Crypto Diary 0005: To the Moon
Fifth in a series of diary entries about the blockchain and cryptocurrency by Jess Lander.
You didn’t need to know anything about crypto to at least have heard of this new thing called Dogecoin — pronounced doge, not dog — in spring 2021.
O.K., so it wasn’t technically new. Created in 2013 as an offspring of the Shiba Inu meme, Dogecoin took off in early 2021 fueled by a media frenzy and participation by celebrities including Elon Musk, Snoop Dogg and Mark Cuban.
Dogecoin is considered an altcoin, the term used for cryptocurrencies other than Bitcoin. Altcoins are similar to Bitcoin, but may have any number of differences that seek to improve upon Bitcoin’s technology and capabilities.
While so far no cryptocurrency has come close to superseding Bitcoin in value, many crypties believe Ether and the Ethereum blockchain will. But currently, as the second biggest cryptocurrency by market cap, ETH is still hovering at around $4,000 a coin, a mere fraction of a Bitcoin’s $48,000 price.
There are over 10,000 altcoins out in the world today and only a select few, like Dogecoin, have actually achieved any significance. Even fewer will prove valuable in the long haul, most strategists say. The majority of altcoins are likely to disappear in the coming years as the crypto market stabilizes and evolves.
My strategy up until now with altcoins has been to ignore them.
Dogecoin’s time in the spotlight was short. In May, it had become the fifth most valuable cryptocurrecy, its value having increased more than 20,000 percent in one year’s time. Just a few days later, it had dropped 43 percent and as of this moment, it’s the tenth strongest cryptocurrency, trading at $.17 a coin compared to $.75 at its peak. But those who jumped on the Dogecoin bandwagon at the start of the media frenzy — and cashed out before it crashed — were rewarded with a strong return on their investment.
And that’s the point of trading altcoins. You strike just before the iron gets hot, and then get out just before it cools. Sometimes, this is a matter of minutes.
The risk here is even higher than investing in the highly volatile Bitcoin and accurately predicting which cryptocurrency is going to jump in value next, or fall, requires way more time on Twitter and the Internet than I have to give.
For the purpose of this column, I threw some money this month into a few altcoins deemed promising by “the experts” and a little bit of Internet research.
The currencies I chose were Solana, Cardano, and Polkadot (the last for its cute name), which at the time were trading at $186, $1.50, and $33 a coin, respectively. It’s been about two weeks, and I’ve either lost a few bucks with each, or am hovering around the same.
It’s become clear to me that to make any real money with altcoins, I need to invest thousands, not $50 or $100 here and there, and pay very close attention to the market of each, which tends to rise and fall by the minute or hour.
The potential to get rich, or rich-ish, quick is there with altcoins. But before I invest more money, I need to invest more time into fully grasping this weird, confusing, and unregulated world.
Hopefully, by the time the next Dogecoin comes around, I’m ready to take off the muzzle.