More than a decade has passed since the mysterious Satoshi Nakamoto created Bitcoin, the first and by far the most popular cryptocurrency in the world.
Despite its reputation, Bitcoin is not the only cryptocurrency. Many new cryptocurrencies have emerged, such as imitations and by-products of Bitcoin, and today there are more than 7,000 cryptocurrencies on the market. With such a wide range of cryptocurrencies to choose from, investors are confused about which cryptocurrency to invest in. Or, we can say that there is a concern about crypto investment in a broader sense. We have compiled the blog post of Şant Manukyan, IS Investment International Markets Director, to be a useful content on this subject.
Global strategist Şant Manukyan shared a blog post “on what he looks at when investing in crypto”. Manukyan shared the points he looked at while creating my own portfolio, and firstly emphasized that the coins mentioned in the article should not be considered as a buy or sell recommendation.
According to Manukyan, Bitcoin and Ethereum are the two cryptocurrencies that must be in the portfolio, even if their rates change from time to time. In this direction, the famous strategist first touched on how Bitcoin can be evaluated. According to Manukyan, although there are many evaluations, he prefers to focus on two points: the network effect and the pricing of BTC as digital gold. Manukyan explained the network effect as follows:
“The first point is the network effect. One of the features of the dollar is that it is accepted in any geography in the world. […] That’s why I keep track of my wallet data. Although BTC is not a tradable asset, is the number of wallets increasing due to its theoretical availability? How many wallets are active? How many of them have BTC, how many have recently moved, how many passively carry BTC? How much is the average / media amount of BTC in the transaction? As the number of people who can transact with each other increases, BTC will increase its importance, more precisely its efficiency, even if it has no value. ”
Manukyan briefly explained the second evaluation criterion as “the grab of gold from the market share” of Bitcoin and stated that in the coming years, BTC will also stand out with its collateral feature, and Gold and Bitcoin will have a different status with changing dynamics.
Manukyan touched on the DeFi sector while explaining how he formed the rest of the portfolio. He emphasized the importance of Ethereum at this point and made the following statements:
“Although I think ETH2 will be successful, it is necessary to put eggs in different baskets within the portfolio management logic. In the event that the upgrade fails or the investors’ loan to Buterin expires, competitor coins will have the potential to yield a much higher than normal return. At this point, we need to look at the nature of the projects. If there are a few coins that can provide enough infrastructure (aside from details such as the number of validators, etc.), I try to choose the one with a high return in the case of staking. For example, Polkadot is only one of the coins that stands out with this aspect. ”
Later in the article, he talked about Defi-linked Dex (decentralized exchanges) and explained how to set a price for a Dex token. In this section, he expressed regulatory concerns and used the following statements:
“In the short term, instead of opening Defi positions directly, I prefer to carry only more indirect positions within Defi like Link. Band is another alternative. ”
Lastly, Manukyan stated that he followed the market trends. The famous strategist, who cites XRP as an example, said:
“I believe the SEC will win the case, but the problem with XRP will be the decrease in liquidity that will result from its delisting on US crypto exchanges if it is defined as a security rather than the direct outcome of the case. A second point is the Tether case. Tether’s market value (known price is not a factor here) has increased 3 times since August 28, while USDC has grown approximately 6 times. In this case, Stellar, the new chain of USDC, or Algorand and Solana, which I have already mentioned before, suddenly became prominent stories in the eyes of investors. Such stories, dynamic stories, may lose their significance after 1 month. Therefore, it may not be the right approach for investors pursuing the hodl strategy.