Q1 Outlook
Give me what I want. Money me now. Money me please.
What I Want
We saw throughout 2020 more and more retail piling into crypto not only because of meme coins like DOGE and SHIB but because of NFTs either through Ethereum or Solana. There has been some decent retail participation throughout the whole year, mostly evident by social media. We see celebrities rocking punks and bored apes and people who don't even know what a Bitcoin is talk about NFTs. Many people will point to the past about how Katy Perry's IG nail polish picture marked the last run pico top. I do not believe this to be the case this season.
I could be misreading the market and underestimating the infrastructure that was built to accommodate this next run so I am trying to keep an open mind the best I can. We never saw exchanges shutting down account creations, though we did see exchanges buckle several times due to volatility so these are things to keep in the lizard brain awareness section.
To best guess what happens moving forward we need to assess what really happened in the markets so far and break down what that could mean for future retail froth and FOMO. As stated, we've had a large amount of retail participation so far but not to the magnitude we've seen in the past per se. What were they participating in? BSC ponzis and ETH NFTs for the most part. What did they notice? Low fees on other chains and high gas prices raping their wallets on ETH. All. Year. Long. Everyone wants to look at BTC dominance for an alt season signal but I think you need to be looking at ETH dominance vs alts instead. No one gives a fuck about BTC except wall street and Michael Saylor so I'll still hold my single bitcoin but for the most part I really don't care about that dinosaur useless coin. Pump my bag wall street idgaf.
There were some absolute standouts among L1s. Solana, Avalanche, Polkadot, and Terra are some of the better performers on the year and beating out the old coins for top 25 spots. So my goal is to find things not in the top 10 that should be.
So what am I looking for? I want to see retail to make the hivebrain transition from ethereum to other chains. I want to see enterprise use, not just talk about how each chain can support it. I don't think they all pile into one however. It's going to be an odd distribution that will never go the way you think. Will capital just rotate from one to the next or will it be an outpour into random coins? I don't know, but that's where the plan making and adjusting comes into play. Right now we only see crypto natives really playing with anything outside of eth and bsc, this is evident by the TVL and other things, but I'm starting to see a shift. Whether that be major eth players actually listening to reason and makign the move themselves or if its the beginning phases of retail shift and old talking heads being left behind.
With this participation in other chains we'll see reasoning for doing so. Games honestly can't be played real time and gamers aren't going to pay insane fees just to play their games. Imagine having to pay a $100 gas fee just to claim your prize from winning a match and the value of the match isn't even worth claiming against the transaction fee. Eth maxis will scream at you "but we're working on fixing it! there's a x update in the works" yeah okay bro just tell me when it gets past the ten councils who need to approve it before it goes to vote and by then if its even worth a shit. Of course BTC and ETH maxis will also expound about security and speed and blah blah blah, retail won't care. And it's retail FOMO that will drive this ship through a blow off top. Later after we zero in on what chains we want to put funds in we can look at what in that ecosystem we can do and how to put that new coin to use. For now we're strictly talking L1 altcoins.
I can be honest with myself and tell the truth to everyone who may still be reading this to say that even I got trapped into the maxi thinking by riding Solana eco so hard. It's done well and I think if we turn the selling into buying for Q1 it'll still be a performer but there will be others that perform just as well and better and I'm willing to do the work and find those coins. Now to think about ROI of choice and which is the stronger bet. Do we look at coins who have already been released and just haven't had much in the way of updates until(hopefully) soon? Or do we allocate funds into new projects coming out. Since I'm not in the know as much as I used to be about what's new and what to look for I'll focus on current projects both in and outside top 100.
Of course, this is all under the assumption that the bull market still rages on and bears are dumb poors who are taking their final victory lap before getting shmacked. If this is just complacency and we just eat shit with bitcoin forever and ever then its literally over and if you think this you should stop reading now I guess and not wonder what the next bit or subsequent posts will be about. Have a great day!
Large Caps
Solana - $168.50
Avalanche - $103.50
Near -$16.10
Harmony - $0.30
Mid-Small Caps
Flux
Hathor
Casper
Lukso
Phantasma
Nothing is listed in any particular order and does not reflect capital allocations. These were the coins I had wrote down over the course of the past few weeks so these are the ones I'll discuss briefly. All of them fit a common theme of scalable blockchains for either consumer or enterprise applications. The one I'm most entertaining at the moment is Lukso from the small cap section and NEAR protocol from the large caps. I don't know if I can keep up with updating this as I go along but we'll see. This isn't meant to be a master list but just an overview of what I like RIGHT NOW. There may be other protocols out that I simply don't know about and if you want to share feel free to dm me.
I've put my money where my mouth is and over half of my Solana bag which has brought me this far as been reallocated to Avalanche, Near, and USDC and I'm simply sorting out the weights of the bets I want to take among the small caps.
The easiest way to increase your capital in these coins is by staying up to date on product and coin updates. What are they shipping, what are they working on and what is planned. I'll talk a bit about each coin in subsequent updates. For now, this is what is on my desk. Truth be told I don't know MUCH about the grimey details of each coin yet but that's why I'm here writing this because if I didn't then I'd relax and never do it. Consider this a self motivation to get up of my ass and get back in the trenches.
I’m not going to talk much about the large caps since most of the development on them has already happened and data freely available. The only one I’ll be discussing in any detail is NEAR since its the one out of the large caps I don’t know many details other than data availability chain so it will be the first I will discuss in the next post which I’ll discuss why it intrigued me and why I think there’s room to grow under the right conditions, same for every coin in small cap list. I could simply not end up liking coins in the list and look to find others. We must stay fluid with the market. Many things can change with information discovery.
With that being said, this is the month where we scoop coins and see if they perform into EOM and into the next. If not, then my whole thesis is wrong and i eat some spot drawdown while i revenge short my money back with margin. As a day trader and investor its easy to get the two signals confused and I’ll do my best to not let that mindset get to me.