Cryptocurrency Market Map Chart

And a 7-part thesis for investing in ICOs

I. Setting the Stage

There’s a new app out there that would have come in handy before we published our last analysis of the cryptocurrency space, an equation predicting the expected funding level of future ICOs.

The app, Coindexter, is from a former USV analyst and lists out all the currently live and upcoming ICOs organized by industry vertical. We pulled the list as of July 24, 2017 into excel and ran a bit of analysis on it. The findings are below.

Note: get in touch if you’re looking for help in the crypto space, whether getting the word out, creating branded content, or doing fundamental analysis.

II. The Market Map

The chart below is ranked by the number of ICOs, both live and upcoming, within each industry vertical.

Data source: Coindexter as of July 24, 2017

A few observations immediately jump off the page:

  1. As expected, Financial Services and Currency are the two largest industries with the most activity due to the space cryptocurrency is playing in.
  2. Also as expected, Health, Medical, and Insurance has no activity. That’s because most of the people building these coins/startups/organizations come from a technical and engineering background with few understanding the depth of the space. It’s also likely due to the heavy regulation. But if you assume medical records and insurance premiums have a place for bulletproof databases, then we fully expect this to play out.
  3. Curiously, the biggest component of dealing with anyone’s money or investment, is unrepresented entirely. What about Security? You know, the whole reason you trust a bank to protect your money. On a personal note, I’ve had money stolen from Coinbase through an attack so this is not some pie in the sky ideal. It’s real. It’s painful. And that means ripe for a big startup. But crickets??
  4. There are 178 total organizations tracked, with 40 currently live (22%), 19 in preproduction (11%) and 119 still in concept phase (67%). That tells us that two-thirds of the ICOs being tracked have yet to launch, which means there’s a mountain of supply being built up. The question, of course, is how much demand there will be for these, but I’m guessing it’s going to be a lot.
  5. The names of these organizations need some real help (see spreadsheet/Coindexter). To a normal person interested in investing, they sound scary. For ICOs to jump the shark into the mass middle market (i.e., mutual fund of ICOs for your 401K investment every two weeks), it needs to feel safe and friendly. There’s a reason people invest in Apple and not cr@z&spelk!nG.io.

Here’s a link to the analysis spreadsheet should you wish to play with it.

III. Thesis for Investing in ICOs

I’ve come up with my own thesis for investing in cryptocurrency. Because The Base Code is about giving you the tools to manage your own financial future, we felt it was important to share that strategy publicly.

Lifetime (Holding Period: Never Sell)

  • Invest in the fundamental enabler: Ethereum
  • Invest in a technology that solves hacking problem: ???
  • Index for the entire space

Long-Term (Holding Period: Years)

  • Invest in fundamental enabler for creatives to launch their own projects: FundYourselfNow
  • Country-specific: China

Short-Term (Holding Period: Days to Months)

  • Human Belief: anything generating significant hype in the forums, news media, then exit trade after ICO launch

Intraday (Holding Period: Minutes to Hours)

  • Algorithmic: use PROME’s Biologic Intelligence general AI that self-learns the more variables and inputs you give it, optimizing the Gain/Loss over time.

Note: all of the above assumes a secure wallet technology is in place (i.e., another investment opportunity)

Sean Everett

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