The other day I wrote an article about how I liked Litecoin for 2018 as far as a larger cap coin to play the currency angle instead of investing in platforms and other blockchain products. I want to keep going with that idea with my current three picks for the best currency coins, and what would make nice portfolio picks if you are looking to be weighted heavily on currency.
I am picking XMR, LTC, and NANO. The Nano pick may be seem strange after reading my other article on LTC, but after reading the reasoning, it will make sense how it fits into the whole pick. So let’s look at each one and the reasoning behind it, as well as possible negatives.
XMR – Monero is my long term pick, which means I plan on holding this the longest and adding to my position as time goes by. The reason I like Monero long term is they have leading technology when it comes to privacy. Their team is super focused and serious on improving their product, almost to their detriment as they don’t do a lot of flashy advertising or advertising at all. But in this world of fake shills and paid shills, I appreciate that and feel safe placing my money with the Monero team.
Another aspect I like about Monero is that they are decentralized and POW. I know there is a lot of hate for POW, but so far I have not seen a fully provable and tested POS system. Also, Monero focuses on decentralization by changing their mining code every so often so chips cannot be designed specifically for it. This prevents the type of thing we have seen with Bitcoin. The concept of decentralization seems to have been lost in the last few months and people simply chase profits, but it will come back to the forefront soon as those other alt coins start to be exposed and fall away.
Next is the market for a privacy coin. There will ALWAYS be a need for private storage of money and private transactions. This is a need that will never go away. And with much of the world going cashless, such as in Switzerland where many restaurants don’t even accept cash anymore, the need for a private way to do business in a cashless world will be very important. On top of that, there is already trillions of dollars stored around the world privately and off the record. If a portion of that money starts to flow into Monero, it will be very positive for the long term price action.
LTC – Litecoin is my medium term pick. You can read my full case for Litecoin here but I will give a summary in this article as well. Many people think that LTC is a coin that doesn’t really do anything special, and that’s exactly what gives it its strength. It is a tested coin and blockchain technology, it has very low fees and fast block times. It can also scale very well. But the main thing is that LTC is tested. Many other coins like Nano promise a bright future, but they haven’t been tested long enough in the real world to be a real currency yet used by retailers.
And that brings me to the most attractive aspect of LTC and it is brand recognition. There are very few coins that have decent brand recognition and trust among retailers and processors. LTC is one of those names. Most retailers and payment processors are familiar with LTC. The only other coins that are that well known are BTC and ETH, but ETH isn’t a currency. So LTC is really the only choice here. As I explained in my previous article, other less well known coins are never going to be adopted on a large scale by retailers and payment processors for several years.
NANO – Wait, you’re probably wondering how Nano got on this list when it seems like I’m bagging on it all the time. Well, I only dislike NANO because proponents of it seem to think it’s going to take over payments in the next few weeks, and they don’t realize it takes time if you want to be an adopted currency. Retailers and processors can’t just jump on the latest coin and base a business around it. For that reason, I like NANO in the short term, as I think it has lot of promise and may prove itself to be legitimate. However, it can also fail to deliver or other coins can come and take the hype away since NANO has zero network effect at the moment since it’s retail use is basically zero at this point.
So that’s why NANO is my short term choice, as I see it possibly gaining. It could become a long term pick if it continues to evolve and show promise. So for that reason, I find it a good compliment to a currency based portfolio at this time. However, it is one to watch closely as you may want to take profits if the situation changes and this is what makes it my short term pick.
Of course, all of these picks have some negatives and I always like to highlight those as well so my readers can have the full story.
First off we look at XMR. The negatives for this is mostly regulatory. If governments crack down on privacy coins due to money laundering and illegal usage, it could be a problem. Although XMR is truly decentralized, outlawing its use could be a blow to the price. However, usually when something is banned, it means there is a good demand for it, so this may make the coin more valuable. It’s impossible to tell how things would play out, but either way it would introduce volatility.
Next we look at LTC. LTC doesn’t really have any glaring negatives that could harm it other than competition, which at this point I only see BCH as a direct threat to Litecoin. Other than that is the issue with Charlie Lee, the leader of the project no longer owning any LTC. He still seems very active in developing the project, but if he loses interest, it could be damaging to the value of the brand.
And finally we look at NANO. NANO has the same issues as any new coin. It could fizzle out as the progress doesn’t move along as promised. It could turn out some of the features are not as good as promised. It could prove to be insecure, and finally some other coin could come and and have better features. Overall, it’s a pretty standard new coin full of promise and hype and has all the same negatives. In other words, it’s a long shot at the current price.
But overall, if you are looking to play the currency angle when it comes to crypto, then I would look into these coins to hold. This is what I am contemplating at the moment and I think it will be the smartest move as we get to the end of the year. Of course, you would round out this with BTC in your portfolio as well, I left that out as it seems very obvious when talking about currency coins.
Also one other note, this strategy goes along with my overal market strategy that alts will start to fade away towards the end of the year and the larger coins will start to attract more institutional money. For more on that you can read this article.
As always, please do your own research and come to your own conclusions when it comes to picking out investments. But I hope this gives you something to think about when it comes to adjusting your portfolio and planning for market shifts in 2018.