Looking to get into this now my latest property deal has closed. Aiming to allocate no more than 5% of my investment capital. That's be around $8,000.
With that kind of budget which cryptocurrency do you thinking would make the best investment?
Also
@AAAgent do you have any recommended resources for gaining and understanding of what is driving the fundamentals here?
FYI, any information I post here is not investment advice (I want to make this clear so you don't bet your house and lose it and blame it on me). I'm posting what I'm doing and my reasoning behind my decisions while also giving you guys some insight into the crypto space.
With that cleared up, Bitcoin and Ethereum are the two largest market cap crypto's Bitcoin is a universal currency that can potentially replace the USD (who knows if it will). It's built on the block chain which is an wide open bank statement that tracks all transactions (basically anyone anywhere and anytime has access to the blockchain to view any and all transactions. nothing is hidden or can be hidden). It's decentralized and unmanipulable by governments, banks, etc. (for the most part). There is a finite amount of bitcoins that will ever be in existence. 21 million. There is roughly 16 million in circulation and x amount of millions of bitcoins that have been lost on old hard drives, computers, or just simply lost. Each and every block of bitcoins that get's mined, the next batch becomes x times more difficult to mine. The last bitcoin to be mined is estimated to be over 100 years from now or something ridiculous.
Ethereum is a platform that the new internet 3.0 will supposedly be built on. Ethereum the crypto currency is the token all individuals and organization will need to use in order to do ANYTHING on the Ethereum platform. Corporations and even other crypto companies are using Ethereum to build new companies and even issuing their own crypto currencies. Golem is a platfor built on Ethereum. They needed to buy Ethereum in order to fund their platform Golem. Golem is a platform that allows users to sell their computing power to other Golem users and into the Golem platform. It also allows users to buy computing power for any projects that they would live to dabble in and need additional computing power. Golem itlsef pays in you Golem tokens.
Sia is another platform built on Ethereum. Just like Golem and every other company (banks, General Electric, etc.), they need to buy ethereum in order to fund their company/project being built on Ethereum. The Sia platform is a cloud storage company like Google, Amazon, Microsoft, etc. that allows users to sell their computer storage space on the Sia platform. As the Sia platform cloud draws from so many different users storage space, it's decentralized and no entity will ever be able to look into the files you store like Google, Amazon, etc. most likely does and probably sells to the government and other entities. Sia pays you in Sia tokens just like Golem.
Veritaseum is also built on Ethereum. That is why you see many crypto's traded against Ethereum.
VERI/ETH
GOL/ETH
SIA/ETH
There are hundred of other companies and tokens that are built on Ethereum. There are plenty of other platforms that are competing with Ethereum as well that have similar structures.
The fundamentals I believe that are pushing crypto up, are the block chain technology/decentralization and Ethereum on the tech side of innovation. The other side of the financial equation you have MASSIVE currency devaluations happening in all major developed countries. We're printing tons of money in China, Japan, Europe, South America, USA, Canada, etc. You also have 1% to negative interest rates in USA, Europe, and Japan for the last 10 years. Very little interest bearing yield for anyone trying to save money or invest in interest bearing assets (especially for the old people who live off of savings/interest). Most people did not recover from the last financial crisis so the low interest rates have little to no positive effect for them. The rich people are making a killing off these low interest rates because they can borrow for free. The hyper inflation isn't showing too well because it's being mixed with deflation (confusing I know).
Hyper inflation is the result of too much currency supply hitting the markets for x amount of goods. I explained how this is happening. Rich people/foreigners are buying everything.
Deflation is the result of lack of currency supply hitting the markets. The average person is struggling, working multiple part time jobs, hasn't gotten a raise in who knows when, or is unemployed. These people are doing little to no spending. So you have one side of the spectrum spending little to no money and trying to save what they can, and the other side spending like crazy and borrowing like there's no tomorrow, it creates pockets of deflation and inflation. Housing and stock markets are super inflated.
Here is a link from the Federal reserve of the Money velocity. Basically, the speed of which cash exchanges hands from one person to another. We're at record setting 40-50 year lows or money velocity. Money hasn't exchanged hands this slow since the early 1970's.
https://fred.stlouisfed.org/series/m1v
I'll end my rant here, but basically the technology is very innovative, is decentralized meaning no central entity or government has claim or control over crypto currencies, and many of them solve problems. As they can't outright destroy crypto currencies without shutting off the internet or massive regulation (which would not be good), many countries are starting to adopt crypto currencies/bitcoin as a method of payment.
I have not been sleeping well with these crazy movements in price in crypto. With all these new ICO's (initial coin offerings), many of them require you to pay for the new coins using ethereum. One ICO was so massive, it basically shut down the entire Ethereum network and caused massive delays in Ethereum transaction world wide. That's why you see coinbase along with many other exchanges issuing Ethereum delays/suspensions or trades.
