06 Aug 2019
Inspired by this similar experiment we decided to invest $1000 and create our very own crypto fund. But unlike the mentioned article, we won't invest in the current top 10 coins - instead, we will do our own selection of cryptocurrencies in order to see how well our "expert" opinion turned out to be a year from now.
Instead of 10 cryptocurrencies, we've decided to choose just 5 and put $200 in each of them. So, which five did we choose?
You can't go wrong with Bitcoin. The OG of crypto has clearly defined its role as digital gold. The first-mover advantage it has (along with the strongest network and ecosystem around it) can give us an assurance that Bitcoin is here to stay and it is determined to keep climbing up in terms of its value.
While Bitcoin holds the first spot among all crypto, others have to find their own niches where they can rule on their own. Ethereum's niche is being a smart contract platform and it reigns in that niche even though there have been many competitors entering during the past 2 years. Our bet is that Ethereum will still be the smart contract king a year from now (and even longer).
You did not expect this one, right?
Well, we were looking into different value propositions that projects have (or claim to have) and Maker might have a pretty useful case as a decentralized application (dApp). Its probably most well-known part is Dai, a decentralized stable coin which can prove to be the savior for traders in case the Tether saga comes to a bitter end.
For the last two coins, we decided to go with the ones with significantly lower market cap, which would give us a bigger potential gain.
Beam is a new generation privacy coin that implements a privacy protocol called Mimble Wimble. There's also another cryptocurrency that does that, called Grin, but we decided to go with Beam because it's more advanced in terms of features and more user-friendly.
Nimiq is an interesting experiment that focuses on ease-of-use. Everything runs in a browser (wallet, mining, etc.) which means users don't have to manually install anything - everything gets automatically installed inside their browsers, in the background, when they choose to use, for example, a Nimiq wallet.
As said, the last two coins are moonshots - they have a significantly lower market cap which means there's more room to grow. But on the other hand, both projects are very young and it may happen that they don't receive the traction we are hoping for. We'll see a year from now!
We'll check how our experimental crypto fund performs every month and share the results via our blog - so stay tuned! :)