Watch for the hockey stick

Tuesday, 4 September 2018
Melbourne, Australia
By Ryan Dinse

  • You have to be quick to keep up
  • What you need

Ryan Dinse here, taking over the pages of Port Phillip Insider from your regular editor, Bernd, for another day.

Yesterday I wrote about my colleague Sam Volkering’s approach to the cryptocurrency scene. Today, I thought I’d take a step back from discussing individual cryptos and take a look at the broader altcoin scene.

There’s no question we’re seeing an altcoin bloodbath right now. Cryptos are down 70%, 80% or more. It’s indiscriminate.

There’s no accounting for quality projects or quality teams. A lot of the analysis that crypto specialists like Sam and I provide, in publications like Crypto Tech Investor is getting drowned out in the general panic. But I’m confident it’ll be worth its weight in gold once we get to the other side.

Now, I know that doesn’t make it any easier right now. My background is in trading and I know seeing a sea of red on your investments is hard to take, no matter what your head tells you.

But it’s your head you should be listening to. Not your emotions. I’ve been through this situation before myself — both in the crypto market and in the stock market.

I’ve come to accept that it’s the price you pay for investing in such exponential potential.

But from experience I also know things can change fast.

More after a look at the markets…

Markets

Due to the US Labor Day holiday, American indices have been closed.

In Europe the Euro Stoxx 50 index finished up 2.09 points, or 0.06%. Meanwhile, the FTSE 100 rose 0.97%, and Germany’s DAX fell 17.65 points, or 0.14%.

In Asian markets, Japan’s Nikkei 225 is down 10.48 points, or 0.05%. China’s CSI 300 is up 46.09%.

In Australia, the S&P/ASX 200 is down 17.80 points, or 0.28%.

On the commodities markets, West Texas Intermediate crude oil is US$70.29 per barrel. Brent crude is US$78.08 per barrel.

Gold is trading for US$1,197.80 (AU$1,660.66) per troy ounce. Silver is US$14.43 (AU$20.05) per troy ounce.

One bitcoin is worth US$7,296.47.

The Aussie dollar is worth 72.13 US cents.

You have to be quick to keep up

The future of any token’s prices hinges on one thing.

Adoption.

This includes user adoption or business adoption. And when it comes to tech, a high rate of user adoption is what makes valuations grow fast.

Here’s an example in the non-crypto world you’ll be familiar with…

This chart is a bit old but this is what adoption looks like:



chart image

Source: Net Affinity
Click to enlarge

Look at those first two years for Airbnb. Nothing happening at all. And then after a little bit of traction in 2012, things just start to go ballistic…

It’s the hockey-sticked shape chart that all investors live to find.

Which will make this chart no surprise:



chart image

Source: Venture Beat
Click to enlarge

You can see that the funding in 2011 actually came before the exponential growth in listings.

Those early investors saw the opportunity. They saw a fast-growing business that was clearly super scalable.

That’s the key word — scalable.

What you need

Will they all make it? Probably not.

But that’s the beauty of investing like this. You might only need one to come off to make a mint.

Crypto investing is the only chance ordinary people like you and I get to invest in these life changing opportunities. We sure as heck never got dibs on Airbnb, Facebook or Uber…

In the past, those kinds of deals were reserved for the few. The ‘sophisticated’ investors — shorthand for connected insiders — who knew the right people. No plebs allowed.

But thanks to crypto, we all have the chance to take part in this world.

Of course, there are no guarantees in any of this. It’s a risky business. Equality means you’ve now got the chance to do your dough in as much as the next guy. But with good research, a strong stomach and an ability to look forward to what could be a few years ahead, you’re in with a good chance.

So as Sam says in his Crypto Tech Investor updates, try the platforms out when they go into beta or main net releases, and then see if you can get them working in real life. Read about the technology and learn about the important things coming up. Monitor user numbers through such sites as https://www.stateofthedapps.com/.  Connect the dots and have fun.

Prices are the least interesting thing about crypto.

But pick the right projects and they’ll take care of themselves soon enough.

To find out more about the projects that Sam has found, and the gains his Crypto Tech Investors readers have made already, even as the wider market panics, click here.

Cheers,
Ryan