Pioneering Crypto Projects - The Ultimate Alpha
Diminishing Returns?
Those who are new to the world of Crypto have most likely arrived as a result of hearing about the life-changing gains of early Crypto investors. Many would give anything to go back in time with what they know today. A chance to relive the past, only this time, with a level of insight unparalleled in wealth creation. When you consider that Bitcoin began trading below a penny, it becomes all too powerful.
From a penny to $69K… and currently trading at $37K. That’s a staggering return by any definition. The argument that such enormous gains are a thing of the past is an accurate observation. Yes, Bitcoin can move significantly higher in the coming years. However, it will never again offer investors such staggering returns. The same is true of ETH. This is something I mentioned several months ago.
Take a look at ETH’s performance over the past few weeks. Many altcoins have been rallying during this time, and enjoying enormous gains. However, Ethereum is merely plodding along. Ethereum made up more than half of my portfolio during the previous bull market. However, this time around, my allocation is zero. Holding out for a $10K ETH is a wasted opportunity. It’s 5X from here.
Many altcoins and micro-caps have managed to attain such a return, in a matter of weeks, and the bull market is yet to officially commence. Ethereum is now in a similar class to BTC, in terms of future gains. In my opinion, altcoin investors who have previously been heavily exposed to ETH will have to re-evaluate their strategy or be satisfied with shrinking returns. Ethereum is not going to be providing the stellar returns of the past.
In the previous cycle, Ethereum rewarded investors with a return of approximately 5000%. This is measured from the bear market bottom to the bull market top. In my opinion, Solana will be the ETH of 2025, regarding significant gains, as well as blue chip status. So, where are investors likely to discover true alpha? This is a question I am always looking to answer.
Future Leaders
When it comes to altcoin investing, quality matters. However, it’s not enough. Many quality altcoins will provide significant gains. However, due to being older projects with somewhat mature market caps, their upside is limited. New and up-and-coming projects that are well packaged, together with strong utility and relevance, will outperform the altcoin benchmark in 2025. Quality is not enough!
New projects have an advantage, in terms of growth, and subsequently, price appreciation. Package this dynamic together with a “pioneering niche” and you have a winner. We are already beginning to experience this effect with blockDAG. Take a look at Kaspa’s performance since its bear market bottom in 2022. The low of 2022 is 0.00017… and KAS is currently trading at $0.091.
Yes, that is a 535x (53000%) return in a bear market! Can you imagine what this number will be in 2025? It’s insane! New projects in new and pioneering sectors and technologies are going to rule the roost. Tokenization and AI are still going to be enormous. However, new projects in pioneering/niche sectors have an unparalleled edge. This is why I am always researching new projects.
A new micro-cap project that is simultaneously a pioneering force, packaged with excellence and strong utility is a gold mine! I have seen this dynamic in multiple cycles, and strangely enough, it appears to be producing more significant gains as the industry matures. As I mentioned earlier, blockDAG is currently proving itself to be an innovative niche that can produce several stellar investment opportunities.
Final Thoughts
As always, these are my thoughts, interpretations, and opinions regarding the Crypto market. Conduct your own research and exercise sound investment principles. You are responsible for your investment decisions, so ensure they are well-informed. Enjoy the ride. See you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.