Fundamentals Matter

Crypto has been on quite a tear these past 12 months. The emotions are running high and it’s raining Lambos across the Twitterverse. The conversation around Crypto, if you can call it that, is buy, Buy, BUY!

 

But eventually the euphoria wears off and only the winners are left standing. The winners have the best fundamentals. The winners have utility. The winners stand a chance at sustainable growth.

Think about this, if everyone is blindly swinging from one Shitcoin to another when is a better time to get positioned into fundamentals than before the music stops? Or do you think TikTok Investors raising millions overnight for a token called “ScamCoin” is a sustainable trend? If you’re waiting for that trend to finish I’m afraid you’ve waited too long.

Some of you may have been around for the Dotcom boom. Maybe you read The Fly’s book Journey Into Fear. I was there in 1999/2000 making a full paycheck nearly every trading day trading tickers that no longer exist because they flamed out like supernovas in the spectacular market crash, and I rode them down.

I traded my way to 1,000% gains over 2 years then gave 70% of it back in 5 days. I created a spreadsheet showing I’d be worth $10M within a couple years if I kept winning at my current pace. Now, I laugh at my hubris. How many of you have your own version of that spreadsheet now?

Everyone makes money in bull markets. Very few keep it when the tides turn.

Is Crypto at a top? I don’t know, but it sure looks like it. The signs are everywhere. This may be more than a “local top” or a retrace. This may be the blow off top that redefines the sector. This could separate the wheat from the chaff.

The time to prepare for the storm is when the clouds are forming, not after the ship is being tossed in huge swells and high winds.

With a new asset class like Crypto it can be confusing what constitutes fundamentals. I’ll offer a few thoughts from my experience.

1. Does the coin have a legal foundation? This will eliminate anonymous coins and most ICOs. Eventually coins that violate the law will be shut down.
2. Do the Economics make sense? Are the incentives designed correctly?
3. Can this coin scale efficiently? The coins with the best fundamentals can scale and keep fees low.
4. Is the development roadmap stable? Will a transaction today be a valid transaction 10, 20 and 50 years from now on the same network?

I could add to this list but take those four points and screen it against any coins you have or are considering holding. Do this with a cold blooded honesty detached from any past profits or previous assumptions.

This may take some work and effort but if I’m right it will save you a lot of profits and possibly provide you with rich returns in the future.

I’ve met old shitcoiners and I’ve met rich shitcoiners but I haven’t met any old and rich shitcoiners.