The 11 Altcoins I’m Exploring Now
Why should you buy second-line altcoins if the first ones have a big chance to be successful? The last year was extraordinary in the altcoin market. Bitcoin “only” jumped 426 percent (more than five times higher), Ethereum, 1,800 percent, but many significant altcoins, much more. (See the charts.)
Altcoins are outperforming, and I don’t see why that would change soon.
Do you have altcoins? Are you a crypto investor? You should diversify your portfolio and build a broader collection if you haven’t done that already. I am currently examining the following 11 alternatives beyond the top five riders:
- Polkadot (DOT)
- Chainlink (LINK)
- Solana (SOL)
- Stellar (XLM)
- IOTA (MIOTA) (DAGs ledger)
- Cosmos (ATOM)
- Tezos (XTZ)
- EOS (EOS)
- VeChain (VET)
- Avalanche (AVAX)
- Tron (TRX)
These are all PoS, dPos, and DAG-type coins. All use a different consensus administration mechanism than Bitcoin. (BTC is PoW-type.) PoS (proof-of-stake) systems are faster, cheaper, and more environment-friendly. PoW (proof-of-work), the method used by Bitcoin and some other cryptos, uses a lot of energy but is considered much more secure, immutable.
Energy consumption is the main reason why I’m interested more in PoS-coins. I think they are worth buying now, and not only the largest ones (Ethereum, Cardano, Binance Coin). All reasons are:
1. Elon Musk And His ESG-Crypto Campaign
The chief of Tesla (and “the Imperator of Mars”) tweeted last week he canceled accepting Bitcoin as a payment for his cars. He also stated:
We are concerned about the rapidly increasing use of fossil fuels for bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.
He also mentioned that they are looking at other cryptocurrencies consuming “less than one percent of Bitcoin’s energy.” That is an important sign because the business world is becoming increasingly “ESG”-oriented. (ESG means “Environmental, Social, and Corporate Governance,” which refers to the sustainability, environmental and societal impact of an investment.)
Small and large investors prefer investments with good ESG-scores today, and this trend appears essential already in the field of cryptocurrencies. So, fast, cheap, and environment-friendly PoS systems may overperform PoW. We don’t know which altcoin Elon Musk will choose, and if any. But if he chooses one, its exchange rate may multiply quickly.
2. Altcoin-Roadmaps Are Promising
Most developer teams have redoubled their efforts in the last six or seven months since the new cryptocurrency bull market began. Promising updates, developments, innovations, and forks are imminent or started working already. The progress has accelerated recently.
3. The Crypto-Industry May Stay a Multi-Player Game
There is intense competition between different altcoins. The game is not over. New ones are built every day. I don’t think only one or two cryptos will dominate the industry. I assume 5-10 major players may stay in the long run, e. g., as in the desktop computer industry. Or 10-20, as in the traditional car industry. The winners may overperform, and prices of various altcoins may multiply at the same time.
4. Simple Diversification Principles
“Never put all your eggs in the same basket” is the common sense version of portfolio diversification. It is better to spread the risks and hold various investments of the same asset class. (And to invest in several asset classes.) Last week, Cardano, Stellar, and EOS jumped, also Polkadot seems to surge. Some weeks before, Chainklink overperformed, and also Binance Coin had its excellent period. More cryptos may lead to more chances.
5. Altcoins to Pay Attention to
You can’t be an expert on hundreds of coins, as one analyst can’t analyze hundreds of companies effectively. You have to choose some.
We all are different, but I always pay much more attention to an investment if I own it myself. I read all related news, and I analyze it often. I try to understand it harder, find out why its price is moving the way it is moving. The exposure is educative for me, leads to more knowledge.
6. Altcoins Are Crazy
It’s fun to own cryptos, exciting. I suppose it boosts adrenaline production. Ten smaller packages are more often producing exciting news than only one. They will amaze (or annoy) you more frequently.
7. The Fall in Prices in the Last Couple of Days
Many altcoins are in the negative in the last seven days. It’s mostly 5-15 percent only, but I prefer not to buy anything at an all-time high.
I’m also holding Bitcoin Cash and Litecoin because I think the race to build the “digital silver,” an everyday, fast, low-cost transactional currency, isn’t over.
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