I love volatility. Over the last year, we have seen some incredible volatility in crypto markets. I might be addicted to it and I can’t get enough. But there is a method to my madness and I want to share that with you today.
First of all, I’m not suggesting that you buy these tokens, especially if you’re afraid to lose money. This isn’t financial advice, it’s just my take on how to make money in the current market. I’ve made money, I won’t go into the list of coins that I’ve made money on recently, but I’ve cleared five figures on more than a couple of my trades and I seem to have a nose for sh*tcoins. So, if anything, I look at buying these tokens a lot like buying a lottery ticket from the local gas station.
I have told friends that if they can’t handle the volatility, get back into the stock market and make it the old-fashioned way–take long positions on companies that pay dividends, choose companies that you buy products from today and see buying more of in the future. Think Coke and Pepsi products, or oil, or electricity. These are all things I’ve invested in in the past, and also still invest in today. You can’t go wrong really with this approach to buying stocks.
Crypto is Exciting
We’ve seen the rise and fall of different coins that have made us shake our heads in confusion. I can’t tell you the number of garbage articles I’ve read recently that are just all clickbait and reading them is nearly impossible with all of the advertisements interwoven throughout. But, as promised, I want to share my “guide” for evaluating and buying these tokens–how do you know a good project from a bad one? Why would you even try? Well… you can make some serious cash.
If you had invested $1000.00 bucks into Dogecoin less than 1.5 years ago, that 1000.00 USD would be worth over 300,000 USD. What about Twitter’s new baby coin, SafeMoon? 1000.00 USD would have made you about the same 300k–in only about 4 weeks. SafeMoon is something I looked at but I didn’t buy–I missed on that one. There’s a reason why though.
What kind of crypto are you buying?
This should be the first question you should ask. I break it down into two main categories. Traditional Crypto Projects and Moonshot Projects.
Traditional crypto projects are like Bitcoin, Ethereum, Chia Network, Helium Network, Machine Exchange Coin, and others. They have professional development teams working on them, they are well established with actual functionality in the real world. Now their products might not be that great or interest you, that’s not the point. They might fail faster than some shitcoin project, but they have whitepapers, companies, and other real-world entities involved with them.
Moonshot Projects are projects like Shibu Inu, SafeMoon, Australian Safe Shepherd and Dogelon Mars, these projects remind me of people who buy Star Wars toys and store them in their basements for years and years. Yes, some of them have pros working with them on some level, but a lot of them have nonsense whitepapers, or “woof-papers”, and are based on simple popularity. They don’t have much value other than what some Redditor might be telling you. Remember Beanie Babies? Yep, they went to the moon for a while years ago… Worthless as they may be, they got traded for thousands at one time.
Is the token you’re holding valuable because of the social media presence they command? Yep, you’re dealing with a Moonshot Project in my opinion. My advice is to get in when the getting is good and get out as soon as you’ve made a profit. I’ve held more bags than I care to divulge here–and they’ve been expensive lessons. If I’d sold them off when they made me a great return, I wouldn’t have cracked 1,000,000 USD–but I would have had healthy returns and would have had more money to play with later. Moral of the story: Don’t be greedy. If you do pick a Moonshot that is mooning, cash out on the upswing.
Methodology for Buying Traditional Crypto
For traditional crypto, I like the traditional “long” approach. Buy it now and hold it for a long time. You have to do some research first though, even if it sounds like a winner from that article you just read on it from your favorite source. Ask yourself a few questions.
- Does the technology it’s based on do something meaningful? What I mean here is does it solve some scaling problem? Does it help transactions go faster or more securely? Does it provide some service that hasn’t been addressed yet? Bitcoin is a new technology in that it uses blockchain technology to store value in a way that hadn’t happened in the past. Ethereum is more like a platform, I think of it like an operating system that other programs can be built on. I stay away from projects that are just copies of these two, like Bitcoin Gold, or Ethereum Classic–and both have underperformed. When you’re buying a crypto that you want to hold for a long time, read the whitepaper, figure out if the product is valuable to you and if you’d buy it 30 years from now. If the answer is yes, then maybe it’s a project worth investing your money into for the long game.
- Who is developing it? Is the development team made up of people that have never developed a cryptocurrency before? Who are they? Did they just copy some code from some other project and renamed it? If so, that code may never be updated. If you have heard of the developer behind the project on CNN, then you probably have a serious project with a serious team. Do your due diligence and figure out if they are the real deal or not. It won’t be that hard to figure out if it’s a traditional crypto or a moonshot.
- Do they have a marketing team? No marketing team in my mind means it’s a no go. All legitmate coins usually have a marketing team that’s being funded independently and/or by an ICO that happened well before you heard about the coin. If it’s not doing B2B marketing then I’d stay away, you want to buy into projects that are working with other companies, period.
- Is it being added to exchanges like Coinbase? If you’re not seeing mass adoption by legit exchanges then you’re probably dealing with a moonshot. I like using Coinbase as a bellweather. If they are adopting the coin, then I know their research unit has checked it out. Now, Coinbase is just an example–lots of legitimate projects aren’t being traded on Coinbase–but if it is, then they’ve probably at least covered the first three requirements that I’ve listed above.
Methodology for Buying Moonshot Crypto
First of all, there is way more chaff than wheat in my opinion so a healthy dose of caution must be exercised when getting involved with what many FUDders will call, sh*tcoins. Be careful out there–again, do what research you can and be ready to sell. Most of these projects are based on getting in early and getting out at the expense of those who got in late. So if you’re playing in this game, be early. The early bird definitely will get the worm.
Don’t be too cynical. Dogecoin was a “joke coin” back when it started, look where it is today. It’s one of the top-ten most held and traded cryptocurrencies in the world. People have made serious money on Dogecoin and there are now hundreds of dogecoin millionaires. Now, I’m not saying anything more than sh*tcoins happen!
The other general advice I might give to crapcoin investors is to go small. I already told you I love volatility and I love the idea of making a fortune on a relatively small amount of money, but you shouldn’t be putting in 10, 15 or 20 percent of your holdings into these coins… you should be thinking more like 10, 15 or 20 USD at a time. Spread out your investments and watch Twitter like a hawk. LOL, if Elon starts tweeting… get ready to travel to the moon. You can do a little more, this is what I like to do before I get involved. Ask yourself these questions before you go forth and buy these coins.
- Does the project have significant social media presence or marketing? Shibu Inu does, you can see the number of holders from Etherscan, look for numbers in the tens of thousands of users/holders. If you go on Twitter and see that it’s mainly bots and morons tweeting about it, stay away. Do you like the coin? I love dogs and the dogcoin markets–so I’m into them. I like the marketing on them and so that’s why I own some Shibu. Does it mean I’m going to make millions on it? Well… probably not. But at least I like the project–and I like the community.
- Are the top ten holders holding more than 50% of the token? Ever hear the term “rug-pull?” Well most rug-pulls are pulled by crapcoin purveyors after they’ve made their money. You don’t want to get involved in a project where half of the tokens are being held by just a handful of people. Why? Well, that would defeat the major point of blockchains and the whole cryptocurrency movement–decentralization. You want to look for projects that have a good number (think more than 1000) of actual holders that aren’t all on the same team. Make sure that the project token holders are decentralized. That’s going to limit the chance that your funds get pulled.
- Does the project have liquidity? All projects need money to start and survive. If the project has less that 100k of liquidity, then I’d probably look elsewhere. It costs real money to get coins going. The more money involved within a project, the more serious that the development efforts are behind them… more money means more serious investment. You have to have money to make money after all, the same holds true for these moonshots… A wise meme once said, “No money, no funny.” It’s not funny when your coin goes up and there is no money left in the cookie jar to cash out with.
- Can you trust the project? Looking for trustworthiness isn’t always easy. But, are the developers out in the public talking about their project? Has the project been audited by a group like Certik? Maybe it’s being onboarded by Certik. If it is, I like it much more. That probably means the code is sound and is community-driven like open source software. Scams don’t usually happen when there are prominent developers listed on the webpage of the project and it’s being led by a strong online community.
So, to answer my question above about Kishu Inu. Let’s run it through my Moonshot requirements.
Kishu Inu for the Win!
- Can you trust the project?
- Does the project have liquidity?
- Are the top ten holders holding more than 50% of the token?
- Nope, at the time of writing Kishu Inu has over 200,000 unique address holders with about 25% being held by the top 10 holders. It’s still a lot, but not enough IMO for a rug pull.
- Does the project have significant social media presence or marketing?