This text is excerpted from Tom Yeung’s Moonshot Investor publication. To be sure to don’t miss any of Tom’s potential 100x picks, subscribe to his mailing record right here.
Elon Musk Joins Twitter’s Board. What’s Subsequent?
On Monday, Tesla (NASDAQ:TSLA) CEO Elon Musk revealed he had taken a 9.2% stake in Twitter.
This was no mistimed April Idiot’s joke.
As a substitute, it was a deliberate transfer by one among Twitter’s most outstanding customers to realize better sway over the platform. And he obtained exactly what he needed.
“I’m excited to share that we’re appointing @elonmusk to our board,” Twitter CEO Parag Agrawal tweeted the next day after shares jumped 22%. “He’s each a passionate believer and intense critic of the service which is precisely what we want on @Twitter, and within the boardroom, to make us stronger within the long-term.”
In the meantime, shares of different social media corporations would additionally rise. Meta Platforms (NASDAQ:FB) added 5% to its share worth, whereas Snap (NYSE:SNAP) would pop 6%.
Maybe punters are proper to imagine Jeff Bezos will now purchase a rival social media platform out of jealousy.
However I wouldn’t maintain my breath. As a substitute, I’d sooner wager on the one factor we already know Mr. Musk enjoys:
Thumbing his nostril on the SEC by selling Dogecoin (DOGE-USD).
Supply: Catalyst Labs / Shutterstock.com
The High Doge of the Meme Coin Pack
First, let’s be clear.
Dogecoin has zero basic worth.
Very like advantageous artwork… collectible stamps… and even the U.S. greenback… Dogecoin solely has worth as a result of others consider it to be so.
That doesn’t imply these belongings are nugatory.
Removed from it.
{Dollars} are used to lubricate commerce and retailer worth — important parts for any well-functioning economic system. Wonderful artwork and collectibles convey pleasure to the world (and the occasional pang of envy).
In fact, the second the market collectively believes the belongings are nugatory, these belongings can shortly go to zero. Anybody who has studied the historical past of the German Mark or the Zimbabwe Greenback will know these currencies have been as soon as so devalued folks used them as wallpaper.
However cryptocurrency and NFTs have pushed the non-fundamental reality of those belongings to its breaking level. In the present day, there are 2.2 million token contracts on the Binance chain alone. When it prices nearly nothing to mint a brand new coin or NFT, you possibly can make sure that enterprising people — and unscrupulous scammers — will create as a lot provide because the market permits.
Rising from the Crypto Graveyard
The nearly limitless provide of recent cryptos has created an unlimited graveyard of defunct could-have-beens. Solely 380 of the two.2 million tokens out there on the Binance Good Chain have any significant market capitalization, in line with monitoring web site BscScan. You have got higher odds of successful the Day by day 4 lottery than randomly selecting a token of worth.
And that’s why the Moonshot Investor not often recommends any meme cash. Although you may sometimes rating a 100x dwelling run, you continue to find yourself behind should you had to purchase 9,999 different cash that went to zero.
Nevertheless, some bets appear to carry out nicely, regardless of having little real-world use.
And Dogecoin suits that invoice.
The Subsequent Dogecoin Breakout?
Once I first gave Dogecoin a 5-star evaluation in early 2021, the 2-cent coin had already imprinted itself on buyers’ minds. The coin was initially launched in 2013 when obstacles to entry have been nonetheless excessive and joke funding decisions have been restricted.
That gave Dogecoin an virtually unbeatable head begin within the meme coin world. Should you’re making an attempt to drum up consideration for a speculative asset, it helps to have Garlicoin (GRLC-USD) as your solely competitors.
In the present day, Dogecoin continues to profit from its legacy, regardless of having no technological profit over Litecoin (LTC-USD). Celebrities from Elon Musk to Mark Cuban have touted the coin because the “strongest” crypto in existence. And in August, Ethereum (ETH-USD) co-founder Vitalik Buterin joined the Dogecoin Basis board, vowing to convey Proof of Stake (PoS) performance to the legacy blockchain.
From a buying and selling perspective, the coin can be surprisingly straightforward to purchase. The coin is obtainable on Robinhood, a platform that’s remained widespread with millennial buyers.
And now that one among Dogecoin’s largest movie star followers has joined Twitter’s board, any well-timed tweet by Mr. Musk might ship Dogecoin rocketing out of its slender buying and selling vary.
Alt-Doge
Traders searching for riskier bets have a variety of different choices. Small-cap cryptos… NFTs… to not point out the two,199,692 Binance tokens with zero worth.
However selecting something midway first rate is more durable than it appears. Shiba Inu (SHIB-USD) was solely one among many Ethereum-based tokens that gifted 50% of itself to Vitalik Buterin as a prank. The remainder at the moment are footnotes in crypto historical past. And social media can create such a loud echo chamber that it usually turns into tough to separate the reality from the hype.
There are some potential winners that stand out. Immutable X (IMX-USD) and Hedera Hashgraph (HBAR-USD) have robust company backing, whereas Solana’s (SOL-USD) third-generation expertise places it forward of rivals.
In the present day, I’m including a riskier wager to the record: Sologenic (SOLO-USD), a decentralized change and NFT market on the XRP (XRP-USD) community.
The explanations to purchase Sologenic are easy:
- Deflationary. The coin burns 0.01% of every transaction, a determine sufficiently small to keep up well-functioning markets however massive sufficient to make a distinction in its provide.
- Helpful. SOLO focuses on fixing a number of the real-world points confronted by XRP consumers, together with asset tokenization, knowledge storage and stablecoins.
- Low Competitors. In contrast to Polygon (MATIC-USD) and different cash combating for a slice of the Ethereum pie, SOLO faces far much less competitors within the XRP universe.
- Momentum. SOLO jumped 70% this week on hypothesis round its decentralized NFT market.
Sologenic can be an implicit wager on the way forward for XRP, a cryptocurrency at the moment sitting squarely within the SEC’s crosshairs. A authorized win for XRP guardian Ripple Labs — a not-unlikely chance — will ship SOLO hovering.
The speculative coin does bear some main funding dangers. SOLO’s concentrate on XRP offers it outsized regulatory danger. And it’s nonetheless a relative newcomer with NFTs; cross-chain NFT transfers have safety problems with their very own.
However for these trying to take a flyer, it’s nonetheless a much better wager than the hundreds of alternate options vying for a spot on Moonshot’s “purchase” record.
Dogecoin: Some Endurance Required
Pity the investor who purchased Dogecoin in 2014. Two years on, the coin had misplaced 80% of its worth because the novelty wore off. The same phenomenon occurred in 2017…
…after which once more in 2018 when the coin dropped an identical quantity.
Every time, Dogecoin would mount a surprising comeback, rewarding buyers with even-greater positive factors.
However that course of usually took years. Anybody who purchased in 2018 would have wanted to remain invested till 2021 to interrupt even.
Meaning most Dogecoin buyers by no means see outsized returns. Even now, your entire market cap of DOGE adjustments fingers as soon as each 5 days, 30 instances sooner than for shares like Apple (NASDAQ:AAPL).
Some will discover that thrilling. Momentum Grasp gives a successful technique for these trying to commerce each a number of days. And Elon Musk’s Twitter announcement units Dogecoin up for some short-term positive factors.
However for these trying to purchase and maintain, it’s a trip finest loved along with your eyes closed. In an asset class the place 80% losses are the norm, it usually appears as if buyers who quickly lose their pockets passwords have the very best probability of weathering the storm.
P.S. Do you wish to hear extra about cryptocurrencies? Penny shares? Choices? Depart me a word at moonshots@investorplace.com or join with me on LinkedIn and let me know what you’d wish to see.
FREE REPORT: 17 Reddit Penny Shares to Purchase Now
Thomas Yeung is an knowledgeable relating to discovering fast-paced development alternatives on Reddit. He advisable Dogecoin earlier than it skyrocketed over 8,000%, Ripple earlier than it flew up greater than 480% and Cardano earlier than it soared 460%. Now, in a brand new report, he’s naming 17 of his favourite Reddit penny shares. Declare your FREE COPY right here!
On the date of publication, Tom Yeung didn’t have (both instantly or not directly) any positions within the securities talked about on this article.
Tom Yeung, CFA, is a registered funding advisor on a mission to convey simplicity to the world of investing.
