Here we can see a few altcoins pitted against Bitcoin, to see how the fiat value of each evolved throughout the year. Investors look at these metrics often, and in this case, it tells us about the relative strength and liquidity, of all these instruments, and potential risks when being invested.
ETH started very volatile, but while it was in a positive trend, it was acting well, with a low volatility trend, despite the explosive price movement. During its consolidation it shed a lot of its value, but it's showing signs of risks being behind it, with constructive price action after bottoming recently. Volatility quieted down, both in Bitcoin, and in some altcoins lately, so I'm interested in being invested in this market in particular.
XMR and DASH show some promise, but both tend to cater to people wanting to obfuscate their transactions, and thus, might see some kind of risk if the IRS, FBI, or some government is interested it going after the people using it to transact with them. This creates a negative stigma associated with them, although Darkcoin's developer wanted to distance himself, and rebrand the coin lately, I think it's just an excuse to bring it to the limelight again and get more people to buy his creation (he has a gigantic premine, so it's in his best interest). I'm not sure if he's sold all of it yet, but I recall that the masternodes had made these individual a lot of money back in the day.
XCP: Too volatile and illiquid to be safe. Some people might be able to trade this, but I'd rather not. Just a good example of how an illiquid market looks. LTC: People still ask me about it, look how it fared, this coin just had a name because it came out some time ago. It fared pretty badly, over a year, and it'll continue to underperform Bitcoin, stay far away.
Conclusion: Do your due diligence, as far as charts go, I can read the activity in them if there's sufficient liquidity, if the market is too thin, it's simply not worth it to trade at the mercy of exchanges and manipulators. Also, look at correlation and performance relative to Bitcoin here. Treat it as 'the market', and altcoins as bonds, or smaller companies. ETH is not correlated, and many times anti correlated, so it is a good addition to a crypto portfolio. It doesn't derive its fiat valuation merely from BTC, but underperforming, like the other alts. It derives its value from its particular characteristics. This makes it interesting as well.
Cheers,
Ivan Labrie.
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ETH and DASH are doing great, XCP is quite strong, but still not liquid enough.
Hi Ivan, Thanks for the post. Great evaluation with some very good points made. What are your thoughts on ETC at the moment. It's showing a very similar set up to ETH ( new weekly high, range expansion) and looks like a bottom. Obviously it's much more volatile and illiquid than ETH but could it be worth attributing a very small portion of the portfolio? Could it be considered as a hedge to ETH? as they are competing chains of the same technology?
IvanLabrie
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@b.Gates, hi. Yes, you could allocate 1/10 of the eth position in it. I'm not in it but it would make some sense like you assess.
All the best, Ivan.
Manos007
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@IvanLabrie, I'm sorry, i forgot to wish you a happy new year. All the best to you. :) Thank you for all your great posts.
IvanLabrie
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@b.Gates, oh, likewise! Thanks for your kind words, all the best.