Investing in the crypto markets can be challenging. When I first started, I just invested into the project that was getting the most hype. I would watch YouTube for hours, visit project websites and read everything I could. When Bitcoin took its massive jump recently, I noticed what most people did. Everything seems to chase the BTC shadow. This got me thinking about the future of this market.
See, I understand that most people look at the coin market as Stablecoins or AltCoins. I started believing that this market was much bigger than that, and that it would take years for the distinct crypto categories to come into play. That's right, crypto categories. This market is still in its infancy, so the little category label on some sites like coindesk.com are going unnoticed. To me this translates to industries. If you have spent any time investing in Tesla. You know that the bears are always preaching that Tesla is losing market share. Well, they are just trying to confuse retail investors into believing other vehicle manufactures are beginning to out sell TSLA. Tesla fanboys like myself know that this is poo-poo. Because supply and demand commands the market. Always has and always will, even for the crypto market. The more important thing for the purposes of this article is that Market Cap is broken down by industry. Kohl's and Safeway are both stores, but they are not competing for the same market share because they offer different products.
This brings me to factor #1: Market Cap leaders
Market Capitalization is a basic mathematical equation that takes total number and coins (shares) and multiplies it by the current value. Example: BTC currently has a MC of 1.21 trillion. 18.87 million shares multiplied by 64,288.44. Knowing this, I put together a spread sheet of the top 60 market share holders. The data included Name, Shares, Current Value and Position. So now I know who the top 60 crypto currencies are, but I need another distinctions to break it down even further.
This brings me to factor #2: Total Supply
Total supply refers to the number of coins that currently exist. After sorting the top 60 crypto's, my spreadsheet looked more confusing than it did when I first started. I decided to reduce the total to the top 20. At this point I was wishing I had all this data in a SQL DB so I could just write a few SQL scripts until I got it right. However, this is what I have to work with.
Which brings me to factor #3. Categories
For purposes of this article, I am going to focus on four categories. Currency, Global Software Platform, Application Token and Metaverse Coins. You might think that an Application Token and a Metaverse Coin should be in the same category, but I am betting that in time these two will find themselves in there own industries. Once again, I plugged in the new data and my spreadsheet went from "brain throbbing" to "interesting".
As you can see, the scarcity theory plays out perfectly here. The number 1 coin in ever category is the project with the smallest total supply and highest current value. This worked perfectly in every position, except Metaverse Coins. Mana seems to be out pacing ENJ even though ENJ has 1 million fewer total supply. But of course, Mana has recently went on a moon shot. I am betting that it will make a slow decent sometime around February. Congratulations to everybody who slurped up the gravy on that one. I will be getting into Mana myself if my prediction turns out to be right or not.
To summarizes my long winded thoughts here. If you are looking to invest long term, why bother listening to the cryptokid scream "it's going to blow up, it will be epic". The information is all there for the picking. (Supply and Demand) I am not a financial advisor, so do your own research.
Disclosure: The spreadsheet is using current data because I was not smart enough to save the spreadsheet that I created months ago. Results were the same with the exception of the Mana moon shot.