Dear Member,
Altcoins have been taking a hit after a nice bounce over the last week. Bitcoin is down slightly, but everything else is getting hammered.
This is natural after such a big bounce. But it could continue for a while. There are still a lot of overvalued projects out there. Last year we saw a ton of initial coin offerings for “utility tokens.” I believe many of these tokens have a lot more downside to go.
A good example of what I consider an overvalued utility token is dentacoin. It’s a token for the dental industry (yes, seriously). It’s built on top of the ethereum network, so it doesn’t even have its own blockchain. These types of projects have incredible challenges ahead of them. They need to build huge networks of businesses accepting their tokens, which is an incredibly tough task. On top of this, they depend on the ethereum network scaling effectively.
This is a big reason I prefer the most promising pure cryptocurrencies – coins that are laser-focused on challenging fiat currencies. They do one thing – act as digital money – and they do it well. These are, by far, the projects with the highest potential in crypto. And I believe the coins in our portfolio have the best chance at achieving this ambitious goal.
By focusing on a single industry, many utility tokens both limit the scope of their projects and add additional challenges.
Portfolio Notes
Nano
Our portfolio has rebounded nicely over the last few weeks. Particularly nano. In mid-August, it dropped all the way down to $0.85. Today it trades around $2.26. It has pulled back from recent highs. But this is a fine purchase price if you haven’t bought in yet or are averaging into your position.
Nano’s core team has proven its resilience during the downturn and has been churning out major updates and improvements. It just released “vote by hash,” a new feature that should significantly reduce the amount of bandwidth consumed by running a node.
Nano has kicked marketing and PR into high gear and is firing on all cylinders. The nano website looks great, and there’s been a ton of engagement on Twitter and Reddit lately. The team recently released a YouTube video explaining the basics of nano and why many of us believe it could be the future of money.
As I said a few weeks back, this downturn will kill some coins and make others stronger. Nano, along with the rest of our portfolio, can weather this storm.
Decred
Decred is very close to launching Politeia, a new governance tool that will allow decred owners to vote on which community proposals deserve funding. There are currently 550,000 decred coins in the treasury, worth about $20 million today. These coins will be paid to developers who submit proposals for upgrades, improvements, etc. The community will vote on the projects it believes are most deserving. And the process will be conducted transparently through this new system.
Decred’s network hash rate (computing power) hit an all-time high last week at 100,000 thash (or terahashes) per second. This means more people are getting involved, mining and staking decred for rewards.
Decred remains one of the premier projects in crypto. I think it’s a fantastic buy at these levels.
Vertcoin
Despite getting hammered during this downturn, vertcoin’s community is going strong. The big news with vertcoin is the recent launch of Vertbase, a new exchange where users will be able to buy and sell vertcoin using U.S. dollars.
This is an incredible feat for a small team to pull off. The regulatory challenges for opening an exchange that accepts fiat money are daunting. But Vertbase is now open for business. For now, Vertbase is activating users from its waitlist. It should open registration to everyone soon. You can read more about Vertbase here.
That’s it for this week. I’ll provide an update on our other positions next week.
Good investing,
Adam Sharp