Chris Curl,
Editor
Jan. 24, 2022
Table of Contents
- Altcoins
- Metaverse
- DeFi
- dApps
- Stablecoins
- Crypto ETFs
Altcoins
Altcoins encompass all other cryptocurrencies besides bitcoin. They are different but share many features. For example, some use a different method to produce blocks and others implement new capabilities like smart contracts.
Currently, there are over 10,000 different types of cryptocurrencies (altcoins). These types of coins made up nearly 60% of the total cryptocurrency market as of November 2021. All cryptocurrencies were derived from Bitcoin and tend to move in the same direction as it does.
But analysts say that as these cryptocurrencies mature, and new markets open up for them, their prices will be able to move independently from Bitcoin's trading signals. We’re not there yet but I see a day in the not-too-distant future where this becomes a reality.
There are many types of altcoins, including:
- mining-based cryptocurrencies;
- stablecoins (cryptocurrencies with an underlying asset to reduce volatility);
- security tokens (functioning like shares or stocks); and
- utility tokens (used for future functionality).
Ethereum (ETH) and Binance Coin (BNB) were the largest altcoins by market capitalization as of January 2022.
Metaverse
Put simply, the Metaverse is a blanket term used to describe several trends. Virtual reality (VR) is a big one. Augmented reality compliments VR but integrates the real world into it. And these virtual worlds do not have to be accessed by one medium. Many people assume that to utilize the metaverse they will have to strap on big VR goggles. But the truth is that these worlds will be accessible on many devices including PCs, game consoles, and even phones.
With this virtual world there also exists a digital economy. And this functions much like the real-world economy does — with users able to create, buy, and sell goods of various kinds.
Interoperability is another feature that many developers want to incorporate into the metaverse. This would allow users to move their virtual items – such as clothes and cars – from one platform to another.
With the ability to purchase virtual plots of land, users can purchase digital items – usually in the form of an NFT – and place them in their spaces. For instance, if I purchase a house in the metaverse, I can then equip it with items just as I would in the real world. If I have a tokenized Ferrari NFT sitting in my virtual driveway, I can theoretically sell that item in the open marketplace just as I would a car in the real world.
Gambling is an increasingly large part of the Metaverse. Decentral Games was launched in unison with Decentraland and acts as a DAO (decentralized autonomous organism). Powered by the DG token, Decentral Games is a play-to-earn casino among other things. Users can play poker, blackjack, roulette, backgammon, and slots.
All of this is to say that the metaverse isn’t going anywhere. Some aspects may prove to be fads, but the underlying infrastructure is here to stay. Investing in the right projects early on can be extremely profitable. But as always, with any nascent asset, the risk is high. But with that comes high reward.
NFTs (tokenizing everything)
Ethereum and an ever-growing list of new blockchains have unique tokens. They are also called non-fungible tokens (NFTs).
These are special because each one is completely unique. They have been used for collectibles, digital art, sports memorabilia, virtual real estate, and in-game items.
The first NFT project was Etheria, which was deployed to the network in October 2015. This was demonstrated live at DEVCON1 in November of that year.
Ethereum's non-fungible tokens (NFTs) are used for many things, but art sets are extremely popular. Virtual real estate is another use for these unique assets that can be used in video games to purchase land or buildings while also being an investment opportunity if held long enough. These assets can easily increase by 10x or more according to a recent Forbes Magazine, list which counts down how many millions each artist has made so far.
In 2021, Christie's sold a digital image with an NFT by Beeple for $69.3 million, making him the third-most valuable artist of all time according to Forbes Magazine.
The potential use-cases for NFTs are almost endless. I can envision a future where a myriad of things are tokenized on the blockchain. This would allow the creators of everything from songs to funny meme GIFs to generate income on their content perpetually. Companies that can take advantage of that trend will have a license to print money in my opinion.
DeFi
Decentralized finance (DeFi) is a blockchain-based form of finance that does not rely on central financial intermediaries such as brokerages, exchanges, or banks to offer traditional financial instruments. Instead, it uses smart contracts for any trade between two parties. This includes borrowing or lending funds while speculating about price movements across all asset types including.
By removing many barriers that traditional banking systems create between people who want access to these services but don't have enough money, DApps open the door to a massive group of disenfranchised people.
The use-cases for DeFi continue to grow. And there are a few projects that one should pay close attention to.
dApps
Decentralized applications, or DApps for short, are becoming increasingly popular.
These decentralized, finance-focused, blockchain-based programs allow individuals to transact without having any middlemen involved in the process.
dApps are digital applications running on a blockchain network rather than a single computer or server.
One huge advantage of dApps is privacy. By using smart contracts, transactions occurring between two parties are completely anonymous. No central authority is required.
Ethereum is the original dApp platform and still by far the largest but many new blockchains are springing up that compete with Ethereum both in cost and speed. Some of the top dApp projects are:
PancakeSwap (BSC)
Built on the popular Binance Smart Chain, PancakeSwap is the most used dApp in the world. Much of its popularity as a decentralized exchange (DEX) is because it’s a very cost-effective alternative to Uniswap — which runs on Ethereum.
Uniswap (ETH)
Uniswap is the top decentralized exchange on the Ethereum blockchain. Uniswap is huge, containing over 300 apps in its ecosystem. And it continues to grow. Once Ethereum fixes its scalability issues, growth on Uniswap will likely explode even more. Its native token is UNI.
Raydium (SOLANA)
Raydium is a decentralized exchange that runs on the Solana blockchain. I have long been a fan of Solana because of its speed, cost, and ease of use. Much like already established decentralized exchanges such as Uniswap or PancakeSwap, Raydium allows users to exchange cryptocurrencies quickly and inexpensively. Its native token is RAY.
Bomb Crypto (BSC)
Bomb Crypto is the most popular dApp on the Binance Smart Chain. It’s a Play-to-Earn NFT game that allows users to explore the Metaverse while building characters and fighting monsters for rewards. The native token of the game is called BCOIN and it’s used to purchase a character which is required to play the game.
Trader Joe (Avalanche)
By far the most popular dApp on the Avalanche blockchain, Trader Joe has over 373,000 active monthly users at the time of writing this. It’s a fully functioning decentralized exchange and provides services such as lending, farming, and staking. Its native token is JOE.
Stablecoins
Cryptocurrencies have been marked by volatility since their release. Stablecoins aim to reduce this overall risk by pegging their value with a reserve that is meant as insurance for those who hold it, such as fiat currencies or precious metals.
Stablecoin prices are forbidden from fluctuating more than a narrow range so you can feel safer investing your money in these coins without worrying about the wild fluctuations in the cryptocurrency market. Investors often cash out crypto gains and hold them in stablecoins to avoid any tax repercussions that would result from fiat currency withdrawals.
Top stablecoins include: Tether (USDT), USD Coin (USDC), Binance USD (BUSD) and MakerDAO (DAI).
Crypto ETFs
On October 19, 2021, the ProShares Bitcoin Strategy ETF (NYSE: BITO) was launched. There was a lot of excitement in the cryptocurrency community and the price of Bitcoin reflected that, quickly shooting up to a new all-time-high of $69,000 in the following weeks.
It’s important to note, however, that this ETF does not invest directly in Bitcoin but rather in futures – those contracts with the shortest time to maturity.
As of yet, there is no spot traded Bitcoin ETF in the U.S. as regulatory hurdles have not been overcome. Still, BITO was a milestone for the crypto and ETF community.
Naturally, after BITO’s approval, many similar ETFs launched shortly thereafter. Some notable ones are listed below. Keep in mind that these are all futures ETFs similar to BITO.
- Valkyrie Bitcoin Strategy ETF (NASDAQ: BTF)
- VanEck Bitcoin Strategy ETF (NYSE: XBTF)
- Global X Blockchain & Bitcoin Strategy ETF (NASDAQ: BITS)
There are also some broader crypto ETFs that have been around for a while for investors who want a more general exposure to the space by owning shares of various companies that have crypto or “meta” exposure.
- Amplify Transformational Data Sharing ETF (NYSE: BLOK)
- Bitwise 10 Crypto Index Fund (NASDAQ: BITW)
- Siren Nasdaq NexGen Economy ETF (NASDAQ: BLCN)
While we won’t be buying these ETFs in Crypto Cycle, we will most certainly be buying altcoins, NFTs, and using stablecoins for transfers. I’ll be showing members how to do all that and more in the bi-weekly issues.
The first one comes out February 2nd.
We’ll be taking orders by the end of this week, so click here now to learn how to be notified when Crypto Cycle is available for purchase.
Keep coming back,
Chris Curl
Editor, Daily Profit Cycle
Publisher’s Note: As promised, Crypto Cycle will be available by the end of this month. Our accounts are set up and funded. We’re ready to deploy $50,000 under the guidance of Chris Curl to trade cryptos, NFTs, and other assets related to the metaverse. Crypto Cycle will give you a transparent look at what we’re buying and when. It will also show you how to do it — from creating wallets to navigating various exchanges — while keeping you informed of ongoing developments on everything from DeFi to dApps. Make sure you’re on the waitlist to be notified when it’s live.
—Nick Hodge