When you research and operate in the cryptocurrency world, it’s hard to focus on anything else. We of course do — we also research and analyse small- and microcap stocks. And we uncover the biggest, most exciting technology investment stories in the world.
Your editor runs three investment services, helping everyday Aussies build wealth through investment ideas you’d simply never find in the mainstream.
One of our biggest and most exciting ideas, however, has been cryptocurrencies. Well, the idea of cryptocurrencies wasn’t ours. But we certainly have been huge advocates of this tech breakthrough for years.
We’ve been so hooked with it that we decided to write a book about it all. This is to give everyday Aussies a chance to understand why cryptos exist, and what future potential they have.
Towards the end of 2013 and into 2014 we became involved with ‘altcoins’. This is simply another term for cryptocurrency, or ‘cryptos’.
As we truly started to understand how big this all was we dug deeper again. We could see the potential from the early days of bitcoin. We could tell that this was a development of an entire new alternative financial system.
Bitcoin, however, was always more like an asset and a currency. A bit of both. And even now it continues to be that way. But these altcoins, they were something else.
They were taking the principles of bitcoin and expanding on them. They were adding extra layers of security. Some were focused on privacy. Some were focused on faster payments. Some were just there for a laugh…like dogecoin.
But somehow these coins continued on. Well, some of them did at least.
Coinmarketcap currently lists 853 cryptocurrencies. 609 of them have a ‘market cap’ of less than US$1 million. Around 500 have a ‘market cap’ of less than US$100,000.
Most crypto in existence have average trading volumes of less than US$10,000. And most of them have trade volumes so low (less than US$500) Coinmarketcap just lists them as ‘low vol’.
Here’s the thing. Almost every one of these ‘crap coin’ cryptos will cease to exist in the next five years. And of the ones that do have bigger market caps have trading volumes in the thousands, maybe even millions…they’ll cease to exist too.
There are a lot of cryptocurrencies out there that are nothing more than a good website, some active social media accounts and a decent whitepaper — or ‘slideware’.
This means they present a good show, but there’s little in the way of future value. The chances of them developing into something valuable and tangible are remote.
In fact we’d even go so far to say that around three quarters of all cryptos you see today will fail.
They might not disappear like other cryptos from the past. But they will be worthless. They will have value of $0. They will crash, burn, and take a lot of foolish money along for the ride.
We know what that looks like. We’ve seen coins in the past rise and fall. Some have risen from the ashes to build something truly great — like dash.
But some just don’t exist anymore. Or some that rose to massive popularity and then crashed are now trying to cash in on the new hype around cryptos.
For example, Mazacoin. Here was a coin that said they would be the currency of the Sovereign tribes of North America. Mazacoin debuted in 2014 to huge popularity and hype.
This was going to be the currency of North American casinos — that was the claim in a number of forum chats. It saw mazacoin go from a ‘market cap’ of around US$100,000 to over US$10,000,000 in a month. A couple months later it was around US$10,000.
And by 2015 the total network value of mazacoin was worth…wait for it…a whopping…US$8. Mazacoin was intrinsically worth nothing, because no one was using it. They had grand plans, a big idea, and plenty of hype. But no substance.
Mazacoin still exists, but it’s worthless. And in our view, it will never amount to anything.
We expect that most crypto in existence will suffer the same fate.
There will be a huge cooling off for ‘crapcoins’. Many will tumble. But while many will suffer, there are many more that will thrive.
No bubbles here
This is where things get really interesting. You see, if we’re so negative about the future success of so many cryptos, then surely we must think there’s a bubble forming.
Well no, not really. No bubbles here.
You see, you can’t think of cryptocurrencies and cryptoassets in traditional finance terms.
On one hand there will be bags of cryptos that crash and burn. Perhaps many of them in one fell swoop. But this won’t drag on the whole ecosystem. If 500 cryptos all crash in value, money won’t exit this ecosystem and flood back into fiat money — it will simple reallocate itself into other, better cryptos.
This is where people who don’t understand crypto fail to see what’s really going on. When fiat money exist the fiat system and enters the cryptoeconomy, it doesn’t come back.
Sure, sometimes it does for people just looking for a quick, fast buck. These punters will move fiat money in and out of crypto and fiat systems all day long.
But the real, long term visionaries won’t ever move their money back into the fiat world. They will shift into cryptos that allow them to operate in the real world.
They will do this through cryptos that have real world, tangible value. These cryptos will be involved in payments systems, data transfer, communications platforms, identify verification, cloud technology, compliance and regulation tech, property transfer, and artificial intelligence networks (to name a few).
For every new technology you can think of there is a development in the crypto space to decentralise and distribute its network. Now that might sound a little complex. But understand this, the crypto world isn’t just an ‘investment option’.
This isn’t a new way to invest fiat money. This is a whole new financial system. External to fiat money. The money (crypto) flows in and around this existing system. It flows into new developments, around to new networks, between users, buyers, sellers and the other new developments.
This is the single biggest financial revolution in history. And to really understand how big, you should read our special report to get the low down.
When you have, you must shake your preconceptions of the traditional financial system. You must view this for what it is — new, and like nothing else the world has ever seen.
Editor, Australian Small-Cap Investigator