Well, the unexpected is happening. In past cycles, memecoin hype has been fairly limited and only pops up during about 25% of the bull run. So naturally, most crypto experts have been expecting the same thing to happen this time.
Only, that is not the case.
In fact, memecoins have become the “norm” this cycle, and utility coins have become the “exception.”
I am coining this “The Great Rotation” – a rotation from utility coins to memecoins.
This does not mean I believe that utility coins are history. Utility coins will continue to do well, but not as consistently as memecoins. Below, I’ll comment a bit more on some strategies for playing this unique situation.
But first, here’s WHY I believe this is occurring. To put it simply, the market as a whole is very smart. The market learns fast. The market doesn’t like inefficiency.
Utility coins
Utility coins contain a massive amount of inefficiency, and that inefficiency often leads to unfairness and insider profit being prioritized before retail traders can make money.
When most utility coins launch, insiders, venture capitalists, and KOLs (influecers) have already had an opportunity to buy the project at much cheaper prices. Those insider tokens then slowly flood the market in the form of “vestings” and “token unlocks” over time – usually about 6-12 months time after the project launches.
Memecoins
Memecoins – at least, the category leading memecoins – are typically “fair launches” which means that there are no insiders, no early investors, and everyone is on an equal playing field. Since the ethos of crypto itself was built around this kind of fairness, in an attempt to escape the clutches of the centralized and unfair traditional banking system, it’s no surprise that the crypto market has come to favor memecoins over utility coins.
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So, which utility coins do I think are still worth investing in? Well, another unique factor about this current cycle is that there are TOO MANY new coins, and the coins that do well tend to be category leaders, rather than smaller or medium size narrative plays.
I would consider sticking to category leaders in each narrative within the crypto space. For example, in the AI narrative, I personally believe that the leader – $TAO – is very likely to outperform all of the smaller and medium size competitors.
In fact, in this case it may be best to just “sit on your hands” and hold $TAO for the duration of the bull run, rather than frantically trading in and out of many other cryptos that go up and down daily.
Which memecoins do I like, and why? Stay tuned for the next article.
*Any tips, predictions, or strategies published are entirely the opinion of the author, and are not guaranteed to be correct or result in financial gain. The Author is not an employee of Bovada.
Please be aware that there are always financial risks involved in gambling and it is the responsibility of the individual to place bets with or without the information provided on this website. Bovada cannot be held responsible for any financial losses that may incur as a result of following any of the tips, predictions, or strategies provided on this website.
