The End of Altcoins? #illumedati


Hey everyone, it’s Whatever Wednesdays again. Today we’re going to ponder, is this “The End of Altcoins?

The End of Altcoins?

Stock Photo from: Pixabay

The End of Altcoins?

Well, let’s first back up and explain what an “altcoin” is. Basically, it’s any cryptocurrency that ISN’T Bitcoin. For example, the biggest coin after Bitcoin is Ethereum. For this reason, Ethereum is considered the leading altcoin. As of late, altcoins have taking a significant beating when it comes to price. There are many reasons for this. One is that faith in cryptocurrency is shaken, and people pull money out of things they consider to be unstable (altcoins) into what they consider more stable (Bitcoin). Or, if you’re really scared, you pull out of the crypto ecosystem completely, back into fiat (dollars, euros, etc).

This has a ripple effect on the rest of the ecosystem. Bitcoin goes down, Ethereum goes down, altcoins go down. The smaller you are, the more hurt you usually get. However, as of late, there has been a new problem:

ICOs dumping their Ether (ETH)

So during the last few years, most Initial Coin Offerings (ICO) were built using the ERC20 standard on the Ethereum blockchain. In general, while they accepted both Bitcoin and Ethereum, I would guess most of it came in the form of Ethereum’s token Ether (ETH). For example, EOS raises ~$4 billion worth of Ether for its ICO.

Now, it’s been awhile and these projects are either running low on funds or just trying to get some their money out. This compounds the problem. So Bitcoin goes down. Ethereum goes down. ICOs are dumping their Ethereum, which pushes its price down even more. This pushes the other smaller altcoins down even more.

This is kind of the perfect storm or maybe just the catalyst to push altcoins over the edge. Like I’ve said before, I think this is the beginning of the end of the beginning. Over the next 6-12 months the smaller market cap coins will see smaller and smaller trade volumes. You will see more and more cryptocurrencies becomes delisted from exchanges. It’s already happening.

People are calling this the “Altcoin Purge” (again).

However, like I’ve said before, it won’t seem like that. You won’t see articles about 500 coins being delisted at the same time from major exchanges. It’ll be slow. Perhaps 10-15 coins will delisted from exchanges at time due to poor trading volume. However, what you will see is that these announcements will come happen much more often. Also, like I said coinmarketcap and other sites like that won’t delist coins easily.

For example, Bitconnect is still on coinmarketcap which has been known as a fraud for quite some time. It still has a market cap for ~ $6 million, while in reality being worthless since no one would actually buy it.

Now then, a coin being delisted from one exchange doesn’t mean it’s dead. Perhaps that one exchange accounted for very little of its volume and simply wasn’t profitable enough for the exchange to keep it listed. However, if you see a coin get delisted from a major exchange like Binance or Bittrex, that is probably cause for some alarm. However, major exchanges don’t delist coins very often. In recent memory, the only coin delisted from Binance was Centra Token (CTR), which was a known scam.


So.. who will survive?

Ahh yes, the million dollar question. Which altcoins (if any) will survive?

This goes back to my old post about The 4 Pillars of Crypto Investing (Gambling). Which coins are most unlikely to go to zero?

My overall stance hasn’t changed.

1st Pillar

I still believe that Bitcoin and Ethereum aren’t going anywhere.

2nd Pillar

Additionally, I think it is also unlikely that Litecoin or BitcoinCash will go anywhere either.

The privacy coins, Monero and zCash are also unlikely to anywhere. However, if there is a mass delisting of privacy coins from major exchanges, accessibility will be an issue. This would then relegate their use to darknet and dark markets only.

3rd Pillar

Ripple (XRP) also is unlikely to go to zero. It’s simply become too big at this point, with too many partnerships. It only takes one institution to use xRapid before others fall into line. However, it remains to be seen how much usage will effect its price.

However, I’m not really sure what’s happening with Waves. I haven’t heard of any real progress since I wrote that post — so I’ve kind of lost faith in them.

4th Pillar

As you all know, I believe in Cardano, and that hasn’t changed. It’s the horse I’ve chosen in this race and I’ll just let it run. People tend to attack Charles Hoskinson a lot for how he acts/reacts on Twitter. However, you need to understand that he is just a regular guy and he wears his heart on his sleeve. What I like about Charles the most is that he accepts what he doesn’t know and then finds people who DO know to help him. As a leader, you should never be the smartest guy in the room.

However, for Steem and IOTA, I’ve kind of lost faith in these platforms. It is also possible that they still do pretty well. However, I don’t really understand the direction STEEM is going in and what the incentive to buy their token is. Additionally, IOTA wants to be the token to run the Internet of Things, however, I don’t really understand how they plan to do it with their “Tangle”. The choice to use a ternary system rather than binary also doesn’t make sense to me. Additionally, they’ve had drama between them and MIT as well as some internal squabbles which makes me worried about their leadership a bit.

I did own a little bit of Funfair and Basic Attention Token for awhile as well. I still think they are very interesting ideas. However, I think they will both have difficulties becoming mainstream.

Transparency:

As you would expect from my above comments, I only hold Cardano and XRP currently. This is likely where my cryptocurrency holdings will stay for the foreseeable future. For those who are wondering I’ve never sold any Cardano or XRP. I just bought my small chunk and held it. As you would expect, I run the Cardano Blockchain Honolulu Meetup, so I really believe in it.

Howvever, I must remind everyone that when I talk about the cryptocurrency I own, it’s a very small amount, in the realm of “gambling” or “play money”. It is money I can afford to lose.

Cryptocurrency is high risk gambling. Only invest what you can afford to lose.

One more thing…

I think we’ll see the coins without use cases, products, or progress beginning to disappear by year’s end. 2019 will likely be a year of consolidating of projects. Then when institutional money comes in, you will see a huge impact on the “top coins” which have strong foundations, excellent teams, and large ambitions. Those left out of these “top coins” that institutions invest in will have a hard time. The retail investors will likely follow the big money and pull out of the smaller coins.


TL;DR

Altcoin Purge? Altcoin Winter? End of Altcoins?

Maybe.

I still believe in and hold Cardano and XRP — but just remember it’s a very small amount of money.

Cryptocurrency is high risk gambling. Only invest what you can afford to lose.

I think we’ll see the coins without use cases, products, or progress beginning to disappear by year’s end. 2019 will likely be a year of consolidating of projects. Then when institutional money comes in, you will see a huge impact on the “top coins” which have strong foundations, excellent teams, and large ambitions. Those left out of these “top coins” that institutions invest in will have a hard time. The retail investors will likely follow the big money and pull out of the smaller coins.

Whatever Wednesdays Sensei

-Sensei

Agree? Disagree? Questions, Comments and Suggestions are welcome.

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