There’s a lot of focus right now on short-term speculation in the cryptocurrency space. But at some undefined future point, a reversal from speculation to value is going to happen. And when it does, you’ll want to be in the right positions.
Investing exclusively in tokens with real world value creation is the philosophy that my crypto hedge fund, General Crypto, is predicated on. Unless you’re a skilled day trader and don’t mind incredible stress levels, it’s wise to buy-and-hold coins with game-changing value rather than just jumping to and from the flavor of the week.
Analyzing the validity of that value isn’t easy. So I thought it would be interesting to hear what some very smart people who dedicate themselves full-time to crypto are betting on in the long-term.
Here are each of their top three picks that they intend to hold (and not decrease position size) for at least the next two years, and why they believe in them so much.
Food for thought: there is estimated to be around 100 crypto hedge funds currently spinning up in Q3 and Q4 2017. 100! Our fund was featured on Forbes as one of 15. This means a massive on-ramp of institutional capital — the likes of which crypto has never seen before — is about to be opened. And smart money is going to pick the smart cryptos. Here is what myself and nine others think they are going to back.
Logan Kugler, Managing Partner at General Crypto
I’ll start with my three favorite.
RIPPLE (XRP) — Ripple is going after SWIFT, and their token XRP could entirely change the way we send money internationally. Why? Currently money takes days to move internationally, and the fees are enormous. There’s literally no way today to send money from one country to another same-day, other than by boarding a plane with a suitcase full of cash. XRP can transfer value (read: money) anywhere in the world in four seconds, at a cost of pennies. And unlike other coins, it doesn’t get bogged down when hit by huge volume.
Why am I bullish? The market size is as big as it gets (SWIFT moves $5 trillion USD per day), the technology is already built (Ripple has been working on it since 2012), their team is world-class, and nearly 100 banking partnerships are already in place with pilots running or about to start. The CEO of SBI Holdings believes XRP will become the global standard in digital currencies.
Bitcoin maximalists like saying that XRP is not a true crypto because it’s not decentralized. The reality is Ripple is working towards making XRP even more decentralized than Bitcoin. It could take a while, but they’re already off to a good start.
What some people miss about XRP is the timeline. Ripple stands to revolutionize the entire banking industry. That’s not going to happen overnight. It will have its rallies and its steep corrections, but I expect it to consistently go up. Don’t buy this one expecting big things to happen as fast as other coins. (And don’t get cold feet when it drops half.) The key difference is that XRP is predicated on an extremely strong use case, team, and technology. Be willing to buy now and hold this token for minimally the next five years and I think you’ll see an incredible return on investment. If you want a simple way to think about Ripple: XRP is going to let us move money across borders in the same way that we move information across them today. And that’s an astronomical upside.
Here’s a long article I wrote about XRP if you’re interested in knowing more.
Price when this published: $0.266
FACTOM (FCT) — Factom offers the promise of immutable records. This could be huge for the (trillion-dollar) mortgage industry, banks and audit records, retail with huge databases like Target, studios with enormous catalogs of movies like Warner Bros., and governments for historical documents. Factom’s competitors are currently bounded by only proving the positive (e.g. “can we show X has existed in the chain?”), which would pertain to proof of existence, integrity, ownership, etc. — which is limited for the overall problem they are trying to solve. Factom can prove both the positive and the negative and see if a piece of information didn’t exist at a certain period in time, or whether it’s the latest version. Factom could change how major record keepers keep records and ensure eternal existence of all records.
Price when this published: $25.61
MONERO (XMR) — One of the original promises of Bitcoin was anonymity. It turns out it’s not quite as anonymous as a lot of people initially think. While who owns a particular wallet address is unknown, the transactions can be easily followed. So if your identity gets associated with a wallet address, some analysis can essentially turn your transactions into public bank statements. Enter anonymous coins (or “anon coins”), of which XMR is leading the field in privacy. It scrambles your address automatically each time, so you don’t have to worry about leaving a trail. I can see XMR becoming very popular among those seeking anonymous transactions. What’s still up in the air is whether or not it can scale. Within hours of writing, XMR experienced a 50% price surge, which saw vastly extended transaction times.
Price when this published: $83.59
Spencer Bogart, Managing Director and Head of Research at Blockchain Capital
BITCOIN (BTC) — Bitcoin has proven its ability to efficiently serve a few use cases that represent giant market opportunities. Amazon first proved it could efficiently sell things online and it focused on this ability before growing into other opportunities. I think the same will be true of Bitcoin.
Price when this published: $4,180
MONERO (XMR) — If I were forced to pick one thing that I was most concerned about for Bitcoin, it would be a lack of privacy. Each Bitcoin should be worth as much as any other Bitcoin, regardless of who owned it before you or what they did with it. For now, this isn’t a big problem. But Monero is a good hedge against this risk, since it’s more private than Bitcoin and therefore doesn’t have the same degree of fungibility risk.
LITECOIN (LTC) — Silver to Bitcoin’s gold. The code is so similar to Bitcoin that Litecoin is able to leverage Bitcoin’s developer network and improvements. This is a big advantage over other coins that try to build a developer community from the ground up. If anything catastrophic happened to Bitcoin, a decent portion of the capital would likely flow to Litecoin.
Price when this published: $51.63
Rafe Furst, Chief Investment Officer at The Crypto Company
DASH (DASH) — Bitcoin’s reign as the gateway cryptocurrency is coming to an end. The question is, what will replace it? Arguments can be made for Litecoin, Zcash, Ripple, or Monero. I like Dash because of its focus on consumer-friendliness and its flexible, decentralized governance protocol. For example, it took just 24 hours for the Dash community to approve a proposed blocksize increase back in 2016, while the Bitcoin community took three years to address its scalability problems, and the debate ended in a hard fork.
Price when this published: $296.56
ETHEREUM (ETH) — While Ethereum won’t replace the function of Bitcoin, it will continue to play the important role it currently does as a smart-contract engine, and as a master blockchain to spawn new application tokens.
Price when this published: $324.99
STEEM (STEEM) — Imagine if your social media posts could earn you money based on how popular they were. Imagine if you could get paid as tastemaker and curator of content published by others. Now what if the content creators kept 100% of the ownership rights to their content, and there were no advertisers or special interests getting between creators and fans? Steem is the first utility token that is truly being used for this function. Platforms like Reddit, Medium, and even Facebook should be nervous.
Price when this published: $1.25
Brad Mills, Fund Strategist at Alphabit
BITCOIN (BTC) — I’ve been holding Bitcoin since 2011 when I started mining in my basement, and I will keep holding until it’s at least $100,000 per coin, which I expect in three to five years. Fundamentally strong, this is the original blockchain that is and was designed to be money.
I get excited when I see Bitcoin becoming legal tender in countries like Japan, South Korea, and India. It’s only a matter of time before a Bitcoin ETF is approved, and we see sovereign wealth and endowment funds allocating money into Bitcoin as a new asset class.
METAL (MTL) — Metal is one of Alphabit’s core positions that we will be holding long-term. Currently, it sits at only a $190 million market cap, which we think could grow to $1 billion or greater over the next year. Metal has the dual-use case of being not only a crypto-rewards token and peer-to-peer payments app like Venmo, but also an FDIC-insured fiat on-ramp bank in your pocket for the average person to make it easy to use cryptocurrency. For a competitor in market cap, I look at Dash which is currently at $2.3 billion, and also focusing on mass user adoption.
Price when this published: $8.78
WAVES (WAVES) — Waves is Russia’s largest blockchain project. At it’s core, it’s a decentralized exchange and user-created token fundraising platform, forked from the NXT codebase. An ICO was held in 2016 that raised $16 million, which has grown to a market cap of over $300 million.
This month, a partnership was announced between Gazprombank and Waves. The partnership focuses on holding ICOs for Russian mining and metals companies, bringing a lot of legitimacy to the platform.
Price when this published: $4.64
CryptoYoda, well-respected cryptocurrency trader on Twitter
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LITECOIN (LTC) — It’s the second oldest and most trusted blockchain to date, and in addition to being about four times faster than Bitcoin, it has successfully managed to activate Segwit well before any blocksize debate, which to me is a sign of positive adaptability. For being a fork of Bitcoin with only minor differences in algorithm, trading at about 1.5% of Bitcoin’s value is utterly insane, given it’s a more convenient payment coin. Bitcoin will primarily be a store-of-value, just as silver versus gold.
ETHEREUM CLASSIC (ETC) — The reason ETC’s price is so low compared to Ethereum (ETH) is the confusion about what happened during the hardfork a year ago. In July 2016, the community decided to hard fork the Ethereum blockchain in order to restore lost funds of DAO investors by rolling back the blockchain to a point in time before the hack.
There was huge resistance in the Ethereum community because of their devotion to the immutability of blockchains. Part of the community decided to violate that “law” to bail out those affected by the DAO hack, creating ETH. ETC is currently trading at 14.3% of ETH’s value, which is a severe undervaluation in my eyes, given it’s loyalty towards the core principle of cryptocurrency.
Price when this published: $15.51
ZCASH (ZEC) — There are many undervalued coins offering anonymity to users, with Zcash and Monero being the most prominent. I think Zcash is positioned to be one of the biggest winners. It has huge interest, is elaborately designed, and has a high-security creation process and very limited supply. Its lack of recent price advancement indicates to me that traders are accumulating it.
Price when this published: $231.04
Romano, well-respected cryptocurrency trader on Twitter; also the lead developer of Viacoin (VIA)
STRATIS (STRAT) — Stratis makes blockchain easy for enterprise. They offer simple and affordable end-to-end solutions for development, testing and deployment of native C# blockchain applications. Ever see an article that talks about a bank starting to use blockchain technology? They don’t use the Bitcoin blockchain, but a private chain like Stratis. Stratis makes it easier than ever before for organizations to deploy private blockchains. They’re in talks with many huge companies like Microsoft, Jaguar, Reuters, Cashaa, AIA Group, RBC Capital Markets, Deutsche Bank, etc.
Price when this published: $6.09
DECRED (DCR) — Decred will soon get the Lightening Network. Which means you can send small transactions for almost no fee, instantly. The Lightening Network is a big thing which many underestimate. Notable about Decred is that they’ve learned and implemented a lot from the success of Dash. But whereas Dash has a lot of outside funding (and is accountable to investors), Decred is self-funded via block subsidy (accountable only to its users) and they are entirely transparent about the allocations. Decred has decentralized voting, Charlie Lee (Litecoin’s lead developer) on their team, and their code looks clean and is beautifully written.
Price when this published: $29.97
ZCOIN (XZC) — While a lot of other anonymous coins bill themselves as completely anonymous, they are not, as this video explains. This is also a great article explaining why most anon coins aren’t actually completely anonymous. Only ZCoin is completely anonymous and I think at some point the market will recognize that and it will be in the same league market cap wise as Monero. Right now, ZCoin looks very undervalued to me as their market cap is only $26 million (compared to Monero’s $1.2 billion). Also worth noting: Roger Ver has said good things about ZCoin (and I don’t like Roger Ver at all, but he has very deep pockets).
Price when this published: $9.55
CryptoVisionary, founder of the Phoenix Trading Group
RIPPLE (XRP) — Distributed Ledger Technology (DLT), the technology that powers Ripple and its associated coin XRP, allows anyone anywhere in the world to transact money in the same way as sending data (at fractions of the cost). For markets such as international remittance, this means monumental change is underway. ($500 billion is transacted yearly in the remittance sector.) Many of the largest banks in the world (more than 100) have plans to leverage DLT and Ripple to cut costs for their payment servicing. In fact, even the Federal Reserve and the Central Bank of England are testing out Ripple for real-time payment capabilities.
AUGUR (REP) — Businesses around the world pay a high premium for actionable intelligence for their own internal and strategic needs. With Augur, anyone in the world can obtain information on the probability of a future event. Think of it as the Google search for future events, peering into the future using a fascinating principle known as wisdom of the crowd. Such a technology could drastically impact many industries, including trillion-dollar or larger industries like gambling and sports betting.
Price when this published: $22.59
QTUM (QTUM) — Think of Qtum like an Ethereum for China, except that it’s a Proof of Stake coin. It’s a more environmentally friendly way to secure the network, with a drastic reduction in the consumption of electricity compared to Proof of Work systems like Bitcoin. Like Ethereum, Qtum will host a number of applications developed by independent third parties, has an all-star cast in terms of advisors (one of their co-founders was recently cited in Forbes China’s “30 Under 30” list.)
Price when this published: $13.49
notsofast, well-respected cryptocurrency trader on Twitter
BLOCKNET (BLOCK) — Of all projects competing to release a decentralized, native cryptocurrency exchange, Blocknet’s technology is far and away the strongest, easiest to implement, and closest to market.
Blocknet removes the third-party risk in sending your coins to trade on an exchange. You can collateralize 5,000 blocknet in a service node, run any wallets you want on the same machine as that node, and earn BLOCK in trade fees whenever someone trades a currency your node supports. The blocknet protocol will fundamentally advance the use of blockchains the way IE or Netscape standardized and unlocked the World Wide Web.
Price when this published: $14.12
UBIQ (UBQ) — The DAO philosophical failure and Ethereum network split opened the door to competitors on smart contract blockchains. Ubiq is the strongest: immutable unlike ETH, and with a brand focus away from experimentation and toward corporate professionalism. Once the Ethereum ICO craze breaks and that platform loses trust, Ubiq’s secure network and failure-free track record will present it as a viable smart contract competitor.
Price when this published: $1.55
PARKBYTE (PKB) (Soon to be ParkChain; PKC) — Parkbyte is my appcoin bet. It’s a simple premise to disrupt a ubiquitous and unsexy industry with better tracking, standardized UX, and lower costs and efficiency throughout. Via industry experience, the developers acutely understands exactly what needs to be pitched to whom in order to disrupt existing pay-to-park systems with a blockchain implementation.
Price when this published: $0.278
Squeeze, well-respected cryptocurrency trader on Twitter
CIVIC (CVC) — Civic is a secure identity platform that uses the Civic tokens for identification purposes. Vinny Lingham is the CEO of Civic and he’s one of the “Sharks” on Shark Tank South Africa. Civic has both the concept and the team. With Vinny’s connections and influence, many sites have already integrated Civic. For this type of identity verification, user adoption is very important. Without adoption, there’s no use case.
Price when this published: $0.546
TEZOS (TEZ) — By far, the biggest ICO funding, with $230 million. It has huge names backing it like billionaire Tim Draper. Their algorithm runs on a delegated proof of stake system. It is also capable of anonymous transactions which utilizes the Zcash’s proof circuit on a side token. They have plans to replace this process with a better option in the future. It is also possible to create applications on Tezos similar to Ethereum. I have no doubt that it will hit a multibillion market cap in a year.
Price when this published: (not publicly traded yet)
LISK (LSK) — This is one of the underdogs that a lot of people missed. It’s currently at $233 million market cap. Lisk (similar to Tezos) is utilizing the Delegated Proof of Stake system, where “delegates” verify the transactions and have voting capabilities that steer the direction of Lisk.
The main development plan this year is to create an SDK for developing and deploying blockchain applications (smart contracts). They have a strong development team and they have sufficient funds ($62 million) to keep it going for tens of years.
Price when this published: $3.42
sicarious, well-respected cryptocurrency trader on Twitter
DECRED (DCR) — Decred is perhaps the most innovative Proof of Stake coin on the market today, and boasts an impressive (and production ready) decentralized governance system. In addition to governance solutions, Decred is preparing to throw their hat into the ring of anonymous transactions later this year. The Bitcoin scaling debate and increasing government scrutiny of the cryptocurrency ecosystem emphasize the importance of both governance and anonymity, setting the stage for Decred’s growth through the end of 2017 and 2018.
UBIQ (UBQ) — Ubiq has an upgraded codebase, newly-designed difficulty algorithm, monetary policy, and several million-dollar projects running as tokens on its chain. Additionally, it was launched in a spirit of fairness with zero ICO or developer premine. Currently valued at less than 0.5% of ETH’s market cap, Ubiq provides a top-tier alternative to ETH at a dramatically cheaper rate.
BASIC ATTENTION TOKEN (BAT) — The free and open internet as we know it runs on advertisements, and yet adblockers are seeing increasing adoption among internet users. BAT seeks to solve this problem by creating a mutually beneficial common ground between advertisers and users, centered around their internet browser, Brave.
