Many individual investors lose on token investments Investing in altcoin tokens is not easy.
In particular, individual investors in Japan prefer small tokens, and I suspect that many investors have suffered significant losses after 2018.
Since March 2019, the cryptocurrency market as a whole has recovered, but bitcoin (BTC) has enjoyed much of its recovery, and the price performance of bitcoin smaller than other small tokens remains slightly. Tokens that record performance above Bitcoin include exchange tokens linked to clear cash flows, such as BNB, and (COSMOS), LINK(ChainLink), ren
Protocol) is limited to promising projects such as What is the difficulty here is what is a promising project?
In cryptocurrencies, it is impossible to calculate theoretical prices, and it is difficult to quantitatively explain fair values such as COSMOS, LINK, and REN, where price-performance was good.
In this regard, BnB and so on, it is easy to calculate the theoretical price to the extent that the profits of the company are burned quarterly and using the DCF method and the profit-to-price framework, and it may be an exception.
In any case, however, it goes without saying that many individual investors’ investment decisions are not rational and that they will invest in their own “promising projects”, even if they lack the underlying knowledge.
Investment is not always successful even if technology development progresses and vision progresses. A good example of how investing in a promising project or a project that is developing in the future is going to fail.
It’s a recent announcement from Zilliqa and ThunderCore. Zilliqa’s founder and CEO, Xinshu Dong, left the project team and thundercore’s chief scientist left the project.
Since then, the price has dropped significantly.
Zilliqa implemented sharding and parallel processing, and ThunderCore was expected to be a scalable public blockchain, with EVM compatible. There are many projects that envision sharding, but so far none have been realized on the main net (Ethereum, IOST, etc.).
In addition, there are cases where shards are run on the test net, but the case where cross shards could be operated on the test net is not scary. It was such a challenging implementation that Zilliqa was one of the few projects actually working on development, but it resulted in the CEO leaving the project.
In general, the turnover of founders and early project members is a sign of the bad situation of the company or the project.
Zilliqa is not a project called Scam, at least for now, but it doesn’t seem to be working.
Awareness of investing assets in startups and early projects What you can learn from this is that even if you have good engineers and visions, your project can fail, and you’re more likely to do so.
Any hope for these babies? pic.twitter.com/fCUk3Uw3OX
— Dovey Wan 🗝 🦖 (@DoveyWan) August 8, 2019
It can also be said that the minimum of good engineers and visions is the minimum. Venture capital typically invests 5% in 10 to 20 companies in the early stages of business and builds a diversified portfolio that will allow you to return even if the rest goes bankrupt.
If you look at small tokens as investment targets, it’s no different from the kind of startups this venture capital invests in. It’s only been a few years since it actually started, so if you’re investing, you should build a portfolio similar to that venture capital.
Nevertheless, it is natural for individual investors to spend 30% or 50% of their total assets on a single token. My sense is that up to two to three percent of the portfolio contributes up to a single small token. You should have several such tokens and more than 60% of your assets to have stocks, bonds, and bitcoins.
What individual investors need is to be aware that they are investing their assets in startups and early-days projects. Cryptocurrencies and blockchain have brought investment opportunities for early-stage projects, but the benefits will remain the same as they can be enjoyed by those who have some investment knowledge and are actually able to do so.