Welcome to part four of the series of articles from Revix designed to help you understand the flow of money through different types of crypto assets.
In this article, the company examines historical trends that appear to drive a predictable sequence of investor behaviours following a bitcoin price rally.
Part 1 of this series examined why bitcoin tends to be the first to move, its power to usher first-time crypto investors into the fold, and how that has been shown to trigger the flow of money we are discussing in this series. (Bitcoin is up 31% since part one was published).
Part 2 looked at why ethereum tends to be next to move. We explained that this is primarily due to its sheer size (ethereum is the second biggest crypto asset by market cap) and because it supports an entire ecosystem of applications and services. (Ethereum is up +63% since part 2 was published.)
Finally, part 3 examined how, in 2021, we saw several large-cap altcoins keep pace with ethereum rather than rallying after ethereum’s price spike, as they have in the past. This can mainly be attributed to the fact that the large-cap altcoin space is now a larger and more diverse sector, which includes several real competitors vying for etheruem’s throne as the king of smart contracts.
Getting to know the next big things
With several large-cap altcoins moving along with ethereum for the first time in 2021, it’s more difficult than ever to predict where the money will flow. Investors interested in crypto assets with long-term disruptive potential have more options than ever before, but with these options comes opportunity.
The chart below shows the returns of the five major altcoins, excluding ethereum, since bitcoin reached its all-time high.
It’s clear that investors are becoming interested in different blockchain ecosystems and crypto assets that solve different problems while all are serving the same goal: global blockchain integration.
Understanding the exact use cases of these alternative crypto assets will give you a clearer understanding of the major players and the major sectors of interest defining the crypto space in the near future.
5th: Cardano (-8.09%)
Cardano is a proof-of-stake blockchain with a cryptocurrency called ADA, named after famed mathematician Ada Lovelace. It was founded by ethereum co-founder Charles Hoskinson and aims to compete directly with ethereum.
Cardano has earned all its comparisons to ethereum. It calls itself the first third-generation cryptocurrency, aiming to tackle scaling and infrastructural problems that were revealed in the first- (bitcoin) and second- (ethereum) generation blockchains. Specifically, cardano aims to solve problems related to scalability, interoperability (how blockchains communicate with one another), and sustainability issues facing cryptocurrency platforms.
4th: Uniswap (-0.72%)
Uniswap is like the New York Stock Exchange, but for crypto. Uniswap leverages multiple crypto assets, including its native UNI cryptocurrency, to provide a service similar to a traditional exchange. The difference is that Uniswap has no central operator or administrator, making it fully decentralised.
Unlike most exchanges, which are designed to take fees, uniswap is designed to function as a public good — a tool for the community to trade tokens without middlemen. Also, unlike most exchanges, which match buyers and sellers to determine prices and execute trades, uniswap uses a simple maths equation and pools of tokens and ethereum to do the same job.
3rd: Binance coin (+10.52%)
BNB is the native cryptocurrency of the Binance network. Binance coin was originally created as a token on the ethereum network, but Binance has since developed its own network, the Binance smart chain (BSC).
The BSC offers similar features to ethereum in that it seeks to develop an ecosystem of decentralised finance (DeFi) products and services by facilitating these financial transactions using smart contracts. It is, however, able to do this at a fraction of the cost.
BNB was firstly created as a utility token for the Binance exchange.
A utility token is a crypto asset that, rather than serving as a currency, gives users access to products and services on that specific platform.
BNB’s original use case was to offer Binance users discounted trading fees when paying in BNB. Since then, BNB has become a whole lot more useful, allowing holders access to Binance features, including trading, investing, earning interest, lending, borrowing and much more.
Much like ethereum users use ether to pay fees when interacting with ethereum protocols, BSC users will need to use BNB to interact with the network and the applications built on top of it.
2nd: Polkadot (+19.9%)
Polkadot was designed with one purpose in mind: to unite an entire network of blockchains, from bitcoin to ethereum and everything in between.
As things stand, developers have to choose which blockchain to build their applications on. Each chain is unique and has its own strengths and weaknesses, which developers have to weigh up when deciding where to develop. As a result, many blockchains make different trade-offs to support specific features and use cases. As blockchain specialisation increases, the need to transact between them will only increase.
This is where Polkadot steps in.
Polkadot is a blockchain that provides an environment that other blockchains, known as “parachains”, can run on. It essentially provides the infrastructure that other blockchains can use to interact with one another securely.
Polkadot enables these different blockchains to operate seamlessly together at scale. This gives developers the flexibility to opt into those parts of the polkadot network that suit their project and exclude those that don’t. It also makes it possible for their projects to operate across multiple blockchains, rather than being locked into only the blockchain that the project is built on.
Polkadot’s cryptocurrency, DOT, plays a key role in maintaining and operating the Polkadot network.
1st: Solana (+41.58%)
Solana is a blockchain network that seeks to develop an ecosystem of cryptocurrency-powered products and services.
Solana offers similar features to ethereum, but it differentiates itself by providing faster transaction times, lower fees and more flexible programming capabilities.
Solana is built for speed and can currently execute over 50 000 transactions per second. Bitcoin and ethereum, on the other hand, can currently process five and 15 transactions per second respectively. For reference, Visa’s payment’s network is said to process over 2 000 transactions per second on average. Faster transaction processing speeds are necessary for decentralised finance applications based on blockchain technologies.
Not only is solana faster, but it is also a lot cheaper. How cheap?
While it costs users around US$30 to transact on the ethereum network, that same transaction would cost around $0.00025 to execute on the solana network.
Developers can also write and launch customisable applications in multiple programming languages on the solana blockchain.
Solana’s native cryptocurrency, SOL, is used to pay for executing programs and sending transactions.
Where to from here?
It’s clear that deciding where to invest in this phase of the crypto price cycle has become more complicated than it was just a year ago. We’re in the midst of a flat-out race to see who will be the first to genuinely challenge ethereum’s position as the second biggest crypto asset by market cap, and investor opinions on the matter couldn’t be more polarised.
Deciding what to invest in is hard enough — you don’t need fees weighing you down, too.
Don’t worry, Revix is making it easy to get in on the altcoin action.
Revix, a Cape Town-based crypto investment platform, is offering crypto investors a prime opportunity to add the top-performing large-cap altcoins to their portfolios.
Zero fees on purchases
Back the altcoin you think is going to change the world, or expose your portfolio to all of them. Either way, you pay no buying fees.
Revix is backed by JSE listed Sabvest and offers access to all of the individual cryptocurrencies we’ve mentioned in this article, including bitcoin, cardano, ethereum, polkadot, solana and many more.
You can get started with as little as R500. Sign-up is quick and effortless, and you can withdraw your funds at any time.
Revix brings simplicity, trust and great customer service when investing in cryptocurrencies. Its easy-to-use online platform allows anyone to securely own the world’s top cryptocurrencies in just a few clicks. Revix guides new clients through the sign-up process to their first deposit and first investment. Once set up, most customers manage their own portfolio but can access support from the Revix team at any time.
Remember, cryptocurrencies are high-risk investments. You should not invest more than you can afford to lose, and before investing, please take into consideration your level of experience, investment objectives and seek independent financial advice if necessary.
This article is intended for informational purposes only. The views expressed are opinions, not facts, and should not be construed as investment advice or recommendations. This article is not an offer, nor the solicitation of an offer, to buy or sell any cryptocurrency.
To learn more, visit www.revix.com.
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