Have you ever made popcorn? Not that rubbish you zap in the microwave – the proper stovetop kind. Nothing happens for a while, but after the thin layer of oil at the bottom of the pot starts to sizzle and smoke, and the bright yellow kernals heat up and get excited, you hear a single pop. This is followed a few seconds later by another pop and then another one, and then all of a sudden they start exploding in rapid-fire succession.
That is exactly what the altcoin market is starting to look like.
Asia Times reported on Wednesday that former Prudential CEO George Ball advised investors to position themselves for a major rally in September. Ball’s choice of metaphor was not popcorn popping but rather a fuse being lit. What is going to light it? Currency devaluation resulting from unprecedented levels of monetary stimulus in response to the Covid-19 crisis, Ball believes.
Old-school investors like Ball, a reformed crypto skeptic, and hedge-fund tycoon Paul Tudor Jones are increasingly turning to crypto now that the credibility of its safe-haven status has been reinforced by major institutional investors like Grayscale and Fidelity joining the party.
Is it really a safe-haven asset? That remains to be seen, but with some conservative Wall Street players who regarded bitcoin with contempt a few years ago now taking the “digital gold” narrative seriously, it looks like it may have that potential. Money is, after all, a belief system, and there is a growing consensus that bitcoin is the real deal.
Organizations like Grayscale don’t invest in an asset without first getting some very smart people to look under the hood to make sure it is in sound condition and has what it takes to perform well under tough conditions.
The institutional FOMO that was expected a few years ago but did not materialize appears to be kicking in.
Predictably, this growing confidence has spilled over into the altcoin market, where bargains can still be had and an astute choice can result in 1,000X gains.
While many coins were down on Friday, there were also some serious gains made. OMG Network, for example, was on an absolute moon mission, rising 91% in 24 hours to $7.72 at the time of writing. The non-custodial, layer-2 scaling solution for transferring value on Ethereum was just $1.95 on August 15. Its all-time high was $25 in January 2018, so it could have plenty of room to grow. Ox, Icon, Qtum and Ampleforth were also top gainers.
With the number of altcoins on CoinMarketCap steadily growing – 6,530 at the time of writing – it is increasingly difficult for investors to separate the wheat from the chaff. Investing in a basket of the top 20 by market capitalization is a relatively safe bet in a bull market, at least by crypto standards. However, identifying the small-cap coins that can do a 1,000X is much trickier. Those who consistently succeed have usually done extensive research or acted on the advice of someone who has.
One thing crypto veterans generally agree on is that you should never FOMO (fear of missing out) into an asset – buy it when it is going up. If you miss out on one, there are many, many other promising projects – or at least speculative plays – to choose from that may provide dramatic gains for those who have done their homework and have the patience to wait for them to pop.
