Sep 9, 2021
Bitcoin was the first cryptocurrency, and everything that came after it was known as an “alt coin” — an alternative cryptocurrency to Bitcoin. With over 11,000 alt coin projects available, Alex and Jacki speak to the importance of vetting a project, types of alt-coins, indexes, and staying current with the regulatory environment of your state or country.
0:34 - There are over 11,000 cryptocurrency projects to invest
0:45 - People compare this to the 90s internet dot com bubble where 90% of projects failed.
1:00 - But some survived! Who will survive crypto?
1:26 - You must DYOR (Do Your Own Research) and due diligence before investing
1:35 - There are people who use trading tools, like Market Cipher, to trade purely on data
1:40 - When researching, find out who is working on the project, what it solves, and who is funding it
1:52 - Follow the money! Who is expecting a return on investment and how soon?
2:07 - Alt coins are a great way to learn more in crypto
2:08 - We are not financial advisors, but it’s always safe advice to never invest anything you can’t afford to lose
2:14 - Alts are a double edge sword, they can explode in value quickly, but the higher up, the harder they fall.
2:30 - Alex likes to find projects that have unique use cases & utilities and also partnerships with well-known companies or institutions.
3:00 - It’s important to not invest with emotion, it’s easy to get attached to a project, but sometimes it doesn’t make financial sense to hold them
3:17 - Crypto market tends to run in a 4 year cycle—crypto markets tend to hit all time highs 12-18 months after the Bitcoin halvening (every 4 years, last one in May 2020)
3:45 - In bear markets, alt coins tend to lose 85-99% of their value.
4:25 - This bull run saw a big bump in NFT trading, and introduced the Metaverse Index to more people
4:50 - Indexes, or Token Sets (on the Ethereum network), are similar to traditional financial index funds.
5:00 - With a token set like Metaverse or DeFi Pulse, when you invest in the token you’re investing in a basket of cryptos, so the performance of the token is based on a weighted index.
5:36 - Stable coins offer some relief for new crypto adopters. These coins simply represent a real asset (like gold or silver) stored somewhere in the world.
5:58 - The USDC is a stable coin backed by a US dollar.
6:40 - Some common pitfalls when getting into alts: the exchange you use might not carry the coin, you may need another wallet, the coin may not be legal in your area
6:52 - It’s very important to understand the regulation in the state and/or country you live in.
7:00 - For example, New York State requires a bit-license for available exchanges.
7:20 - Cryptos with utility are good to look at, such as Ether because it is the “gas” that “fuels” the Ethereum network.
8:00 - Binance offers a ton of coins, but we don’t have it here in New York State
8:26 - When MCA works with clients, we steer from Binance and instead direct them toward regulated, reputable exchanges that offer some type of insurance or protection for their users.
8:43 - Heads up! Moving your crypto around or cashing it out can be a taxable event!
9:13 - There are tax softwares out there - like cointracker.io - that can help you keep track of things.
9:44 - What is the correlation between Bitcoins price and the alt coin market?
10:00 - Generally, Bitcoin is the benchmark for the industry - back in ’17 Bitcoin would pump, and Ethereum and other coins would follow suit.
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