Halcyon Days

We all look back fondly on the halcyon days of January 2018 when all time highs were a daily occurrence. There was a big surge of money into the space, the global market cap swelled to an improbable $795 billion. Bitcoin peaked at just over $20K and everybody felt like Nostradamus. Pretty much every project in existence at that time enjoyed it’s all time high during that period. It was the age of the altcoins.

A slew of new or under developed projects were suddenly being viewed with giddy eyes as ‘the next Bitcoin’ or ‘a better Ethereum’ etc. In the market frenzy altcoins gained a relevance and demand that far outstripped even a basic foundational analysis of underlying use cases. There were whitepapers being valued in the hundreds of millions! There is no denying the prevalance of scams throughout this period. The recent Coinbase Custody list does a good job filtering!

The Crash – Altcoins

It was of course too good to be true, crash, bang, wallop. Things have stabilised and the global marketcap has swung between $250 billion and $330 billion for the last two months. This is roughly the same level as late November 2017.

Bitcoin’s dominance of the market is always an interesting indicator of the market’s belief in the ever growing list of altcoins.

In November/December 2017 Bitcoin had between 50% & 60% dominance. The crash from 2018 hit Bitcoin hardest first and it’s dominance dropped to all time lows through February and March 2018. Bitcoin dominance has been climbing steadily since May and it looks likely to hit the 50% mark in coming days. It is maybe only now that we are seeing the final impact of that February crash on the altcoin market.

I posit the dwindling belief in altcoins has three root causes

Lack of real business application

A distinct minority of altcoins are fully developed or offer any real compelling business service at present. As enterprise’s they are young and do not offer short term revenue potential, this is a turn-off for short and midterm investors making decisions based on foundational analysis.

2. Perceived insurmountable adoption challenges

There is a plethora of projects that have grandiose, society re-defining end goals. There is a philosophy of societal liberation present in many projects, some of which challenge stringently established norms. For the non-political investor these ideas can be perceived as a major barrier to adoption.

3. Dependence on Ethereum

A large amount of altcoins are in fact ERC20 tokens for use on the Ethereum blockchain. There are some concerns about scaling and transactions per second with Ethereum. Where an investor lacks confidence in Ethereum itself, he or she is likely to lack confidence in projects using the Ethereum blockchain.

Promising altcoins I still hold include;

TRON — Justin Sun might not be everybody’s cup of tea but there is no denying that TRON are delivering on the whitepaper. They have hired a very strong team and continually hit their development milestones. Their activity in terms of partnerships has been commendable too, they are building a network in the hundreds of millions that is ripe for phased introduction to the TRON project. The headline partnership with Bittorrent which will involve Bittorrent running on the TRON network will see TRON likely surpass Ethereum in terms of active users and transaction counts. Read more

Ambrosus — Ambrosus is an ERC20 token that underpins a compelling supply chain innovation. The Ambrosus blockchain along with IoT integrations allows for a fully transparent supply chain. Ambrosus has impressive partnerships already and offers a demonstrable competitive advantage in terms of logistics tracking, counterfeit reduction and supply chain optimisation. Read more

Linda Coin — Lindacoin is a peer to peer hybrid digital currency. Linda are now developing the high speed LindaX platform. dApps will only appear on the LindaX ecosystem if approved by the community. This is an important step in battling scam ICOs. It also offers partnership opportunities to other cryptocurrencies to use the Lindacoin platform. Read more

*Please note this is not financial advice – do your own research!