Baron
ET Founder
Correct.
Baron's Crypto Trading Journal
- Thread starter Baron
- Start date
Do you take into account market caps? With ETH at 537B and MATIC at 13B, it seems like the upside potential is huge for MATIC if we use your premise that both will do well going forward. No reason why ETH cannot go to 5T and hence do a 10x, but MATIC doing a 10x to 130B seems like an easier journey.
One of the reasons why I'm so bullish on crypto now is the asymmetry of the potential win. It took AAPL how many years to 10x? Likewise for all the other tech stocks like AMZN, FB, GOOG, etc. But in cryptoland, a 10x is just getting started and has happened for many even since just January (and 10x is on the low end actually).
I'm quite sad to miss the move just from January 2021, but I still feel that going forward, it will be much easier to grow an account on crypto rather than stocks. Of course the entire crypto space can lose 50% in days or weeks whereas with equities, that is unthinkable now (for an index fund of course, not individual stocks). But if the potential to gain 10x is there, while maybe sitting through a 50% drawdown, it seems like much better odds to be really heavy in crypto now vs. equities if you're looking to hit a home run and not just collecting dividends with some price appreciation.
The high-dividend portfolio has gotten really old now, and I am seriously thinking of bailing on it and re-assessing where to put the money.
Just throwing out easy numbers here, they are not where I am at, but you know something?
I'd rather earn 5 million bux and pay 2 million in taxes than earn 3 million bux and pay 500K in taxes. Something like that.
True but you need the consider the probability of which scaling solution is going to work. With optimistic rollups on the way and sharding eventually, one needs to consider is there a place for sidechains in the long run?
Put it another way, would you rather buy AAPL at 200B mkt cap or buy a small cap tech stock at 1B?
I agree with @Baron if you don't know buy both then readjust over time.
Baron
ET Founder
Sure, I look at market caps as a single data point but there are just so many other things to consider. The major one is if one of the up-and-coming smart contract platforms like Solana, Cardano, etc. actually ends up being a better solution than Ethereum (even with MATIC there to help).
The best example of this would be the Myspace debacle. As one of the first major social networks, it grew like crazy but then Facebook came along with a better system that addressed a lot of the problems that plagued Myspace, and by doing that it literally sucked the life energy right out of Myspace. That same scenario is a real possibility with these emerging crypto platforms.
Sure, Ethereum has the first-mover advantage but in the technology world, the advantage of getting out there first can actually become a disadvantage over time because it's so hard to re-engineer a complicated system running in real-time versus just building a new one from scratch like the newcomers can.
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The biggest thing holding me back on Bitcoin isn't the price...it's the unknown with regulation. I really would like to have 5% or so in it, but I just can't see govts not regulating this. One reason I was attracted to DOT, it looks more like infrastructure for blockchain than another digital coin. I appreciate your comments and insight.
What do you think of the upcoming Ethereum 2.0 POS upgrade compared to other blockchains?
Baron
ET Founder
Regulation has been already set for Bitcoin since 2014, so that shouldn't be your concern. In fact, it's the one crypto that we know has been already examined.
The government has already ruled that Bitcoin is not a real currency because it's not legal tender, and it's not a security because it's "sufficiently decentralized" (meaning there's no company, board of directors, officers or even a company headquarters). It has been defined as "property" by the IRS since 2014, which means that tax is due on the gain when a sale or transfer of the asset occurs.
However, the gazillion alt coins including the stable coins are really the ones that carry all the regulatory risk, as many of them may be deemed securities, banks, exchanges, etc. at a later time.
That's one of the primary reasons why you see me buying Bitcoin almost exclusively in this journal. There are other opportunities out there with many other cryptos but the regulatory risk with many of those is a major concern of mine.
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Baron
ET Founder
Like I said, upgrading an existing complicated system is a lot harder than starting one from scratch like Solana or Cardano. My average price in ETH is $1,868 in my other accounts so there's plenty of wiggle room to get out with a profit if it looks like the 2.0 upgrade is either too slow, too buggy, etc.
Where do you suggest people go to keep up with these projects/blockchains news and updates? (other than elitetrader of course lol)
Is there like a legit crypto project board you go to personally or maybe a screener?