Lost in a world of money pirates, hype trains and weirdly profitable dogs? Allow us to cut through the bullshit and bring you the latest in what’s hot and what’s not.
First though: context. 2020 and 2021 will be remembered as the years that slapped us silly. Millions unemployed, recessions, constant changing of inflation rates and, for those who wanted to add a four-legged furry companion to their family, the prices for designer dogs (and some meme coins) have hit drastic new heights, all while a new virus gallivants the globe.
As stimulus cheques and boredom set in though, much of the world started investing in 2020. This has continued into 2021. But while you could go down the traditional route of stock market trading, many are now also taking a chance on the risky (but oh so fun) world of cryptocurrencies.
The word alone could be enough to confuse you, but in reality, cryptocurrency, and the way it is traded, is similar to that of stocks. You look for trends and you aim to buy low and sell high. However, you can in some instances trade any crypto assets you have bought for others.
Henrik Andersson co-founder and CIO of Apollo Capital, Australia’s leading crypto asset investment firm, tells DMARGE that prices of crypto assets are independent to those of the stock market due to their being a different set of investors.
To some degree, some cryptocurrencies, like Bitcoin, are being seen as a hedge against the stock market, or a form of portfolio diversification. Not everyone thinks this way though. Wall Street diverges in its views on the likes of Bitcoin and Ethereum. Some big wig investors and portfolio managers are putting money behind them; others still sneer at all and every cryptocurrency, highlighting their lack of tangible value.
Then there is the world of ‘shit coins’ and ‘altcoins’ where you are essentially throwing money down the drain, unless of course you hit the jackpot and manage to get in early on the next Dogecoin…
Then you have the latest trend of ‘alt coins’ claiming every sale adds to the liquidity pool (incentivising people to ‘hodl’) and that your involvement will surely take you to the moon – if everyone just works together…
Though it’s ultra risky and there are scammers everywhere, there does seem to be some positive looking communities out there. But it only takes one rotten developer or one person holding too much to spoil everything (as was seen recently with ‘astropup’).
To put it mildly: it’s a rough world out there.
To cut a long story short, here DMARGE brings you our top cryptocurrency investment picks, each month, to help you while away those hours late at night while you nervously cradle your phone. We won’t claim this to be official advice, but rather a discussion of what’s trending, what’s in the news, and tidbits of potentially valuable information we think you should know about each month.
Disclaimer: this is not financial advice. Never invest more than you can afford to lose. The cryptocurrencies mentioned below may not necessarily be ones we recommend you buy, but are the ones seeing traction or being talked about in the news. Before you invest in any cryptocurrency, you should make sure you are in a financially solid position.
All figures in USD (1 AUD = 0.78 USD at time of publishing, 11th May 2021)
Dogecoin (DOGE) $0.480443, $62.21B Market Cap
Dogecoin started as a joke in 2013, based on an internet meme featuring a Shiba Inu dog. Dogecoin was created to satirise the growth of ‘alt coins’ (the majority of which are pump and dump schemes). Technically Dogecoin is is a derivative of Luckycoin which forked from Litecoin and uses a Scrypt algorithm.
Realistically, Dogecoin is one huge community experiment with precious little (some would say no) tangible value. Due to popular demand, however, and the blasting off of cryptocurrencies in the public frontal cortex (and the fact everyone loves a lottery ticket), despite its unlimited supply of coins meaning it can go on inflating forever, Dogecoin has exploded in popularity.
Recent comments by Elon Musk over Bitcoin’s negative environmental impact, and his announcement Tesla would no longer be accepting Bitcoin as payment (which have been followed by Bitcoin’s price dropping), could (emphasis on could) spell good news for Dogecoin.
Nothing is confirmed, but Elon Musk has hinted he might start accepting Dogecoin as payment instead. On May the 14th he wrote: “Working with Doge devs to improve system transaction efficiency. Potentially promising.”
Working with Doge devs to improve system transaction efficiency. Potentially promising.
— Elon Musk (@elonmusk) May 13, 2021
Side note: with Bitcoin seeing a slump, now could be your chance to buy Bitcoin’s dip (then again, it could just keep on going down)…
Summary: you could be late to the Dogecoin party, but it could also keep on growing. Especially if Tesla officially starts confirming it will accept Dogecoin as payment. It could also plummet overnight, as with anything in this light-hearted sphere.
Shiba Inu (SHIB) $0.00001563, $6,179,710,644 Market Cap
After Dogecoin’s heroic spikes (which began in Jan/Feb) people started looking for the next Dogecoin. Plenty of developers have tried to riff off it (with catchy names and the like). Shiba Inu is arguably the catchiest riff right now (Shiba Inu being the name of the dog the Dogecoin meme is based on).
We can’t tell you how trustworthy Shiba Inu is (one owner was given 50% of the stocks and theoretically could pull the rug out at any time). But at least he is doxxed (his name is Vitalik Buterin and he is a Russian-Canadian programmer and writer). Buterin was a co-founder of Etherium and was gifted half of SHIB’s token supply by the anonymous founder of Shiba Inu (who goes by the pseudonym Ryoshi), according to SHIB’s white paper.
Buterin recently donated a huge number of Shiba Inu (as well as a couple other of his other coins) to help support India’s Covid relief. This caused panic among investors, but could win more new investors over in the long run. Time will tell if Shiba Inu spikes again.
It’s also worth noting Binance’s Indian exchange listed Shiba Inu a day after Buterin’s billion dollar donation (Binance is an online exchange where users can trade cryptocurrencies).
Summary: Shiba Inu claims to be the Dogecoin killer. No guarantees this will prove true, but with the hype around, if you can afford it, could be fun for a flutter. Could also be a good chance now (at the time of writing) to ‘buy the dip.’ If you missed getting in early on Dogecoin, maybe this is your chance.
Safemoon $0.00000728, $4,263,525,377 Market Cap
An altcoin that promises to take you to the moon, Safemoon has already spawned numerous imitators and scam coins which have already been rug pulled. Safemoon, for now, seems to still be going ok. It also has an interesting premise where selling involves a tax, which grows the liquidity pool and incentives investors to hold.
As Astropup (a Dogecoin imitator) shows, after a recent rogue developer allegedly sabotaged the whole thing, a project like this can talk a big game but in the end you are at the mercy of the developers and leaders. Safemoon appears to be going ok and is a very interesting project. But as always be smart and never assume you will be getting your money back. Some crypto influencers have called it a scam, others say they don’t care and they are happy to ride the wave and take their chances.
Summary: interesting, quirky, catchy name, ‘tokenomics’ mean it could (key word being could) keep growing for a while longer. Keep an eye on it.
All figures in USD (1 AUD = 0.78 USD at time of publishing, 11th April 2021)
RedFOX Labs (RFOX) $0.241, $333.2 million Market Cap
Setting up in Vietnam, this Australian-owned token on the Ethereum network promises to be usable across a number of digital services. Effectively powering an ecosystem, RFOX will be able to be used in a tournament-based video game, will be a marketplace for non-fungible gaming tokens and will also be able to be used to buy “virtual land”.
Already making acquisitions, and choosing Vietnam because of it’s potential for serious growth in South East Asia (and getting in before the crowds come), RFOX is being described by many as one of the next $1bn projects.
Ecomi (OMI) $0.0043, $720.7 million Market Cap
Ecomi is the name of the Singapore-based technology company that is making moves in the digital collectibles space. Users can buy these digital collectibles through the VeVe app (built by Ecomi) using OMI tokens.
OMI tokens are built on the GoChain blockchain, so you’ll need to check the wallet you use is compatible before making a purchase, but to make things even easier, Ecomi offers its own Secure Wallet that lets you store your OMI tokens in complete safety and privacy.
Theta (THETHA) $10.54, $10.5bn Market Cap
Theta is all about video streaming. It’s software that allows for computers to operate a decentralised video streaming platform, which effectively means that you will be able to stream high-quality video on your computer, no matter your location. Say goodbye to location-restricted content, basically.
As more people join the Theta platform, the more computers are naturally involved, and these computers are used to offer up any spare bandwidth, which helps to improve the quality of video streams for other users wishing to stream. Those that do offer their bandwidth are rewarded for their efforts.
All figures in USD (1 AUD = 0.77 USD at time of publishing, 22nd March 2021)
Broad Market Analysis:
Non-fungible tokens are currently the hottest thing in town, a Beeple NFT sold for US$69 mln… yes you read that correctly. Gaming tokens such as ENJ, MANA, RFOX, ALICE, SAND have been performing extremely well thanks to this wave of hype about NFT’s and blockchain gaming. Bitcoin and Ethereum are consolidating at high levels and look to be preparing for an explosive move. DeFi crypto assets have broadly been selling off since mid Feb and will likely follow Ethereum if we get more upside. Ethereum layer 2 scaling solutions such as ‘Optimism’ are only weeks or months away which will make altcoins such as ADA, DOT and BNB less attractive.
Matt’s Top Coins
SushiSwap (SUSHI) $19.26, $3.02bn Market Cap
For a variety of reasons my top pick for this month would have to be SUSHI. SushiSwap is a decentralised exchange (DEX) which allows users to trade between any two ERC20 tokens on the Ethereum blockchain, with SUSHI being the governance token that can be used to vote in proposals and receive a share of the revenue generated by the protocol. Many crypto investors will be aware of Uniswap (UNI) but may not know much about SUSHI, SushiSwap started life as a ‘fork’ of Uniswap in late August 2020 but has grown into an extremely differentiated product. Currently, SushiSwap is a more decentralised version of Uniswap.
We can compare Uniswap and SushiSwap on a simple market cap to total value locked (TVL) ratio. Total value locked refers to the amount of liquidity locked in the protocol, liquidity is the lifeblood of any decentralised exchange as it enables assets to be transacted between users.
UNI Mkt Cap: US$15.6 bln
UNI TVL: US$4.9 bln
SUSHI Mkt Cap: US$2.7 bln
SUSHI TVL: US$4.7 bln
When two similar products are valued so drastically different, there is a reason. The market is currently excited about the prospect of Uniswap releasing a major update (V3) in the next couple of months, which is pushing up the price of UNI significantly. However, it is possible that the market is undervaluing the fact that Sushi are also on the verge of major developments such as expansion onto other blockchains, layer 2 Ethereum adoption (enabling cheaper transactions for users), lending market integration and even a launchpad for new products. Sushi undoubtedly have some of the most talented developers on their side, and their history of rapid protocol development shows this.
Another important feature of SUSHI and the SushiSwap protocol is that stakers of SUSHI directly receive a share of the protocol’s fee revenue. Most investors will be used to the idea of dividends, SushiSwap pays their token holders a continuous dividend through xSUSHI (yield bearing token). This enables SUSHI to be valued using traditional stock market valuation techniques, which is an exciting development in an industry that has been ridiculed for only being good for speculation.
If we can value SUSHI using traditional techniques, why don’t we compare SUSHI to the upcoming Coinbase IPO, centralised exchange vs decentralised exchange. In an SEC filing, Coinbase’s dividend policy states “[We] do not anticipate paying any dividends on our capital stock in the foreseeable future”. Meanwhile there is US$1.3 bln worth of SUSHI earning an average APY of 4% (this is variable), roughly equating to US$54 mln per year flowing directly to stakers. Coinbase recorded a net profit of US$322 mln in 2020 and is set to IPO at a value around US$100 bln, SUSHI is currently valued at US$2.8 bln. Coinbase and SushiSwap are undoubtedly different, but if SUSHI was valued at the same price to earnings ratio as Coinbase (310), it would be worth $16.77 bln.
The final thing to note is that SUSHI is an inflationary token, so the value of SUSHI will continually be negatively affected by the increase in circulating supply over time. To keep up with inflation, users can stake their SUSHI to receive yield as mentioned previously or deposit other crypto assets into Sushi Liquidity Pools to receive SUSHI rewards.
Siren (SI) $2.87, $24,017,000 Market Cap
The speculative low cap coin for this month is Siren Markets (SI). Built on the Ethereum blockchain, Siren Markets is a distributed protocol for creating, trading and redeeming fully-collateralized options contracts for ERC-20 tokens on Ethereum. With options being a popular derivative for stock market and crypto traders alike, it is a big market that Siren aims to capture. SI began trading on the 3rd of March and is currently only available on Uniswap.
SI is the governance token for Siren Markets, eventually SI stakers will receive protocol fee revenue just like SUSHI, but that feature is currently turned off to attract traders with lower fees. In the decentralised options space, there is one main competitor named Hegic (US$130 mln market capitalisation). To get a better idea of why Siren introduces a superior model to Hegic, we will compare the two.
In an options market there are two sides to every contract, a writer (seller) and a buyer. In both Hegic and Siren the sell side of the contracts is a liquidity pool that is used as collateral for the contracts that are bought by traders. Liquidity providers earn a yield for providing this collateral in the form of premium, trading fees and rewards (SI or HEGIC tokens). These liquidity providers take on a certain amount of price risk, just as option sellers do in a normal options market.
The Hegic liquidity pools are bi-directional, meaning that traders can buy both Call and Put options from the same collateral. Liquidity providers (LPs) in this pool are essentially short volatility, meaning they will only make money if BTC or ETH (depending on the pool they are in) trades sideways. Crypto is the most volatile market in the world and Hegic LPs are betting against volatility. It’s like underwriting fire insurance on a house that is close to a bushfire.
Siren liquidity pools are not bi-directional and LP’s can choose the direction that they want to bet on. Head to https://app.sirenmarkets.com/pool to see the liquidity pools and APY’s available. Other factors working in Siren’s favour are far cheaper gas fees to Hegic (Ethereum network fees, a common problem) and multiple coins supported (BTC, YFI, UNI, SUSHI compared to just BTC & ETH).
Siren (SI) is also an inflationary token, so look to keep up with this inflation by participating in liquidity pools that earn SI.
Farm of the Month:
Check out https://app.vesper.finance/ for some of the best yields in DeFi thanks to VSP rewards. Deposit USDC earn 54% APY. Deposit ETH or BTC and earn over 20%. (Yields are variable and will not last).
December 2020/January 2021
All figures in USD (1 AUD = 0.75 USD at time of publishing)
As we come to the end of 2020 and look forward to a (hopefully) more fruitful and enjoyable 2021, we reached out to Matt at Apollo Capital once again for his market analysis and top picks for crypto assests going into the New Year.
It’s definitely an exciting time to be in crypto, new all-time high for Bitcoin, the cat is well and truly out of the bag.
December 2016: Retest all time high of US$1,200
December 2017: Previous all time high of US$20,000
December 2018: Bitcoin bear market bottom at US$3,000
December 2020: New all time high above US$20,000
December 2021: ?!?At the moment most of the attention is on Bitcoin with only some altcoins outperforming in the month of December. The big end of town is embracing Bitcoin more than ever before, the most significant recent endorsement comes from the Chief Investment Officer of Guggenheim (Assets under management of over $270 Billion USD) who stated that Bitcoin should be worth $400,000 based on fundamental analysis of its scarcity.More broadly, the outlook for crypto assets and equities looks positive as the US announces a $900 Billion stimulus deal. While the government can destroy the purchasing power of the US dollar by passing this sort of stimulus, Bitcoin’s supply inflation of 1.7% can not be altered, making the asset attractive to companies such as Guggenheim who are well aware that ‘cash is trash’. – Matt’s Top Coins
Yearn Finance (YFI) $24,999.35, $749,181,235 market cap
Nothing quite sums up the open, permissionless and fast paced nature of Decentralised Finance like Yearn Finance. Yearn Finance is described as “a suite of products in Decentralised Finance, maintained by various independent developers and governed by YFI holders”.
The most popular products on Yearn are the capital pools known as ‘Vaults’, these vaults are designed to automatically generate yield based on opportunities present in the market. These vaults automate complex yield farming strategies in order to generate the maximum amount of yield possible. Vaults are created and maintained by developers known as strategist’s, who are incentivised by receiving a share in the profits of the strategies they create. Other products include lending, insurance cover, swaps (exchange) and more.
YFI reached it’s all time high price of US$43,678 on the 12th of September 2020. With a total supply of only 30,000 YFI, this price put a US$1.3 billion valuation on the 2 month old coin. YFI subsequently witnessed a brutal sell off and traded for around US$8,500 for two days in November. Since then, Yearn Finance have announced multiple partnerships with similar DeFi projects which have been described as the first M&A activity performed by a decentralised protocol. These partnerships are a core part of Yearn Finance’s imminent V2 release.
You can read a more comprehensive analysis of Yearn Finance on the Apollo Capital website.
In short: Decentralised bank, governed by YFI holders.
dHedge DAO token (DHT) $1.07, $7,088,446 market cap
dHedge is a decentralised asset management protocol built on Ethereum. dHedge allows individuals around the world to create a non-custodial on-chain fund in a single transaction, anyone can then invest into these funds and allow the fund manager to trade and manage their funds. dHedge leverages the Synthetix exchange discussed in the last article, meaning that all assets traded of dHedge are synthetic assets. DHT is the DAO (decentralised autonomous organisation) governance token, meaning DHT holders can vote on the future of the protocol.
dHedge is a one-stop location for managing investment activities on the Ethereum blockchain, you can put your capital to work in different strategies based on a transparent track record. The dHedge leaderboard tracks risk-adjusted performance of all managers, decentralised asset management marks the beginning of a new era of transparency. There is currently US$5.7 million invested on the protocol, with 217 pools (funds) and 201 total managers.
In short: The future of asset management.
Basis Shares (BAS) $183.81, $28,874,072 market cap
This one is a little more complex but ‘algorithmic stablecoins’ are the hottest thing in DeFi right now so it makes sense to mention it. An algorithmic stablecoin aims to maintain it’s peg to 1 US dollar by altering the supply of the token based on the demand for the token e.g. if demand exceeds supply the price will be above $1, so the protocol will increase the supply in order to push down the price. Basis cash uses a three token system (BAC, BAS and BAB) in an attempt to maintain BAC at $1. When the price of BAC (Basis Cash) is above $1, stakers of BAS (Basis Shares) receive the increase in supply of BAC and earn a ‘passive income’. When the price of BAC is below $1, users can turn their BAC into BAB (reduce supply of BAC) in order to later redeem this BAB (Basis Bond) for more BAC than they initially gave (active income).
Basis Cash was a 2017/2018 ICO that raised a lot of money from venture capitalists and crypto investment funds. However, regulators stopped the original Basis project from ever coming to fruition. In early December 2020, two anonymous developers released the project to the delight of the DeFi community. Algorithmic stablecoins such as Basis Cash are new, risky, speculative but potentially high return generators. Users should not participate in such protocols unless they fully understand the risks associated.
Click here for a more complete guide to Basis Cash.
In short: Basis Shares are an ownership token that receives inflationary rewards from Basis Cash. BAS can be hard to understand, but with Basis Cash only being launched on Dec 1, it’s definitely the latest craze.
All figures in USD (1 AUD = 0.74 USD at time of publishing)
Bitcoin (BTC) $25,058, $462bn market cap
You can’t talk cryptocurrency without mentioning Bitcoin. The most well-known crypto asset is, as Henrik Andersson tell us, “increasingly seen as digital gold.”
Matt adds, Bitcoin has really been coming into its own as a ‘store of value’. In recent months there have been several notable investors/ companies praising and adopting BTC, comparing it to gold and publicly taking out positions.
These investors include Paul Tudor Jones, Stan Druckenmiller, Microstrategy (NASDAQ: MSTR) are all adopting bitcoin as their ‘primary treasury reserve asset’, Rick Rieder (BlackRock), PayPal, JPMorgan etc.
In short: Seem as digital gold
Ethereum (ETH) $615.18, $69.9bn market cap
Ethereum is the next asset/ protocol that is coming into its own. Many incredible decentralised applications (dApps) have been built on the Ethereum protocol throughout the ‘crypto winter’. The most notable of these applications is the financial application known as DeFi or decentralised finance.
We are bullish on decentralised finance because it is the first time in human history that we have open and permissionless innovation in finance on a global scale and defipulse.com is a great website to check out the biggest names in DeFi. There is currently US$14.24 billion locked in DeFi protocols.
In short: Leading platform for decentralised applications.
Key areas in DeFi include:
- Synthetix assets
- Decentralised exchanges
- Decentralised asset management
Aave (AAVE): $105, $1.173bn market cap
Aave, taken from the Finnish word for ‘ghost’, is the leading protocol for borrowing and lending, and the current market size is US$1.9 bln.
Aave is described as a “decentralised non-custodial money market protocol”, which can allow users to either deposit or borrow. It’s used predominantly by developers, and being an open-source protocol, can be integrated with any third-party service or application.
AAVE is the protocol’s governance token, meaning that holders of the token can vote on the outcome of Aave Improvement Proposals (AIPs).
In short: Governance token of the leading decentralised credit (lending) market protocol.
Synthetix (SNX): $6.95, $833.8bn market cap
Synthetix is a protocol that enables trading of a range of synthetic assets such as crypto, foreign exchange, commodities and equities. Synthetic assets are created by staking SNX. When you stake SNX you receive exchange fee rewards and staking rewards (about 30% APY).
Synthetic assets hold their value because they are backed by a decentralised pool of crypto collateral. The deep liquidity of these synthetic assets will power a new era of financial tools not possible without blockchain technology.
In short: Creator of synthetic assets.
Polkadot (DOT): $6.49, $6.3bn market cap
The ‘new kid on the block’, Polkadot was a significant new project announced in 2017 and built over 2.5 years throughout the ‘crypto winter’ by some of the most respected names in crypto. Polkadot is a ‘next generation’ blockchain and has a few key differences to Ethereum.
Because Ethereum is in such high demand, there have been issues with network capacity and transactions fees. This has made alternative blockchains such as Polkadot an attractive investment. DOT has a limited ecosystem built on top of the blockchain, but that is because it is new. It is a longer-term investment (possibly overvalued currently), the key thing to watch with DOT is whether developers choose to build on Polkadot over Ethereum.
In short: Up and coming platform for decentralised applications.
We’ll be regularly updating this piece, bringing you the latest and most exciting cryptocurrency assets available right now.