What is going on with Cryptocurrency?
Cryptocurrency has been on a heavy surge early on in 2021 and has made numerous headlines with new record highs across the board. Dogecoin, Bitcoin, Ethereum, Cardano, Shiba Inu, NFTs, Elongate, and Internet Computer Price have captured the audience of the public and people have gotten serious about investing in Cryptocurrency. Even more than we have seen back in 2017. Every waking day something changes with future prospects of which crypto will be the one to pick and it usually has something to do with rich billionaires. With these new and exciting all time highs there’s value in learning about the currencies first and foremost. Here’s what I have seen so far in these wild two months. Through my experience and research here is what I learned.
Early April I was watching a video about cryptocurrency when I discovered BlockFi. Never buying cryto before, I decided to put in money I already budgeted to be invested. I bought Bitcoin, Ethereum, Litecoin, Chainlink, and held some GUSD while earning anywhere from 5–8.6% APY on all holdings which was the bonus that got me interested. Over 1 month later here’s the results: While Bitcoin has slumped, Ethereum has nearly doubled giving me a 50% return. Chainlink has taken off while Litecoin had little growth all while earning about 6% APY. We all remember last week. The entire stock market was down on Monday but crypto was absolutely surging. Everything in my portfolio was down (including this week on Monday and Tuesday) except for cryptocurrency.
Even before getting into buying crypto I have been watching Elon Musk tweet about Dogecoin in February. I wanted to buy Dogecoin on WeBull but it wasn’t available at the time. Mid April the day and the hour it became available it was surging from 7 cents up to 34 cents. I got in around 30 cents and got a 100% return in about a week or two. The coin continued to go on a tear to 74 cents before SNL with Elon Musk hosting. From April 12th until May 7th, Dogecoin went up 10x. To put that into perspective one of the best funds that track the S&P 500 might average 10% returns annually on your investment before inflation. In percentage, Dogecoin’s increase in just over 3 weeks is over 880% return. However, crypto remains very very volatile and could potentially dip a majority of its value just by a major holder selling coins.
Watching Saturday Night Live with Elon Musk hosting felt like a shareholders meeting for Dogecoin… And the earnings reports were in and they were below expected. Dogecoin began to fall with brokerage difficulties and how Dogecoin was talked about on SNL. The problem with Dogecoin is there are 11 people who have a minimum of a billion dogecoin per account totaling 58.7 billion dogecoin. The remaining 3.8 million people with less than a billion dogecoin per account own 70.7 billion dogecoin. Someone sold massively at the peak of 75 cents with a large holding. The problem now is leverage. So few people hold 45% of the coin’s currency making them a large part of the price’s worth. On the flipside, Elon Musk announced Doge-1 will be a Space-X rocket heading to the moon paid for to SpaceX by you guessed it… Dogecoin. Elon then did a survey on twitter asking if people would want Tesla to accept Dogecoin as a form of payment. 78% of the 3.9 million people said yes. The next day Bitcoin was stopped as a payment method for Tesla and Bitcoin fell below $50,000 with Musk looking for a more energy efficient currency. Dogecoin isn’t guaranteed to succeed but the optics and the traction are setting it up for promising results if the stars align.
The next day Elon broke the internet again. While looking for a crypto that uses less than 1% of Bitcoin’s energy hinted at two main cryptocurrencies. Cardano and Ripple’s XRP. Both are extremely energy efficient, fast, cheap in transfer fees and cheap in price currently, and likely the next upgraded phase of crypto as we know it. While Ripple is banned from trading XRP since January, Cardano jumped 30% above 2 dollars for the very first time. Later that day, Elon tweeted he’s working with Doge developers to improve system transaction efficiencies. With the removal of Bitcoin from Tesla and his search for a new energy efficient low cost coins Dogecoin is in a nice place to take the show. Dogecoin has been slipping recently. When Elon tweeted that, the price jumped over 10%. Every day feels like there will be some new exciting news that we didn’t expect that will have major impacts on the crypto space.
Takeaways about the Crypto bull run:
This is not what we saw in December of 2017: The 2017/2018 peak numbers for Bitcoin and Ethereum seem so miniscule compared to this time around. These coins have real world uses now. Before today, you could pay for a Tesla in Bitcoin. This seems to just be the beginning of these coins. Some of the wealthy are growing their wealth with cryptocurrency. I also don’t expect this run will last forever. The currency should fall back to Earth sometime and its growth will slow like Bitcoin has overall.
Ethereum is legit. The rest of them might be not so much: After very detailed research of Ethereum, Ethereum might be better off than Bitcoin. In the last month it has been showing that. The past two weeks the price of Ethereum increased by $1,000 and it continues to grow more and more. The thing behind Ethereum is think of Ethereum like the base for some of these cryptocurrencies to use transactions. The currencies are just made up coins anyone can create or use. The currencies couldn’t work without Ethereum (or using one of its competitors). With the insane amount of energy crypto uses, Ethereum 2 is on the horizon. There’s been waitlists to transition your coins from Ethereum into Ethereum 2 (staking coins) and to earn interest in the meantime. The catch is while Ethereum 2 isn’t available yet, you can’t sell your coins. Ethereum 2 is expected around 2023–2024 and will require less energy and be more efficient with heightened speeds and cheaper costs. This is one of the currencies I am excited about and one I liked that I invested early in. Ethereum has something solid behind it. Cardano uses a different platform and is far behind Ethereum but could be the winner long term. Dogecoin really needs something solid for it to both stick around in value and stabilize its value.
Most cryptos are very volatile and only money you are willing to lose should be invested. A.K.A. don’t put your life savings in on it: I know people that have doubled down on cryptocurrency. This year emotions has been brought into investing in crypto which is a recipe for disaster if not kept under control. The fear is people continue to buy dips and lose more money or take too much risk which puts themselves in uncomfortable positions. Yes if you put money in Ethereum a month ago you doubled your money. But it could have easily gone down and we don’t really know. We just know Ethereum is rising to new all time highs weekly, more people are buying in and the expected price keeps going up. Eventually the market will correct itself and determine the true value of Ethereum. Please do your research and consider the risks. This isn’t financial advice nor am I a financial advisor; this is meant to educate only and to share what I have learned. I know people who are all in and I don’t want them to get burned either. This is why I still own real estate, stocks, bonds, mutual funds, etf’s that grow and pay dividends, and have a side hustle. This is a opportunity to potentially get some solid gains and diversify with some riskier investments that have huge upside. Only invest what you’re willing to lose. This feels like going to the casino for me which isn’t really possible right now. Either way Dogecoin to the Moon and back!
