The best cryptocurrency investments for 2018
Latest posts by Dean (see all)
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- Bitcoin price fundamentals: bullish divergences may be pointing towards price increase - September 8, 2018
Continuing what has become something of a tradition for me, this is my third annual post about the best cryptocurrency investments for the year ahead. Overall I’ve had great success with my picks so far. Of course there have been some losers, but there have been some really great 10 baggers and other nice profits along the way. If you are interested, you can take a look at my articles from 2016 and 2017 before checking out my top picks for 2018, but be aware that some coins have changed their names (such as ‘Antshares’, my best performer from last year which is now known as ‘NEO’). Similarly, this year I’ve found tracking both token success and failure a bit easier because sites like coinist.io have popped up which slice and dice crypto data in many different ways, helping investors more easily identify early stage coins. Their data shows the good the bad and the ugly of the token sale world. By analyzing the data you can spot trends in terms of what to avoid, as well as what to look for in a newly minted token. They have many charts but I recommend you start with their token ROI since ICO index. I think you’ll enjoy it.
As I have done in previous posts, I will offer my own personal analysis of which coins and tokens will be the most profitable for medium to long-term ‘buy and hold’ investors over the course of the next year or so. This will include major coins in the top ten list for market capitalization and also some smaller ones you may not be so familiar with.
I’ve listed them in order of their current market capitalization, rather than according to which ones are the best investment.
Bitcoin has had a really great year and I am glad I recommended sticking with the original cryptocurrency in last year’s post. This year the big run up we’ve seen in price makes Bitcoin inherently riskier as an investment, because the possibility of a substantial pull back is never far away. But with increasing volume and more regulation-compliant market participants, there is also a good chance that 2018 could be the year that big money – institutional level investors – start entering Bitcoin and driving its price up further. What’s more, the continued development of layer two solutions such as Lightning Network and Rootstock and / or a new wave of merchant adoption seem likely, in my view, to bring some great headlines and good publicity. I don’t usually set price targets, but at the risk of breaking what was a good rule: I’m expecting BTC to break the psychologically significant 10k USD level for the first time before the end of Q1 and to continue performing well beyond that.
After a giant pump based largely around the false hope that Ether could overtake BTC as the number one cryptocurrency, ETH has fallen back a lot against Bitcoin and has also lost around a quarter of its USD value from the high point. With Ethereum’s market cap edging down towards 20% of Bitcoin’s, and with panic over the impact of potential regulation of ICO’s starting to look overblown, this seems like a good buy again to me.
The number of transactions on the Ethereum network is already significantly higher than those using the Bitcoin blockchain. As projects already using the platform continue to mature, and upcoming developments such as private Z-Snarks transactions open up the possibility of more new decentralized applications, this is likely to increase much further.
Of course the number of transactions has a different relevance for Ether compared to Bitcoin because Bitcoin is more of a store of value and Ether more of a utility coin. But with a back stop of significant real world usage I do think that while Ether may struggle to outperform a bullish Bitcoin, it carries less risk right now compared to its older brother. I expect lower volatility in ETH compared to BTC but with a rising price measured in fiat terms.
Aragon ran a very successful ICO, which at the time was the 4th largest crowdfunding event in history, and the second largest in the blockchain space with only ‘The DAO’ raising more than Aragon’s $25 million.
Essentially, it is a platform for creating decentralized organizations. In some ways, it is a more polished successor to what ‘The DAO’ could have been: an unstoppable, borderless organization owned and controlled by the people and capable of giving birth to other such organizations. I can see a lot of projects within the blockchain space using this technology, and potentially some outside of it as well.
After strong trading in the first month after launch ANT tokens have been steadily declining in both BTC and USD terms. Despite this, there has actually been some considerable technical progress in developing the product itself, which is looking very promising indeed. I get the feeling that this project has flown under the radar, receiving little publicity or attention, and that this progress has therefore not been fully price in to its current value.
Moving further down the market cap rankings, I see Stox (STX) as one of those projects which may go nowhere, but which could generate outlandish returns if successful.
Stox is a prediction market platform. The concept behind it is very similar to other projects like Augur and Gnosis, although there are significant technical differences between all three implementations of the idea. But when you look at the market capitalizations, there is a stark difference. At the time of writing Augur is valued at $185 million while the circulating supply of Gnosis’ GNO tokens, representing a little over 11% of total supply, is valued at $67 million. Stox has a valuation of just $18 million for its available supply which represents 50% of the total maximum supply.
While Augur and Gnosis have been around for longer neither has reached a particularly advanced stage and Stox has made sound progress so far, so it is hard for me to see how this could justify such a profound difference. Their plans seem technically sound, and they have a large and competent team.
What is more, Stox seem to have the most feasible path to mainstream adoption as the company behind the project own Invest.com, an online investment house with over 3 million registered users, 8 million annual transactions, and an annual transaction volume of $12 billion. They will introduce the prediction market platform to their users for crowdsourcing forecasts and market speculation. They will also leverage the marketing experience within their 200 strong team to help Stox reach a mainstream audience. They are the only prediction market with such a clear and believable plan to reach a large enough userbase to gain traction and develop liquidity across a broad range of markets.
Because of this I would not be surprised if Stox turned out to be the ‘ten bagger’ (10x returns) from this year’s list. Obviously they may also fail to produce a viable product or shelve the project if it takes away from rather than adding to their current business, but it looks like a risk worth taking to me.
Blocktix is an event ticketing platform built on Ethereum. It’s purpose is to combat scalping while substantially reducing costs and increasing access for small promoters.
There are two reasons why I like Blocktix. Firstly, with a market cap of ~$7 million on nearly two-thirds of the total supply and a very large target market it looks cheap – this one certainly isn’t priced for success right now. Secondly, this is another project with a clear and credible plan to reach mainstream users outside of the cryptocurrency community; that is something which many projects lack and which I think is incredibly important.
Blocktix will use funds from their ICO to put on a series of events whose sole purpose is to introduce as many new users to the platform as possible. They will do this within a clearly defined niche and geographic area, in order to gain the necessary momentum to push forward and attract other promoters to use their platform.
Other Cryptocurrency Investments to Watch
- Dash may launch their Evolution upgrade, which I expected this year, in 2018. A successful launch could drive a substantial price rise.
- SingularDTV has a long list of releases, including rights management and media distribution modules plus plenty of artists using their platform, across late 2017 and early 2018. They aren’t priced too cheaply, but there is still plenty of upside potential if it goes well.
- Maidsafecoin is losing the interest of many with their super long development timeline, but a full launch will send this skyward – whether it will happen before the end of 2018 is another matter though.
- Litecoin may well be strongly affected by continued development of the lightning network on Bitcoin; it is difficult to assess the potential impact right now but is well worth monitoring.