I get asked by so many people about which coins or tokens they should invest in. However, something that I very rarely get asked is which coins / tokens they should avoid…
That’s because knowing how to spot a shitcoin can be just as helpful as knowing how to find that next hidden gem. It’s a known fact that the ratio of poor quality cryptocurrencies to hidden gems is about 9:1.
In other words, if you randomly selected a cryptocurrency to invest in, you have a greater chance that it will turn out worthless in the long run.
So, in my video today, I take you through a comprehensive checklist that you can use when doing your due diligence. If a cryptocurrency that you are considering investing in meets at least three of these characteristics then you may want to steer clear.
I also highly encourage you to share this video with any of your friends who are just jumping in those crypto markets – it could save them from getting rekt in the long run.
You can watch that video here.
📊 Portfolio Update 📊
No changes to the portfolio this week guys. I think that we still have a bit of near-term uncertainty in the coming weeks (see next section). I am really interested in some GameFi plays but some appear to be a bit overvalued.
In my NFT portfolio, I have picked up an additional two Mutant Apes. As I mentioned in my newsletter last week, I am particularly excited about the BAYC community and what they are working on. That being said, the NFT space is becoming quite saturated (see NFT NGMI section below).
My updated portfolio is:
ETH 29.31% | BTC 22.53% | SOL 13.15% | DOT 11.39% | RUNE 3.29% | HNT 3.26% | UST 3.24% | ATOM 2.69% | PAXG 2.54% | ADA 2.16% | INJ 1.98% | FTM 1.38% | AR 1.27% | LINK 0.93% | MATIC 0.87%
📈 Thoughts on Market 📈
It’s been a predictable end of the month as far as crypto prices go. On Friday we saw another big options expiry which dragged down the market the same way last week’s option’s expiry did. There is another macro factor that’s weighing on the crypto markets, however.
It looks like Jerome Powell is going to get another term as chair of the Federal Reserve, and that might be bad news for Bitcoin. That’s because Jerome has said that the Federal Reserve will increase interest rates as soon as there is “full employment” to combat high inflation.
As it so happens, last month the United States saw a substantial increase in employment, and some are saying that this could be what the Federal Reserve needs to accelerate its tapering plans. This probably depends on what the jobs numbers look like this month.
In any case, BTC is seen as an inflation hedge by many institutional investors who might start to take profits if they believe that Jerome can tame the out of control inflation we’re seeing (which I personally doubt).
What’s fascinating though is that this rotation out of BTC can be seen on the Bitcoin dominance chart. Normally, when BTC drops, dominance rises. This is because crypto investors see BTC as a “safe place” to park gains during crypto market downturns.
Over the last couple of weeks however, dominance has continued to decline along with price, and most of that money seems to be flowing into ETH, whose market dominance is on the rise. A lot of this money also seems to be pouring into Metaverse cryptocurrencies like MANA and SAND.
These two cryptocurrencies have been rallying against all odds, but they finally seem to be running out of steam. It should go without saying that you should always zoom out and look at the bigger picture.
Some investors like Grayscale see even more gains for these crypto on the horizon, and I’ll be talking about their metaverse report in an upcoming video.
🇹🇷 Crypto Adoption In Turkey 🇹🇷
The Turkish Lira lost 15% of its value last week, reaching a record low against the US dollar. This is because the Turkish central bank reduced interest rates on the orders of the president. Their rationale is that a cheap Lira means Turkey will see more exports and investment.
This is the same rationale used by central banks in many other countries. The problem is that this kind of monetary policy does serious damage to the purchasing power of the average person, and this is why Turkish citizens have been buying BTC.
Turks have also been using cryptocurrencies to pay for goods and services, or at least they were before the Turkish central bank banned crypto payments earlier this year. It’s safe to say that the government doesn’t want competition from another currency.
So, what happens next in this tragic comedy? Well, if you’ve been keeping up with all of my CBDC videos, you’ll know that Turkey is one of the countries that has been developing a central bank digital currency or CBDC, and it looks like development officially began in September.
CBDCs seem to be the only way out for governments around the world, because giving the central bank total control over the money supply makes it possible to both create and destroy currency. Right now they can only create currency, hence all of the inflation we’re seeing.
The reason why Turkey is so significant here is because it could foreshadow what’s coming. Inflation causes people to run to crypto. The government bans crypto as payments or bans them completely. Then, they release their CBDC. Turkey is in the second stage of this process.
This is quite terrifying, but the good news is that CBDCs are nowhere close to being ready or secure enough for deployment. Everyone who knows how to build digital currencies is working in crypto, and crypto technology is growing faster than CBDC technology as a result.
In theory, this means cryptocurrency will come out on top, but we will just have to wait and see. I’ll keep you posted, as always.
🤦🏻♂️ NFT NGMI 🤦🏻♂️
I have been doing NFT coverage quite a bit on the channel and have explained exactly why I think they can be so valuable. I have also told you about some of the NFT purchases I have made including some from the Mutant Ape collection I disclosed in my newsletter last week.
However, I was also around during the 2017 ICO boom and to me currently, it seems as if there are a lot of parallels between then and now. The NFT space has become way too saturated with some really low value collections.
Worse yet, there is considerably less work required to launch an NFT collection than there was to issue a token in an ICO. For many of these, the team does not need to produce a whitepaper or have any sort of investment pitch. All they have to have is a “limited” collection of randomly generated jpegs which sell out for millions.
To give you an idea of how little is nowadays required to make millions from an NFT collection, you can look at this TikTok video that I came across. Essentially, hire someone to develop a site and smart contract, hype the collection, launch a sale and bag the profit.
Moreover, NFTs are a completely different beast from a fungible ERC20 token. They are a lot less liquid and that therefore means that it may be difficult to exit your positions on them.
There are countless other collections that I am seeing being shilled that are bound to be worthless – some that have even paid for star power promotions.
One thing that you should know about the 2017 ICO boom is that over 95% of those projects that raised funding and sold tokens ended up being worthless. Either they exit-scammed, or they just cashed out and gave up, or they were hit by the SEC. But there were many bag holders that were left with nothing to show for it.
I seriously hope that we are not going through the same period now with NFTs. You can still be bullish on the potential of these tokens without throwing your money at random unknown and overhyped new mints.
To go back to the analogy of the 2017 bull market, there were plenty of ICOs that turned out to be amazing investments. Polkadot’s, Filecoin’s, Decentraland’s etc. But for every one of these there were 10 or more money grab raises.
Indeed, I recall many of my friends who wished they had just kept hold of their ETH or BTC instead of investing in ICOs back then. I can’t help but wonder whether the hype around new launches is driving people off the beaten path into dark alleys of dodgy NFTs.
If you are seriously considering making an investment in NFTs, then be sure that you are doing solid due diligence on the collection. If you don’t know where to start on your NFT DD, then my recent video on it could indeed help you.
And, if the NFTs that you are looking at buying are too expensive, then keep them on a watchlist. Like the crypto markets, it ebbs and flows. Don’t FOMO into an NFT for fear of missing out on the next Bored Ape or Cryptopunk.
If you are bullish on the NFT ecosystem then you could also consider utility tokens for those projects that are building the infrastructure for it. Utility fungible tokens are a lot more liquid and allow you to easily exit your investment should you ever want to cut losses or take profits. Examples of these include the likes of RARI, MANA, AXS, SAND etc. etc. Even if they may be overhyped, they are incredibly liquid.
So, please just bear all of this in mind before you folks ape into some random collection on sale. Some NFTs are priceless, others are nothing more than worthless jpegs.
🔥 Deals of The Week 🔥
🔒 Keep That Crypto Safe: I know it can be tempting to bumble onto that crypto exchange, buy that crypto and just let it sit there. However, we know that nothing really beats the benefits of self custodying that crypto.
And when it comes to self custody solutions, if you want to get the best security money can buy and treat your crypto like the million dollars it could one day be, then you’ll want to get yourself a hardware wallet. I’ve spoken all about the top hardware wallets on the market in my video here!
So, how do I store my crypto? Well, I use a Trezor hardware wallet. This device stores over 1,000 cryptos – so I imagine most of you will literally be able to store every crypto you hold on it.
👉 Serious about keeping that crypto Safe? Get a Trezor!
🎄 Christmas Is Coming: Now, I don’t know about you, but I love Christmas and spreading some festive cheer. However, with all this Covid stuff popping off again around the world, it seems that the old postage service is going to be impacted again.
With that in mind, it might not be a bad idea to load up on that Xmas swag in advance – that way no one is going to be disappointed. In my store I’ve actually got the perfect gift or two for that crypto fanatic, so you might want to order those presents whilst you can! Here are a few crypto gift suggestions for you to check out:
- Ho Ho HODL T-shirt
- ETH Word Game Black Sweater
- CoinBureau Beanie
- ADA Moon T-shirt
- Keep Calm & Hodl Hoodie
Also, if you get anything from the store, you’ll be supporting the channel and helping me and my team to keep producing that content that you love.
🔮 Video Pipeline 🔮
- Complete 101 Guide to Swing Trading
- Bullish on Bitcoin? Buy These Stocks!
- Solana Update: Is it still red hot?
- Grayscale metaverse report: Here’s what you need to know!
- What I wish I knew before I got into crypto…
- Complete 101 guide to the Metaverse
- Top 5 Crypto Podcasts
🏆 What’s New At CoinBureau.com This Week? 🏆
✅ Blockchain Domains: Complete Guide from DNS to ENS
✅ GameFi NFTs Far More Than “just” Art: What to Buy?
That’s about all I have for this newsletter. However, I do need to thank you on behalf of all my team for your support. We are well rested after our Christmas party in Dubai (images on my instagram).
The next event we will be organising is one for all of you guys which I hope to be holding sometime next year. I will of course keep you all updated.