I traded about 2,000 Steem for Bitcoin when Steem was selling for $0.90 and a Bitcoin cost $9k. I patted myself on the back when Bitcoin soared to $19k a few days later, but if I would have waited until Steem hit $8, I would have doubled my profit. I knew Steem would go up eventually, but I had no idea it would happen this fast.
If I were going to beat myself up over my inability to see the future, I may as well hate myself for not buying Bitcoin when it was under $1. If you're going to buy and sell crypto, you have to keep your head up and focus on the future.
Bitcoin almost hit $20k because of media hype, and it dropped down to $13k when the same clickbait authors who had been saying, "There's gold in those hills, stupid!" decided they could get more clicks by saying, "There's no gold in those hills, stupid!" I'm assuming Steem is hot right now because Bitcoin's recent success brought new investors to the cryptogame, and it's fall in price motivated those people to buy other coins. The influx of speculative investments is lifting every ship right now.
In the long run, the most usable tokens will establish themselves as "bluechip" currencies. When the market finally decides which (and how many) cryptocurrencies the world really needs, the bottom will fall out of the altcoin market. I expect at least half my portfolio to be worthless in four years unless two things happen first:
Someone perfects a way for consumers to transfer any cryptocurrency to a vendor in a way that makes it irrelevant which cryptocurrency they're using.
Cryptocurrency exchanges make it much harder or impossible to add new cryptocurrencies (without evicting any existing altcoins).
If it doesn't matter which currency you're using, and there aren't new currencies coming out every week, then the existing altcoins could find solid ground regardless of their weaknesses.
However, there's a much higher chance that in the next two years, the invention of new wallet/payment technology will crown the 1-10 most usable currencies king and make the rest obsolete. If I'm right, and you're investing in cryptocurrency for the long run, then you'll proabably have the best chance of success by using one of the following three strategies:
Invest in the 10 most popular coins.
Invest in the tokens with the most advance "smart contract" technology.
Invest in the companies that invent the technologies that allow people to spend, accept, save, and loan cryptocurrences.
Personally, I don't feel it's best for me to plan for the longterm because I'm completely broke, and I have a low paying job that is killing me and wasting my life right now. I won't live to old age if I don't get out of my current situation as soon as possible.
I firmly believe every cryptocurrency has a few spikes left in them before the bubble bursts. If I can just catch one of those, I'll be able to quit my job and buy a small plot of land with a tiny house. So instead of betting on the most stable currency, I'm betting that the crypto market will continue to be complete, unreasonable chaos for at least another year and a half. My goal is to bet on everything and sell the biggest short term winners.
I've only invested $500 in cryptocurrency. All the rest of my holdings come from selling the aforementioned 2,000 Steem for Bitcoin, which I held onto for a few months. Yesterday I traded most of that for 18 other currencies. I also have a little bit of Bitcoin Gold, which I got just for holding Bitcoin when it forked, and I still have 300 Steem Power.
If you include the value of my Steem Power, then my portfolio was worth about $7k when I diversified it yesterday. It rose to $8,900 this morning, but that was mostly due to Steem's price increase. You can view a live update of my holdings anytime on Cryptocompare.com. If, at the time of reading this post, you think I'm stupid, save the link and check it again next January to see how right you are.
I invested a little money in Etherium and Etherium Classic, and I'm holding onto some Bitcoin. I consider these my top-shelf, bluechip currencies. I think of them like stocks in "Microsoft" or "Amazon." They're most likely to survive the Shitcoinpocalypse and grow in value. This is my safety net.
My second-tier choices are Ripple and Monero. Their focus on commerce and banking mean they're smart, useful currencies competing with dumb, useless ones. If I had more money, I would probably buy more of these.
I think of Steem as being in a class of its own for several reasons. First, I didn't have to pay for any of it. I got it all from blogging on Steemit for about six months. So it's not an investment. It's just free money. To be honest, when I first started blogging on Steemit, I didn't have much faith in Steem as a cryptocurrency because it's not optimized for business, but earning $1k per month blogging made me think differently. As long as the Steemit blogging platform survives, the value of Steem will be backed by the popularity of Steemit. As long as Steemit is giving away free money, the platform will continue to exist and grow. As long as I keep blogging on Steemit, I'll still be growing a nest egg. If the price of Steem ever nose-dives, I'll grab as much as I can while it's down, and I'm definitely holding onto all my Steem until it reaches at least $20 this time.
All the rest of my picks are bottom-shelf, pink slip gambles that cost less than $1.25, most notably, Dogecoin! I took a huge bet on it because I've been watching its value grow slowly but steadily against the odds for as long as it has existed. In the wild west world of cryptocurrencies, familiarity is stability. Even if investors think Dogecoin is mathematically stupid, the cute, honest, innocent doggy face makes the average internet person happy. If the world can find a use for Dogecoin, it will, and when that happens, we'll all be wishing we had bet on the world's biggest underdog.
I don't like Dogecoin because it's a smart cryptocurrency. I like it because the world is stupid. If Donald Trump can become the president of the United States, anything can happen. I'm not saying I'm bullish on Dogecoin though. I'm fully prepared to watch all its value get eaten away by inflation. Dogecoin is also the only total joke currency I invested in. I stayed away from others like Rabbitcoin and any currency that doesn't have a functioning home page.
Steemit's success in the social media market inspired me to take a risk on cheaper coins geared towards social media such as Reddcoin and Guppy, which I have relatively high hopes for.
I reasoned that if Ripple and Monero succeed because they're designed to function as smart money in business transactions, then cheaper business-centric coins should do well for the same reasons. This is why I bought Stellar and Verge.
I picked several other coins because they have real world applications outside of banking. Saicoin is tied to providing cheap cloud storage. Maidsafe is tied to webhosting. Vtorrent is tied to torrenting, and Gridcoin is tied to sharing computer processing power. I'm not saying these are guaranteed winners, just that they have a purpose, which is more than some coins can boast. It may be enough reason to spike in the next two years.
Feathercoin was designed by geniuses at Oxford and claims to be highly upgradable and customizable, but to be honest, I don't really understand it. I mostly just bought it, along with Power Ledger, because of the low price. These are total gambles, but they're still better bets than my next three picks.
I chose Potcoin because it claims to have applications in the exploding marijuan industry. More importantly, potheads are likely to invest in it just because of the name. Funfair has applications in the gambling industry, which is where free money flocks to. And Pinkcoin is geared towards charity, which is also where free money flocks to. However, none of these coins really do anything that Bitcoin and Etherium don't already do better. That's why I didn't buy into them as heavily as Ripple, but the gambler in me couldn't resist their rock-bottom prices.
That's my fool's errand... or maybe it's genius. What do you think?