The cryptocurrency market has been in the news for lots of reasons. I’m an investor in Crypto currency, and an Ethereum miner. In this episode, I break down some of my top current picks for Crypto investors (and those thinking about it). I also provide some guidance on safe percentages to invest.
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Table of Contents
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Crypto to Own NOW
Looking at the downloads on my show, it appears that you guys love the crypto info and the crypto episode. I’m going to hit you with three cryptos to buy in 2022. Before we dive into what specific crypto you want to buy, we’re going to dive into the five stages of any technological innovation. We call this the Gartner Hype Cycle, which teaches us that new technologies go through five phases. I want to explain where we’re at in terms of this hype cycle. I saw this happen back in 2000. I was right in the middle of phase two. I experienced this firsthand with tech stocks back in 2000. I’m very familiar with these hype cycles.
The Gardener’s Hype Cycle
First off, number one is called the Technology Trigger. What happens is a new breakthrough in technology emerges, which was the blockchain idea that came out from Satoshi Nakamoto or however you say his name. I don’t really know the pseudonym. Nobody has been able to figure out who created Bitcoin. It’s almost over a $1 trillion asset and nobody knows to this day. Even though they’ve tried hard to figure it out, they still don’t know who it is. This is where new companies are born. Early venture capital investors pour money into these new companies and a small wave of early adopters start using these new technologies.
Stage two is the Peak of Inflated Expectations. This is where mass media coverage begins. Tons of new companies emerge hoping to capitalize on the trend. Everyone starts hyping up the tech as the next big thing. More and more mainstream folks start using the technology. Stage three is called the Trough of Disillusionment. This is not a good place to be. First-generation products based on the tech start to disappoint and new companies start to fail. The media talks about those failures, the hype train fades, and new venture capital money comes into the space as sky-high expectations start to come down. Venture capital starts to see this as an opportunity for buy-in.Those investors who pick smart will make millions. Click To Tweet
Stage four is the Slope of Enlightenment. The mainstream media forgets about the new technology, but the companies that remain work to fine-tune it and develop second and third-level generation products that have much clear value propositions and use cases. Number five is the Plateau of Productivity. The technology starts to be used by the masses, and the companies in the space enter a prolonged period of durable and sustainable growth.
I believe cryptos are somewhere in the Peak of Inflated Expectations phase as big-name cryptos begin to fail and the mainstream media begins writing about these failures. Over the subsequent months to even years, we will enter the Trough of Disillusionment. This is where thousands of cryptos will fail and several hundred billion dollars of value will be wiped out. Don’t get fearful because this is a huge opportunity. Think about if you would have just stayed the course with companies like Amazon, Facebook and Google. There’s a long list. Investors need to be smart here, however, and those who pick smart will make millions.
After that Trough of Disillusionment comes the Slope of Entitlement followed swiftly by the Plateau of Productivity. The big money is made in these phases. It is during these phases that the wheat is separated from the chaff, and true visionaries and innovators in the new technology emerged. What you’re going to find is that cryptos are going to certainly follow this same path. You could certainly buy Bitcoin at this price, but there’s a much bigger opportunity at hand.
While you can do well on Bitcoin, I recommend that you have a percentage of your investible dollars in Bitcoin. You’re going to be able to do much better in several of its much smaller cousins in the crypto sector. There are these little small projects that could store more than 31 times the rise of Bitcoin. However, they’re riskier, but with the outsized gains comes outsized risk. If you’re poised to make 10,000 in Bitcoin, you can make 31 times that in some of these tinier projects.
Where To Invest?
The million-dollar question that we’re all asking is, what are the best cryptocurrencies to buy now that have enormous long-term upside potential? These are the cryptos that could help you reach incredible financial gains in a very short period of time. In one of my previous episodes, I talked about how and why crypto is so valuable. It’s because it’s an incredible software application. If we think about the software Excel, how many millions and millions of hours did that save human beings? Maybe 1 billion or 10 billion years. It saved us so much time by allowing us to automate calculations instead of doing those by hand. That’s the power of software programs and it has occurred across all industries.
That’s where we need to be looking at these cryptos. They’re just incredibly powerful software programs. They also serve to cut out the middlemen. Middlemen are often unnecessary profit-takers and further, they are sometimes subject to corruption like in the financial crisis of 2008. By removing and replacing them with an automated and incorruptible technology, which doesn’t need a paycheck, we can make our systems and processes more trustworthy, faster and cheaper.DeFi is where the most upside is going to take place because it is intended to disrupt the traditional powerhouse banks. It's incorruptible. Click To Tweet
Also, DeFi or Decentralized Finance is the future within the cryptocurrency sector. DeFi is where the most upside is going to take place because DeFi is intended to disrupt the traditional powerhouse banks and multi-hundred dollar billion companies like JPMorgan, Wells Fargo and Goldman Sachs. All of them have been named in lawsuits and corruption over the last decade. DeFi apps are incorruptible because it’s a program. It’s a software that is not controlled by any central party.
Three of these smaller projects to buy right now. One of them is not so small. At the risk of sounding repetitive, I want to keep drilling into you about how valuable Ethereum is going to be. This is the number one altcoin. If you aren’t familiar with altcoin, it means anything alternative to Bitcoin. I don’t know if I think of Ethereum as an altcoin at this point. It has gotten so big. It has so much usage. As of right now, it’s still an altcoin because it’s not Bitcoin. It’s the second largest coin by market cap, but it’s still just two-fist the market cap of Bitcoin.
For starters, it’s a different animal than Bitcoin. You can use Ethereum to send digital money just like you can with Bitcoin, but it’s used for more than just payments. It is a global open-source platform for decentralized applications. dApps, which they’re commonly referred to, are an incredible innovation that allows everyday people to participate in the app economy. Most cryptocurrency projects that are out there are built upon the Ethereum network, so the usage is incredible.
In fact, 95% of all dApps transacted in the volume in 2020 occurred on the Ethereum blockchain. It’s not only an incredible store of value but also incredible usage. I think that we’re going to see a $10,000 Ethereum price potentially by the end of this year. It’s almost a foregone conclusion that at some point in the next five years, we will see a $10,000 Ethereum. I don’t think that there’s any doubt about that. Buying it where it’s at right now, even though it was as high as almost $5,000. It hit $4,900 its peak. It’s currently trading at around $3,000. It’s not moving much. It’s bouncing back and forth in the low 3s. This is an incredible time to buy. You’re going to kick yourself if you don’t buy it at this price.
The number two coin is called Radicle. Have you ever heard of GitHub? Most folks probably have not. It is an online platform that software developers use to build, ship, store and edit their code. It’s basically like Google Docs for coders. It has become the gold standard for our programmers to store and share their codes. If you don’t understand any of that, don’t worry. I didn’t either. Not only that, it’s very valuable. Microsoft acquired GitHub for $7.5 billion in 2018 and it has performed well since that time. Now, this $15 billion giant in the software development world could be disrupted by a tiny $80 million crypto called Radicle. This is the blockchain version of GitHub.
It’s the place where programmers can build, ship, store and edit their code, but it’s not on a centralized server that’s controlled by Microsoft. It’s built on a shared network of many servers ruled by the blockchain network. The result is coder freedom. It’s a dream solution for software developers. It’s why smart money is flowing into this crypto. Facebook tried to create its own crypto called Libra and that bombed out. Libra’s co-creator has left Facebook and joined a VC firm or a venture capital firm by the name of NFX. Guess what NFX’s first crypto investment since he joined the firm. It was Radicle. That gives a huge vote of confidence. There’s a lot of potential upside with Radicle and I bought this coin myself.Once crypto technology is fine-tuned and adopted by the mainstream, this could put you ahead of 99% of other investors out there. Click To Tweet
Number three is Cardano. You guys have likely heard of Cardano. It has not moved much in price because it’s still being developed but the underlying technologies are incredible with Cardano. It’s the fourth largest crypto with a $50 billion market cap as of right now, but it’s totally dwarfed by Ethereum and Bitcoin. There’s no reason why Cardano won’t grow to be as big if not bigger than either Ethereum or Bitcoin because their underlying technology and software program is best in class. It’s based on a proof of consensus protocol.
Go through my last episode where I talked about how to stake and lend your cryptocurrency. We talked about proof of stake and proof of work protocols. Proof of consensus is different. It has sets of rules and processes, which the blockchain validates transactions on the blockchain without needing any central arbiters. Proof of consensus protocols are certainly the technological backbone of cryptos, and this is what makes them work. Without them, cryptos don’t work. The better the proof of consensus protocol, the better the cryptos. Cardano has the best proof of consensus protocol in the world.
Those are the three that I would recommend, Ethereum, RAD and Cardano. That’s why amid this crypto pullback. I don’t even call it a crash. I think a crash in crypto is 80%. We’ve seen 40% to 50% drops. That’s a correction, not a crash. You want to be thinking about buying in on Cardano for the long haul. As cryptocurrency speculation recedes and valuations are a bit reeled in, bringing them back down to earth, and once the underlying technology is fine-tuned and these are adopted by the mainstream, these could put you ahead of probably 99% of other investors out there.
Don’t go all in on these three. There are a lot of other projects that I like that are incredible, but these three projects are ones that you want to have in your portfolio. I think with Radicle and Cardano, put a smaller allocation in. Ethereum and Bitcoin, I would put a bigger allocation of your overall percentage because although they probably don’t have as much upside at this point, there’s still incredible upside for Bitcoin and Ethereum, and they are a lot safer bets.
If you think that crypto is already hot, hold on to your seat because what will happen next is going to change more than just the currency. It’s going to change every single aspect of modern society, how you buy everyday goods and services, how you pay your taxes or buy a home or even the way you vote. This is going to unleash a lot faster than we could possibly imagine. Get yourself some allocation into this space. I think everybody should have some allocation of their portfolio to crypto.
If you’re a young investor and you’re only getting started, it’s going to be tempting to not put 50%, 80% or 100% of your overall investible dollars into crypto. I understand but don’t do it. You’re making a huge mistake. If you do, it’s too much risk that you’re going to be taking on. A percentage, 20% or 25% type range of your total investible dollars into crypto and tech stocks is a smart move so that you can capture the upside if these things crank like what we think is possible. If they don’t go, then it doesn’t wipe you out and you have to start all over.
With that, I hope you guys take advantage of these picks while the market is still prime for a great buying opportunity. You want to be buying when everybody else is not talking about it and is a little bit more fearful like what we’re experiencing right now. This is the time to buy. Let her rip.
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