You have probably read the headlines of the past weeks, Bitcoin, Ethereum, and even Dogecoin surpassed their old all-time highs (ATH). Your gut tells you alt season has started, which left you wondering, what altcoin is next?
Before we get into alts, let me share a little about my personal investment strategy.
An investment strategy is personal. We all have different profiles and variables to consider. With my poker background, I welcome risk and love to dance with lady variance. However, for most people, this is not the case.
A few things to consider when building your strategy:
- Risk tolerance
- Opportunity cost
- Time management
I’ll cover more on how to built your personal investment strategy in a future blog. Now let’s get to the buckets.
I divide my cryptocurrency portfolio in several buckets.
I have a bucket of BTC & ETH that I will hold for the next few years. With this bucket, I focus on passive income streams, like staking and lending on platforms like Celcius Network. I mean, I’m planning to hodl them for the next few years anyway. So I might as well make sure I earn 6-8% per year on them.
Then I have a big bucket for trading, which is again seperated in 3 different smaller buckets:
- Bot Trading
- Altcoin Trading
- Swing Trading BTC & ETH
Today, I’ll discuss my plans for Altcoins for the next few weeks.
Is Altcoin Season Really Here?
With Ethereum reaching $1700 last night, there is a good chance Alts will move soon. According to the Altcoin Season Index, we’re quickly getting to levels where many of the alts are ready to rally.
To get started, you have to decide your goals for investing in alts. Are you diversifying? Are you gambling to get 1000x gains? What are you doing with your alts?
My goal is to outperform Bitcoin and Ethereum in the bull run. 80% Of my crypto holdings contain the top two currencies and I can ride those in the bull market and comfortably lock in profits.
However, I do see potential in several altcoins, in the short, mid, and long term. Therefore I allocated a bucket towards it.
For me, I believe BTC & ETH are here to stay, so I’m not diversifying the risk that they might go to zero. In my mind, that is nearly impossible at this moment.
And if I look at the past 90 days, several old-school altcoins and newcomers have outperformed BTC. So it’s time to find me some good horses to bet on.
Oldies Before Newcomers
During the bear market of 2018-2020 many of the altcoins of 2017 died, or fell 90%+. I know several friends who ended up holding a bag of shitcoins till today, hoping the market turns around to save their losses.
Some of these coins are still active, and because people decided to HODL until they die, it means these projects still have a community to support them.
From a psychological point of view. It’s easier to grasp a coin going back to its old price, than finding new highs. I remember when Bitcoin was only $100, and my housemate told me someday it might be $10.000 or even $100.000.
I laughed in his face, stating it was impossible to 1000x on any investment. Turned out he was right, and I was dead wrong.
That being said, I believe there are old generation altcoins of 2017 and even before, that have the potential to reach their previous all-time highs over the next few weeks. Today I will look at a few of the oldies, to see where they are at and if I will fill my bags with them.
1. Cardano (ADA)
- Marketcap: 14.08 B
- Price: $0.44
- From ATH: -62%
- To ATH: 168%
Cardano is a decentralized, blockchain-based system, powered by the ADA coin. Much like Ethereum, it is a smart contract-based system and can be used to run dApps. But Cardano is a layered system; i.e.
- It has a separate layer that runs ADA exchange, and
- A separate one that runs the Smart Contracts.
Cardano claims to be the first cryptocurrency that runs on a scientific peer review, which ensures its safety.
Throughout the bear market, and especially since the bull started again, I see people mentioning ADA all over social media. This is a project that captured the hearts of many people back in 2017 and a big part of their community stayed extremely loyal. A very bullish sign, as I believe that the people are a key factor for any project to succeed.
Even though it was shilled as “The Ethereum Killer”, back in 2017, it hasn’t delivered on that promise. While Ethereum is breaking the financial industry with DeFi and thousands of projects built on top of it, Cardano stayed behind and is still waiting for businesses to use their blockchain as an underlying technology.
But, with the scheduled Mary hard fork in February 2021, Cardano will open up the doors for DeFi on their blockchain, which puts it in a good spot to revisit its previous all-time high.
Will I Buy it?
Yes, I will allocate 2-3% of my trade bucket towards Cardano. As this is a top 5 cryptocurrency with a strong community and good upcoming developments, i see little risk and decent upside. If ADA doesn’t reach the previous ATH in the next 4-6 weeks I will reevaluate my position.
2. Litecoin (LTC)
- Marketcap: 10.32 B
- Price: $155
- From ATH: -57%
- To ATH: 132%
If Bitcoin is the Digital Gold in the cryptocurrency space, Litecoin is the silver. That’s been the message since 2011 when Charlie Lee founded Litecoin and forked the Bitcoin blockchain. It’s an altcoin that survived the first wave of alts, which started in 2011-2012.
I’ve been following (and holding) LTC since 2013, and over time I started to look at Litecoin as Bitcoin’s little brother. They basically share the same DNA, as it started as a copy of the BTC code with some minor adjustments to the block sizes and speed.
The adoption of LTC has been great. Thousands of merchants accept LTC as a payment, and investment funds like Grayscale are buying up Litcoin’s to add to their altcoin buckets.
The community had to take some hits over the years. As the price underperformed vs other alts. And back in 2017, Charlie Lee sold all his LTC near the peak of its price. He was being accused of manipulating the price for personal benefits with his Tweets, and overadjusted his strategy by selling his entire holdings. This did not sit well with the community. But for a coin that has been around for 10 years now, they have a lot of merchants and people supporting the cryptocurrency.
In 2020 they announced to focus more on privacy adoption, which I am a personal fan of, however, I’m not sure if the SEC shares that opinion. So if you’re considering it as a long-term investment, keep track of regulators’ points of view on privacy coins, like Monero and ZCash.
Will I Buy it?
No. I currently have 1.5% of my crypto holdings in Litecoin. I plan to keep those, but I will not be buying more. The price pattern of LTC is usually a few weeks behind of BTC. Still acting like its little brother. Therefore I do believe we will see a price increase over the next few weeks, but I am happy with my position in LTC and I believe there are other horses I want to bet on as well.
3. Filecoin (FIL)
- Marketcap: 1.1 B
- Price: $22.92
- From ATH: -89%
- To ATH: 810%
The Web 3.0 data-storage project, which raised a $257 million ICO in 2017, and has been building out its technology ever since.
While Filecoin has been quieter than most over that time, Filecoin is currently wrapping up a very active incentivized testnet called Space Race.
There are 1.5 million FIL tokens allocated to testnet participants, though it’s hard to assess the value of that offer when the company has refused to discuss details that might inform FIL’s underlying price. Nonetheless, this testnet has been quite popular.
It came on my radar when Tyler Winklevoss tweeted about it:
And in October 2020 a Filecoin Trust was started by Grayscale investments, which indicated they are getting ready to make some moves on this altcoin.
I still believe decentralized storage would be one of the first use cases for blockchain. And so does the Filecoin community.
It’s not an altcoin that is massively shilled over social media, but I believe that will soon change once Grayscale starts buying up FIL and the price reaches its previous ATH.
Will I buy it?
Yes. With 810% to go to previous ATH and investment funds looking into it. It should be fairly easy to get back to previous highs. I’ll allocate 1-2% to this altcoin and will wait for the fund FOMO to kick in.
4. Tron (TRX)
- Marketcap: 2.49 B
- Price: $0.34
- From ATH: -85%
- To ATH: 569%
Tron is a decentralized entertainment and content-sharing platform on the blockchain, which started in 2017 by raising $70 Million with its ICO.
You can think of it as a next-generation social media outlet on which you can create and share content with anyone, anywhere in the world.
Its founder, Justin Sun, is known as an apprentice of Jack Ma (Alibaba founder). He is a marketing guru and is known for crazy stunts like buying the charity diner with Warren Buffet, acquiring BitTorrent, and most recently, supporting the Wallstreetbets movement with $10 million investments in their stock pics like GME and AMC.
He tried to infiltrate the WSB community to pump the TRX price, which briefly pushed the price to $0.046, but shortly after dropping back to the $0.03 range.
They have many things going on, like adding a DeFi chain called JUSTswap.
The community is strong with over 7 Million accounts, a huge social media following, and billions locked up in DeFi. However, with a growth hacking mastermind like Sun, you never know how legit these numbers are.
Have a look for yourself on the #TRONchievement for a quick glance at what they are doing.
Will I buy it?
Yes and Yes. Tron is a previous top 10 coin, which dropped to #22 on Coingecko. With their community and marketing mindset, we should be able to reach the previous ATH within a few weeks. I can already imagine the storm of tweets by Justin when the price moves upwards. Fundamentally, I don’t believe in Tron and its published numbers. However, for some gains, I’ll leave that aside.
More Old Altcoins
I didn’t cover all the coins I wanted to in this piece. Over the next week I’ll look at the following altcoins:
- Bitcoin Cash
- Ethereum Classic
New Generation Alts
I’m currently also holding some exotic new altcoins like:
I will also cover these coins later this month or in March and help you find new hidden gems in the wild west of Altcoins 2021.
I started with the old generation of alts, as I believe they are likely to catch up before the new wave starts booking insane gains.
You can buy all the alts I talked about on Binance, and if you sign up through this link we both receive 10% cashback of your trading fees. Not bad right?
Don’t Invest What You Can’t Lose
Back in 2017, most of my friends were blindly shooting bullets into ICO’s. If there was some hype, they bet big and tried to get out before the dump. I’m not a huge fan of this strategy. I like coins with fundamentals and history, but I do look at pumpamentals.
If you invest in shitcoins without fundamentals, and you miss the boat on cashing in on your profits, you end up (like many people) holding a bag of bad altcoins, which in the end turn out to be close to worthless.
Don’t be that guy.
You need some, as Ivan on Tech would call it, “big boy pants” to invest in an altcoin, and a strategy to take profits and move on.
When I decide to buy an altcoin, I do look at charts to find the right entry and exit point, based on technical analysis. More on that in future blogs.
The coins I mentioned above, I’ll buy and hold until they are close to their previous ATH. Then I look at charts to find exit points. I’ll reevaluate my holdings every 2 weeks to see if there is new information available in the market that might change my decision. This is my personal strategy, which might not work the same for you.
Always make your own decisions and evaluate over time.
Last, but not least. If you don’t have enough funds available to invest much, you should have a look at this blog that explains how you can earn crypto with DeFi.
Now let’s moon!