My power 5 long-term cryptocurrency investments

Four months ago the cryptocurrency market was dominated by one cryptocurrency – Bitcoin. Bitcoin controlled more than 90% of the market cap of the entire industry. Behind Bitcoin was Ethereum with 5% market cap, and then the combined market cap of all the remaining cryptocurrencies in the market controlled the rest. Today, Bitcoin controls 39%, Ethereum 28%, and the remaining cryptocurrencies control the remaining 33%. 

As acceptance and adoption of the blockchain and cryptocurrencies in general grows, these “altcoins” (alternative to Bitcoin coins) grow at an incredible rate. Some cryptocurrencies which were discovered over the past four months grew by over 100x. To put that into perspective, you would need to obtain the market average 7% return per year for 68 years to reach the same return that these cryptocurrency investments accomplished in four months. The question no longer is “will Bitcoin be able to gain acceptance?” but rather, “what cryptocurrencies will be the next Ethereum?” 

Finding your golden ticket 

I’ve been monitoring the altcoin markets for a couple of months now, analyzing trends and the elasticity of cryptocurrencies relative to Bitcoin/Ethereum. Elasticity is an economic concept which is generally used in explaining the relationship between a demand curve and the price of a product. Products that are inelastic do not change their demands much relative to changes in price. Products that are elastic change drastically relative to changes in price. 

Through monitoring these investments, I’ve found that there are some investments that have sustained steady growth and have had a relationship with the trends of Bitcoin/Ethereum. After finding these investments, I then investigated them by reading their whitepapers, analyzing their historical price trends, and investigating their company and products/services.  

All of my research has led me to make the decision to diversify my investments between five cryptocurrencies. The reason why I diversified is due to the uncertainty of the future of individual cryptocurrencies. I personally believe that the market will continue to grow with dips and crashes along the way, but there will certainly be some cryptocurrencies that trend to obscurity while others prosper. Through diversification, I can have four of them cease to exist, but if one of them returns a return of investment (ROI) of more than 401%, I will be profitable. 

Diversification is often a smart idea to mitigate risk. Although others may invest everything in that one investment that takes off, many who do so will lose a great deal of money. Without further ado, these are my power five cryptocurrencies that I decided to diversify my long-term investment across.  

Stratis 

Stratis is my favorite altcoin other than Ethereum. The mission of Stratis is to help companies integrate blockchains into their business. They do this by providing them an alternative platform to create their blockchain projects as opposed to the traditional Bitcoin blockchain. Users are able to develop Stratis blockchain applications in C# and the Microsoft .NET framework. 

With the growth of blockchain, one of the major blockades for companies to adopt them will be the lack of knowledge about the concept and how to utilize it. Stratis plans to provide consulting to companies who are interested in implementing blockchain in their companies. They also have an extensive website designed to help users who are just beginning to look at blockchains. There is a section of their website dedicated to documentation, coding examples, and connecting users to programming professionals who can help jump start the users’ progress. 

Price: 

• March 1 - $.76 
• May 1 - $.74 
• June 1 - $5.73 
• June 25 – $7.66 (907% increase)

- image generated from coinmarketcap.com

Ubiq 

To date, Ubiq has provided me with my best returns. This cryptocurrency however is also one of the investments that I’m taking the biggest chance on. Ubiq is a decentralized smart contract and implementation platform. Their mission is to provide the user with the ability to create and implement smart contracts in an automated world.  

This concept may sound familiar as it is similar to Ethereum. Ubiq’s claim is that they eliminate some of the inherent issues in the Ethereum network. On their website, they mention the possibility of future forks and instability in the Ethereum network. Their plan is to provide a “stable and reliable platform,” which their users can depend on.  

Another main difference between Ubiq and Ethereum is their block creation. Ubiq creates a new block every 88 seconds as compared to roughly 14 seconds for Ethereum. This time difference allows older GPUs to still be able to mine, but also means that it takes longer to confirm transactions. For more information on this visit https://medium.com/the-ubiq-report/ubiq-in-one-page-3e3d335064fc. 

While it will be incredibly difficult to compete with Ethereum, I think that Ubiq has the possibility to succeed, even if it does not reach the size of Ethereum. At its current market cap of $77,263,243, I see the possibility for a lot of future growth. 

Price: 

• March 1 - $.04 
• May 1 - $.25 
• June 1 - $1.41 
• June 25 – $2.07 (5,075% increase)

- image generated from coinmarketcap.com

Golem 

Golem created an interesting concept of sharing that other cryptocurrencies have now begun to try to introduce as well. The mission of Golem is to create an environment where people are able to borrow computing power from other users. Hosts offer their computing power to Golem’s “supercomputer” in exchange for a fee. Borrowers then use the computing power of the supercomputer in exchange for a fee.  

Many cryptocurrencies allow people to mine their cryptocurrency. Bitcoin for example currently makes a new Bitcoin block every 10 minutes. Miners attempt to solve complex equations in order to be awarded the opportunity to have that new Bitcoin block. This has led to miners investing in high-tech computers and new sites that let people “own” the computer that the site is running. Golem can be the next evolution of mining in which people will utilize Golem’s supercomputer to mine.  

This concept also has a lot of promise in the stock market. Automation has taken over the stock market since the 1980s. With high frequency trading and computer algorithms scanning news releases to make automated decisions, nanoseconds can make the difference between a profitable trade and a loss. If Golem can continue to develop and reach their goals, financial institutions may begin to borrow processing power in order to gain nanoseconds on their competition. 

Price: 

• March 1 - $.02 
• May 1 - $.24 
• June 1 - $.45 
• June 25 – $.60 (2900% increase)

- image generated from coinmarketcap.com

Waves 

Waves is an online application in which users are able to create brand new cryptocurrency tokens in minutes. These tokens are then able to be exchanged and open to mass distribution like other cryptocurrencies. 

As altcoins grow in popularity, cryptocurrencies are having ICOs ever more frequently. On a daily basis new cryptocurrencies are created and exchanged for Ethereum and Bitcoin enabling investors to invest in these new cryptocurrencies. Waves allows users to create new cryptocurrencies of a varying amount and name within minutes. They are then able to use smart contracts to distribute them to investors. Waves will streamline the ICO process in the future and with growing popularity has the opportunity for mass adoption.

Price: 

• March 1 - $.19 
• May 1 - $.61 
• June 1 - $3.07 
• June 25 – $4.81 (2,432% increase)

 

- image generated from coinmarketcap.com

Ethereum 

Of course, I could not leave Ethereum out of the mix. Ethereum was the original altcoin, but has grown massively over the past few months creating many new millionaires. The idea behind Ethereum is to bring smart contracts to the world. Users are able to create smart contracts between two or more parties. These smart contracts are completed and authorized through the use of the blockchain.  

One of the biggest benefits of Ethereum that I see as undervalued and underrepresented at the moment is the value of synergy with other cryptocurrencies. As the frequency of ICOs have increased, I have also noticed that the majority of them are now being backed by Ethereum. The Ethereum token is being used as the medium of exchange to get into these new ICOs. In addition, the agreement between the two parties to exchange the two cryptocurrencies are generated from smart contracts.  

Bitcoin has always been the face of the crypto world. As Ethereum passes Bitcoin in market cap over the next few months, I believe that there will be a shift to Ethereum getting more media and mainstream attention.  

Price: 

• March 1 - $15 
• May 1 - $78 
• June 1 - $230 
• June 25 – $324 ($2,060% increase)

- image generated from coinmarketcap.com

Risk vs. Reward 

The cryptocurrency market is incredibly volatile. On any given day, it is not uncommon for a given cryptocurrency to lose half of its value or double. While Ethereum is likely my safest investment, it also has the possibility to drop down to $.10 on any given day like the flash crash this week. I have chosen to diversify my long-term investment amount over these five tokens as I see promise in all five of them. Though some of them may fail, diversification increases the probability of long-term success. 

If you choose to diversify make sure that you do your due diligence in picking your investments. Look for spelling errors in their whitepapers (bad sign), evaluate the concept and its practical uses, and investigate the team behind the project. There are a lot of cryptocurrencies out there that will fail, but there are also some prime and ready to make an impact in the future. 

As always, this post is not investment advice and should not be used in any investment decisions. I am not a licensed adviser, but rather am providing my own views on the above material for discussion purposes. You should never base your investments off someone else, and instead should do your own research. 

I hope that you found this post interesting. If you have any questions, please comment below. My goal with this profile is to make frequent posts about finance, cryptocurrencies, investment, and wealth generation. I plan to not only make posts, but also youtube videos, and give away free excel workbooks to assist you in your personal finance goals. If this interests you, please let me know and follow my profile. Additionally, if you would like to reach out and ask any questions/request that I make a post on a topic, please reach out to me at [email protected].