The State of the Altcoins. Litecoin is sitting pretty.
If you haven't looked at coinmarketcap.com or coingecko.com lately, you might want to take a gander. When you scroll down to #8 you'll see Dogecoin, shift your eyes to the right and you'll see a nice 7 day pump. 91% in the green. Remember pumps? These kinds of pumps haven't happened for quite some time. Ever since the bear market was initiated in November 2021 they have been few and far between. Altcoins used to be how a lot of people amassed riches. Not lately, they've amassed REKTness. If you hope and think the bear will turn into a bull, keep reading.
This isn't financial advice.
Keep scrolling and you will find Litecoin at #20 (at the time of this article). You'll have to scroll past some altcoins and stable coins on the way. I mean, some of these things are laughable. It's unfortunate because Litecoin is such a good coin. I don't even consider it an alt-coin. Why? It has many similarities and shares many of the same properties as Bitcoin. Proof of work, limited amount, security, etc. If you define altcoins as anything other than Bitcoin, sure Litecoin is an altcoin. But Litecoin is more similar to Bitcoin than let's say, Chainlink. To group Litecoin with Chainlink over Bitcoin would be a categorical error. Anyways, Many of these altcoins are shitcoins. There are a lot in the top 100, even the top 20. Many times, shitcoins are a solution in search of a problem. Or simply a pump and dump from its genesis block. And even if some of these altcoins do find the problem they are in search for, the coin's "solution" may not even work.
To pick on one coin, I'll pick on Chainlink. I mean an oracle? An oracle to solve a problem of a blockchain not having verifiable data. This isn't the matrix. I'm not even sure if chainlink knows what problem they are solving. Sports betting? blockchain voting? the how-to guide for perfecting a pump and dump? But again, I could be wrong, I'm no genius. Chainlink could be the coin that sets humanity free or something like that. Just understand that with all of these altcoins, the dump can be more painful than the pump. It's easy to make big promises and talk about the future when things are going well. Not exactly as easy in this bear market. No one wants to listen to the next fancy code update when the coin is getting absolutely REKT. Do many people care what Luna is working on these days? It's sort of like gambling. Everyone wants to tell you when they had a big win at the casino, but nobody really highlights that time they went to a casino, lost a grand, and got smacked in the face in Vegas.
This isn't to say that all of these altcoins are shitcoins, some of them seem to be real projects aiming to solve a problem. Unlike many Bitcoin maximalists, I personally don't think anything beyond Bitcoin is a shitcoin. An altcoin is the more appropriate term. Additionally, unlike many maximalists, I am actually not calling for hyper-regulation of the space to call all of these altcoins, securities. Maybe they are securities, I don't know. But I am personally not looking forward to the SEC or the CFTC to over-regulate the space and stomp-out any and all projects looking to solve and create use cases.
If you haven't checked out this fantastic debate between Erik Voorhees and Sam Bankman-Fried; you really should. VIDEO. A number of these altcoins are trying to solve the holy grail of problems. Decentralized finance. The separation of money and state. Bitcoin and Litecoin separate money and state, but these altcoins are going about it a different way with smart contracts. A massive undertaking that I don't want any regulating body to get in the way of. Am I looking for the SEC to possibly regulate some of the obvious scam coins? Sure. But if a mistake is to be made, I'd rather the SEC have little to no involvement rather than a sweeping heavy hand. Decentralized Finance is such an undertaking, I don't really want all these coins to be immediately labeled as a Shitcoin. Sure, most of them are going to fail, but when did failure become anti-free-market? Failure is part of the process. Coins should be allowed to succeed and fail. These are experiments, people should be free to experiment. Imagine a world where experimentation was stomped out immediately. Ew, gross.
Doesn't really matter for Litecoin and Bitcoin, they aren't securities, and a number of high-ranking officials have been on record for saying so. Securities. Basically, if the coin does not have an on/off switch, had a fair launch, or is proof-of-work, it is probably not a security. Bitcoin/Litecoin/Bitcoin cash and a healthy number of other currencies fit this model. Some other coins like utility tokens clearly do not fit this model. Ethereum has always been a topic of debate in this area as well. Do I want all these coins to be regulated out of existence like the SEC may want them to be? Not really. That would be like saying McDonald's can't offer reward points on their app for using its service. Would the SEC not allow McDonald's from creating a rewards utility token? Boy that would be interesting to watch. I don't think they have the right to completely regulate them out of the space. And perhaps that is not their aim, but it could be especially if they have "interests" to protect. Bitcoiners are really gonna have to consider if they really want regulatory bodies to sabotage their competitors. Can't they just beat other coins on the blockchain? Only seems fair.
Now to the coins that suck. The shitcoins. I'm not really going to single out certain coins here because I would have to do extensive research to truly dismiss the project. But let's be honest, most of the coins listed on coinmarketcap.com are shitcoins. Here are some buzzwords that might tip you off: interoperable, blockchain, Defi, oracle, web 3, meme coins, and a lot of ERC-20 tokens. You have to wade through a lot of crap to find a hidden gem. One of those hidden gems is Litecoin. Many shitcoins operate on the Proof Of Stake mechanism. Why? I think they are easier to start up, are more centralized, and can reward the founders more handsomely. With honest proof of work cryptocurrencies, someone had to mine the transactions and its decentralization metrics are just stronger. Does that mean proof of stake is worthless? I don't think so, and time will tell if there is a real use case for them. I'm thinking things like utility tokens and tokens that businesses can use to help with their centralization abilities might have real use cases. Like that McDonald's utility token. How many exist right now on the market? perhaps some, perhaps none. I don't know. That's not up to me or the SEC to decide. The market can decide that.
These altcoins definitely aren't a sure thing. If in twenty years there are only be a couple of big players, that random alt-coin will probably go to zero, especially in bitcoin terms. So be careful. Bitcoin and Litecoin feel more like safer investments. Whatever bugs they had, have been squashed, and both protocols have been working (Litecoin has 100% uptime) nearly flawlessly for over a decade. They've pretty much proved they can work at least in the short term. Not all altcoins have proved they have a use case. Has Ethereum? I think so. I'm still not a big believer because of all the problems with nodes, gas fees, practical use cases, changing of consensus mechanisms, changing rule sets (creating and burning Eth tokens), etc. However, ETH did popularize stablecoins, which has to hold some weight even with those pesky maximalists. So to sum it all up, Bitcoin/Litecoin is a gamble (we can't predict the future), and altcoins are an even bigger gamble. Feeling lucky?
It will be very interesting how this next cycle will play out. Will the Altcoins have another heyday or has their time come and gone? Will Dentacoin revolutionize the dentistry industry? LOL, no. You see, now that's a shitcoin. Will the Bitcoin dominance chart rise, or will alts continue to lay claim to more market share? OR will only a FEW altcoins survive and take market share from Bitcoin? Like blue-chip stocks. Could we see a 2 headed race? Five? 50? I'd love for it to come down to BTC, ETH, LTC, DOGE, and Taco Bell coin. I think that would be healthier than a 200-coin race. But again, it's not up to me, regulating bodies, or Elon Musk to decide. That's the market doing market things.
PAT'S FINAL TAKE:
Be careful not to get REKT by a shitcoin. Do your research. If it smells like a shitcoin, it probably is. Don't fall in love with a coin that had an incredible run but lacks in fundamentals. There are coins like RUNE that seem to have a real use-case but are so technical that I stay away from them simply because I don't know how to analyze them. It's okay if things are too technical, you don't have to invest in them. That's why getting educated in the space is important. Finding trustworthy people is important. Here are some coins that had great runs only to be obliterated later: Internet Computer Protocol, EOS, Luna, Ravencoin, Compound, CEL, VGX, Safemoon, Yearn Finance, OMG, LISK, STEEM, VERGE, and the list goes on and on. I should mention NFT's. NFT's are art, and i'll be honest, I stay away from art because I ask my children to make bubble letters for me. On the whole, I don't think NFT's can be completely considered a scam or a shitcoin. There is a there, there.
Litecoin has held up strong amongst all the altcoins that had a pump and dump. Litecoin has not fallen off the map and continues to update its protocol. Not many altcoins have the staying power that Litecoin has. That's why I am still extremely excited about Litecoin's future. It's getting better, stronger, and the community is only growing. Things are looking up for Litecoin. All the metrics are trending the right way. More wallets, transactions, use cases, and the volume looks healthy.
Crypto makes winners, but if you picked any of those previously mentioned coins after Bitcoin made all-time highs, chances are; you got REKT. Don't get REKT, get educated. In the traditional investing space, diversity is good. It spreads out risk. Crypto is different, Diversity may not be good. Diversity can get your portfolio destroyed. I personally think its better to do as much research as you can, have conviction with certain coins, and only invest what you can afford to lose. I have a lot of conviction with Bitcoin and Litecoin. Good fundamentals, tons of talent, and a macro economy that may need to lean on these coins, soon. Very soon.
Cryptocurrency doesn't have some sort of destiny. This isn't destined to work, but I hope it does, but the future is very much still up in the air. Again, this isn't the Matrix. The future is; fluid, and it will be up to the market, entrepreneurs, coders, and project teams to determine which coins become important in the crypto ecosphere. And as you know, I have huge conviction in Litecoin and Bitcoin, I hope they continue to succeed.