC more as the crypto gold (store of wealth). Yes, there are stable coins, but those are just ways for people to trade vs. the USD.
People in crypto mostly move money around in ETH and trade ETH for other alts. They know the price of Alts in ETH. The BTC market does less trading because BTC maximalists hodl and just sit there. It gives BTC more stability, but less upside. Fear makes traders / investors move from ETH and Alts to BTC, however in this last correction investors didn’t. They moved from BTC to ETH, BTC to Defi, and ETH to Defi as much as they moved from BTC and ETH to USD, signaling to me that we have a lot of upside left in this market.
My post “Defi Alts Breakout Any Moment or… Sell ETH and BTC?” was right on point. It was wise to do both. The market didn’t panic out of the good Alts more than BTC or ETH, they were just as stable, and these Alts rebounded better than BTC and ETH showing strong relative strength.
Why?
BTC is over 20k — Investors believe crypto is here to stay, and so are willing to take even greater risk right now to hopefully catch the rockets of good Alts that are not shit coins. I am as well, and I’ve watched them closely trying to mitigate my risk and only gain BTCs by holding Alts. I’m not willing to hold Alts as they trend down vs. ETH or BTC, but I’m willing to lose USD because we are still in a bull trend. My goal with Alts (and I’ve accomplished this by 20%) is to outperform BTC.
As for LTC
I’ve never learned much about this one, I have the idea that it is syphoning value from BTC as all alts are, difference being that LTC has been around longer and gone through years of consolidation and now is breaking out of resistance levels. William ONeil’s CANSLIM method for picking stocks is applying to alts now I believe. The old alts of BCH, ETC, LTC, and XLM are all in this boat. They are flavors of BTC and here to stay, but I believe lose to BTC over the long run.
LTC attracts new investors because they perceive it as cheaper and affordable vs. BTC (similar to why stock splits work to bring new investors to a stock) — the price is lower and many newbies do not know they can buy partial BTC. They perceive BTC as a bubble bc of its high price, and LTC as cheap. Well they are wrong in the long run, but right in bull markets — Alts will outperform BTC in the bull run, but when that ends they will get crushed even more than BTC which we all know will already be massive crash. In the long run, most Alts have negatively trending exchange rates vs. BTC and ETH. LTC also has a few features / fundamentals going for it like smaller fees and faster transfers, but many alts have that. It will not make LTC overtake BTC. Currently only ETH and perhaps in the long run DOT have a believable story to do that. But even that is a maybe of course.
