It has been sometime since Momentum Works covered crypto, but do not be mistaken, we have been watching this space very closely. To date, many things we spoke about have come true. For example: Venezuela has launched their state-backed cryptocurrency, the “Petro”. We first wrote about it in Part 1 of the Crypto Review.

In most recent times, Telegram’s ICO through private placements only have raised a mouth-dropping US$800 million, and plans to raise another round with the similar amount. Although cumulative crypto trading volumes have dropped from peak of about US$50 billion (December 2017) to about US$15 billion today, ICOs are still hugely popular.

Investors clamouring for a piece of the Telegram ICO (Source: QZ)

Then there is bitcoin – from a high of almost US$20,000 per bitcoin, it has since then hit a low of US$6,000, and now hovering around US$12,000. Many pundits have openly called out that it is all over for bitcoin. That is understandable, but the same people were also saying bitcoin could go to US$100,000 just 2 months ago. What is Momentum Work’s assessment?

 

Action swings to bitcoin and then to alternate coins, then back

Trading activity (as we write) obviously is in bitcoin right now, with total market capitalization and total trading volume above 40% of the total crypto market. We do not label ourselves as experts on Linkedin, but having watched the markets since 2012, we can say that the trend swings from right to left, to right. If your alternate coins are down now, you might want to hold on tight to it. However, there is no telling how low it will go. So please buy/hold/sell according to your risk appetite.

 

Patience

We know many people who suffer from overtrading. Between you and us, we all probably have a friend who endlessly refresh their trading app, hoping the prices would go up. Whether your coin’s price is moving sideways, up or down, it doesn’t really matter in the short run. It is a known fact that day traders flush out and lose all their capital almost any other day, as compared to a tortoise investor, who takes his/her time.

 

Avoid buying coins during ICO, shop on fundamentals

Above all, shopping for coins based on fundamentals are the best weapons against losing money. That is right, notice we say “against losing money”. That should be the first priority when investing, instead of dreaming you could own a Ferrari one day. Therefore, it is wise to observe the following fundamentals:

i) Price

Prices are frenzy when it comes to ICO, as they are more often (not everyone does it) priced higher to maximise gains for the company pulling an ICO. So be sure to shop for fairly priced ICOs.

Purchase of any crypto asset should be made only after careful chart studying. This means avoiding first day trading of tokens and all-time highs (if the token has been traded in the markets for sometime). Buying in early during an ICO might be wise as you do not have to chase the price. (However bear in mind there’s always risk).

ii) Function

Understanding your crypto’s functions will go a long way in helping you find an investable crypto. Take for example, BitConnect (which went down as a Ponzi scheme), it took money from you and promised to pay back more. One simply needs to question – is this sustainable?

iii) Roadmap

Once you have ironed out that your crypto fits your criteria in terms of price and function – time to look seriously into the roadmap. If there is a clear roadmap (see Qash), and the company has been hitting all the milestones, then it is a good sign.

iv) Team

It always sets the record straight when there is a good team, in addition to a group of trusted advisors in a relatable industry. This is usually a good sign.

 

Conclusion

The crypto investing market still has a lot of maturing to do, as investors shift from investing based on news, to basing their judgments on fundamentals. If you have not already been doing this, you may want to keep track of latest news about your crypto assets through Twitter and Reddit (the two most common communication channels).

Our final take is: during the time of mass fear, perhaps the best action is to collect more. Again, we are not investment advisors.

 

Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at hello@mworks.asia.

 

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He has worn many hats in the past - selling advertising space, banking services, and even trading stocks. In 2013, longing for a change of scenery, he joined Rocket Internet’s (now Alibaba’s) Lazada as a online marketer in Bangkok, where he experienced first hand life in a startup. He never looked back since - landing lead roles at Rocket’s EasyTaxi (Singapore), Rocket’s MEIG (Dubai), and Bamilo (Tehran). After that, he launched (and ran) the Thai venture for one of Singapore’s biggest cross-border ecommerce. Last year, Chong put his expertise to work, helping an SGX-listed company relocate to and run operations in Thailand. Nowadays, he’s just chilling by the countryside.