Traditional wealth management is going through a disruptive phase as Bitcoin and digital currencies hit the multi-trillion-dollar markets by storm. Banks will take the biggest hit as cryptocurrencies make waves. Cryptocurrencies hit the traditional banks in every form they can, from yield generation to lending, borrowing, and investing.
Banks currently offer roughly 0,01% yield to your invested capital, which is downright ridiculous. On top of that customer price index has grown from 160 to 272, meaning 58.8% in the last 25 years. And let’s not forget the monthly fees you have to pay to the banks when saving money.
Currently, the inflation rate is sky high at 5.4% as the U.S is printing money at an alarming rate. All this eventually leads to a situation where your hard-earned money has little to no value. The exact reason why Bitcoin was invented in the first place, is to prevent inflation and stabilize the monetary value of a currency.
If by any chance you are keeping your money in the bank, you can expect your money supply to fade away 5% in a year. Even though $1000 stays in your bank account intact, the purchasing power fades away and thus you are losing money in a sense.
0.001X Stock Market
The stock market is the next best thing to increase your wealth over time. The stock market however is already a bit old, clunky, and slow to make money in. For you to make gains in the stock market you would need to invest in technology and or do some serious dividend trend investing strategy to get ahead of inflation, CPI, interest rates, salary increase budgets of 3%, and so on. The situation is pretty unbearable, your paycheck increase is dragging behind the inflation rate and the traditional wealth management has zero interest to help you out.
The reason why the stock market goes up all the time is the fact that the U.S economy can’t stand the situation where the stock market would collapse. Thus they make sure it will give a rather stable upside to the people invested in the market. Also, the reason why it’s going up a few percentages at a time is that there are quite a lot of people playing in the stock market.
The total stock market size is roughly $95T and that kind of money is split among many people, making the stock market less volatile to the emotions of an individual or a group of people. COVID-19 made a massive impact on the global economy because the event was global and affected everyone.
Small news here and there does not affect the stock market because the news is usually a bit more local and thus the effect on the stock market stays relatively low, thus making the overall market gain momentum to the upside continuously. Until big enough disruption is made.
When stocks crash 8%, Bitcoin crashes 16%. When stocks recover 2%, Bitcoin recovers 8%. In 2020 February, S&P500 dumped roughly 34% and recovered in the next 1,5 years 102%. During this same time period, Bitcoin dumped 33%amd recovered 632%. So even if the stock market dumps, and with it, Bitcoin dumps the recovery percentages are in favor of Bitcoin.
The mentioned disruption comes in the form of Bitcoin. Bitcoin has been the best-performing asset in the last decade or so. Bitcoin first started trading from around $0.0008 to $0.08 per coin in July 2010. Currently, Bitcoin is valued roughly at $50,000 (though massive fluctuation takes the price from one end to another), so the price has grown 62,499,900% since the early days. If you bought 100 BTC in the early days, it would be worth $5,000,000 today. However, Bitcoin is seen as a super volatile asset and a risky investment.
Greater the risk, the greater the rewards. When we think from the crypto world perspective, it’s pretty safe to say that Bitcoin is the safest investment decision one can make in the crypto market. It’s the least volatile asset you can own in the crypto market.
Even in the current market conditions that are present in the crypto market, one can gain 60% profit in a matter of a few months with Bitcoin. Try to do that in the traditional stock market. You can probably get that kind of return in a year in the stock market, whereas in the crypto market, the returns would be roughly 800% and that’s with the “safe” Bitcoin token.
When we compare BTC returns to the altcoin returns, then we can conclude that BTC returns are somewhat mild.
2X Large-Cap Altcoins
Large-cap alts means large market cap altcoins or alternative coins to Bitcoin. If Bitcoin for some reason in the future will be flipped by Ethereum for example, then Bitcoin would become an altcoin.
The reason why altcoins have the 2X growth factor in them is that when you compare the altcoin gains to Bitcoin, they are more than often 2X to what Bitcoin is doing, up or down. When Bitcoin has a 2% pump, altcoins such as Ethereum or Cardano have a 4% pump.
The reason why the altcoins pump more is that they don’t need as much money as Bitcoin to move the price up or down. This yet again ties into the fact that the crypto market has not yet seen mass adoption. Mass adoption brings the volatility down as more and more money is invested in the market, making the pumps and dumps smaller.
The reason why Bitcoin has the least ups and downs is that there are already a lot of people owning Bitcoin, though there are always whales among Bitcoin holders that can still easily manipulate the market at their will.
- Solana (SOL)
4X Mid-Cap Altcoins
Blockchain ecosystems are always built under an umbrella of a bigger blockchain like Ethereum. When you see a token like PancakeSwap listed rather high in the list, but not having the blockchain element in it, then we are close to the acknowledgment of what is a mid-cap altcoin.
A mid-cap altcoin is a coin that more than usually belongs inside a blockchain ecosystem or hasn’t yet experienced a greater sense of network effect. Meaning that the token isn’t yet used as much as other major blockchains.
Yet again, as the market cap is smaller, the price can be manipulated easily by large token holders. This is where yet again blockchain ecosystem knowledge comes to play. When and if you buy a token like Solana that blockchain goes up in value. More than usually all the underlying dapps like Serum, Raydium also go up in value, except this time it’s in the effect of double in comparison to Solana, but 4X in comparison to Bitcoin.
If Bitcoin goes up 2%, usually all the major blockchains go up by 4%, and the underlying dapps go up by 8% or more.
- Solana (ecosystem) – SRM (Serum)
10X Small-Cap Altcoins
Small market cap altcoins are ones that haven’t yet gained that much traction but are on their way to doing so. Usually promising DeFi projects tend to have these 10X + pumps when the major blockchain has a pump.
Small-cap alts are already super risky investment decisions and should not be taken lightly as the whole project could very well be a scam or something that never sees true adoption. There are already more than 11,000 projects and roughly 99% of them are more or less worthless projects (unfortunately), but this is where you will find those rare gems that just ahvenät yet gained traction but will more than likely gain traction in the coming years.
These altcoins are always risky investments and should be approached with the mindset of losing money is more than likely to happen.
- Solana (ecosystem) – SUNNY (Sunny Aggregator)
100X-1000X Initial Coin Offering
Projects that have not yet even been released for the public to invest in. ICO as in Initial Coin Offering, these are the very best places to find those life-changing investment opportunities. However, before shelling your coins to a project you need to understand blockchain ecosystems, how crypto markets work, and why certain projects fail and others succeed.
One good example of a successful ICO was the launch of ATLAS and POLIS tokens in FTX.com. FTX.com is a trading platform and Star Atlas is the play-to-earn game that listed the ATLAS and POLIS tokens for the public to buy.
The reason why ATLAS and POLIS tokens had such a huge demand for them was that the community around the project sees the project, product, and vision Star Atlas is aiming for something that they want to be a part of. Star Atlas hit certain marketing points at a certain time frame, which made the ICO a huge success.
At the launch of their tokens, the play-to-earn model was/is a huge and hot topic inside the crypto industry, on top of that they brought AAA-level visuals to the play-to-earn model with the implementation of Unreal Engine 5 (yet again just announced technology that makes a world of difference to gaming). Before we’ve seen subpar visuals with other P2E games out there (including Axie Infinity) and Star Atlas showing next-gen visuals just made the community go wild and thus the ICO saw a massive combined (ATLAS & POLIS) trading volume of more than $40M in a matter of 1 minute. That’s volume and something that takes the earnings to 1000X.
- Solana (ecosystem) – ATLAS, POLIS (Star Atlas GameFi project)