I don’t even know what to do with crypto anymore. I wait for the price to go down, then I buy some, thinking it’s the bottom. Then it just goes down even more. So if you’re down and you don’t want to look at your portfolio anymore, don’t worry because it’s not just you. It’s me too and probably everyone else, but I think one thing that keeps me going is remembering that the biggest transfers, meaning the most billionaires, are made during bear markets. The reason is because during these times, people are irrational and make irrational decisions and sell when things are falling, but it’s the buyers on the other side. There are people that come in and buy these investments for dirt cheap that come out on top. That’s who I want to be the person that comes out on top, and I want you to be the person on top too, obviously?
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So without further ado, I’m going to be going over my top three crypto picks that you should be considering for the month of July. If we didn’t talk about the markets for a second, in all honesty, it’s probably just going to be a quick second because there’s nothing new to say. Everything is just boring right now. A lot of people have just turned a blind eye to crypto as it keeps getting beat over the head every week with new lows, but what market psychology tells us is that this is actually not a bad thing but a really good thing because if you invest right now you’re getting in during a bear market.
Let me repeat myself for those in the back. You’re getting into a bear market. You should be excited because you’re getting in at prices people wish they got in just a couple months ago. If you think about it, I guarantee you you’re telling yourself when the market was hot, “I wish I had gotten in at those low prices.” Well, you’re at those low prices right now.
Even though the prices are lower, the biggest question on everyone’s mind right now is whether crypto will continue to fall. And personally, I think it will, and that’s not stopping me from buying right now. It shouldn’t stop you from buying either. I’m confident that we’re buying at the lower end of the cycle. Obviously, no one can predict the bottom of the market, but the only thing you can do is try to get really close to it. When we’re looking at something like bitcoin, which is at around $69,000 at its all-time high and it’s right now at about $20,000, I think it’s pretty clear that we’re closer to the bottom of the range than the top. I’m not too worried about timing the market because, remember, it’s always time in the market, not timing the market.
All right, that’s enough for the intro. Let’s get into these top three coins. The coins I’ll be talking about today won’t be the usual hidden gems, but they will be more of the classic coins that everyone probably already owns and knows about, and this is because these coins have stood the test of time and have proved they can survive a crypto winter. Yes, there are a ton of new interesting projects out there right now that we can all be a part of, but they haven’t experienced the markets that we’re witnessing today. That’s why experience plays an enormous role in the environment that we’re in today. That’s also why these three coins I’ll be talking about are set up to succeed because they have this experience.
All right, so first we have Binance. I’m assuming you guys already have this in your portfolio, or if you don’t, you’ve at least most likely heard of it. But for those of you that didn’t know, Binance is the largest crypto exchange in the world for crypto trading that got banned in 2019, so that’s why we see Binance.US, if you use them in the states.
Nonetheless, Binance has been really active in this bear market and I really like the things they’re doing. So allow me to explain. At the time of writing, Binance is currently at around $230. Being the big player that they are, they made $20 billion last year, which would put them at rank 175 on the Fortune 500 list, right behind Carmax.
They’re taking full advantage of this by investing the reserve capital that they have in companies that have fallen a lot during this bear market. While Binance is pretty much picking up these companies for dirt cheap, and while this might sound bad, it’s actually a win-win for both parties. The companies they’re investing in were probably going to die, and we’re on the brink of bankruptcy anyway, so not only does Binance get a great share of a company at a very low cost, but they also keep the company from dying. Nothing can get better than that.
Binance is also making some huge moves against big exchanges like Coinbase. In 2019, Binance started with 250 000 bitcoin in their cold storage wallet, and in the past three years, they’ve been able to accumulate around 600 000 bitcoin. On the other hand, in 2019, Coinbase had about 1 million bitcoin in their reserve, which is four times larger than in Binance. Over the past three years, it’s fallen to just about 500 000, which just goes to show how users are moving towards Binance for the benefits and features that they offer. This doesn’t even take into account Binance copy trading volume.
So as to put into perspective just how much trading volume they have compared to other exchanges. If you were to combine Coinbase’s two coins and FTX’s 24 hour trading volume, it would be around $4.45 billion dollars. Binance is at %11 billion, so 2.5 times more than the three other largest exchanges out there, which is insane to think about.
Also, if we look at Binance back in 2017 and 2018, we’ll see that it went down a little with the market. And then it recovered really nicely, and the reason is that Binance is a middleman company.
A great way to compare this is to the gold rush that America had back in the 1800s, where it was the people who sold the shovels that made all the money, not the people who moved across the country to search for it. And I think this is exactly what we’re looking at with Binance. They’re making a lot of money whichever way the crypto market goes because they’re the middlemen. Whether you want to buy or sell, you have to go to Binance. You can’t go anywhere else. So while everyone else is running around and scrambling to keep their lights on in the crypto market, Binance is just chilling and that’s why I’m very confident they’ll do really well in the future.
Next up is Ethereum, which is probably a coin that we all own at this point. When we look at Ethereum back in 2017 and 2018, you can see that it fell hard from $1,400 all the way down to $85, but then it came all the way back to its all-time high of about $4,900.
This is what I mean when I say invest in coins that have gone through these horrible crashes because you know they’ll always come back. If you are absolutely crushed with bitcoin, Ethereum was completely destroyed in 2018 and lost more than 90% of its value. But it still managed to come back and make some insane gains. That’s what we’re going for here and I think Ethereum will do exactly that again.
The price of Ethereum is sitting just above a thousand dollars right now, and recently it was in the news for successfully merging its first test net to a proof of stake model. Which is basically just a test run for the new proof-of-stake model, but the real and final one in the main net is supposed to be happening around sometime in August, but the chances are that’s going to be delayed as well, because it’s been delayed a couple times already. But the specific test merge that we just saw is very important because it’s the closest in terms of replica to the final pour into Ethereum as well.
The reason why all this money is going to flow in is because of this update. There won’t be any need for miners anymore, which is very bad for the environment. For fear of tarnishing their reputation, many individuals and large corporations were hesitant to invest in Ethereum. When the merge happens and we finally go to ETH 2.0, all those miners will go offline and they won’t be needed anymore. This will now allow companies to justify investing in ETH because it’s more socially accepted now.
The second reason is that staking rewards are said to increase a lot with this merge. Right now, you can get around 3 to 5% when staking with the theorem. When this merge happens, we’re looking at double digit returns of close to 10% for just taking your Ethereum. With those returns, I can almost guarantee a lot of people are going to be moving over to Ethereum just so they can get that fat staking reward and make that passive income.
The best part of all this is that with all this increased demand we’re going to see, we’re also going to see a decreased supply because when this merge happens, Ethereum is going to cut its issuance rate by 90% to become a deflationary coin. Currently, Ethereum is inflationary, meaning there is more ETH being issued every day than being burned, but with this merge we’ll see it turn into a deflationary coin, meaning more ETH will be burned than issued.
If we dig deep into what we learned in economics class, if demand is increasing and supply is decreasing, the price only has one direction to go and that is up, which is why I’m super bullish on Ethereum and the merger that is set to happen later this year, hopefully.
Coin 3 (risky)
And lastly, we have Cardano or ADA. I know Cardano gets a bad rep, but let’s face it, it’s been here since 2017, so it gets the OG status from me. It got to experience the crazy crash of 2018 and it also got to experience the huge run-up that we saw last year, going all the way up to $3.10.
Now there’s a lot of people out there that hate on Cardano for not hitting ten dollars because there was a lot of news around it a couple months ago, but frankly, you shouldn’t be listening to those people because they’re just short-term gamblers trying to make a quick buck in crypto currency.
On the other hand, crypto is an asset class that we should believe in for the long term, and yes, projects are going to have their ups and downs, that’s just the way the market works, and we have to acknowledge that.
Some really exciting news for Cardano is that it just had a successful test net fork update that’s going to allow new types of smart contract applications on the blockchain. So think of useful dApps like lending protocols and new protocols that need data, those types of dApps are now going to be able to be built on the platform. This is going to add a lot more value to the Cardano blockchain since this was a test run and it went really well. In about a month, Cardano is set to launch their mainnet, which means the final version will allow these features to flow into their blockchain. This new fork also claims to fix a lot of bugs and allow a more user-friendly experience when developers are building depth, so hopefully it will bring a lot more adoption to the platform as well.
For how many people talk bad about Cardano, what many people don’t know is that it’s the most actively developed project in the crypto bot trading industry. By this, I mean they have the most commits, which basically means how many developers are helping fix and improve the blockchain. Since Cardano is open source, developers can fix or enhance the code, and then the community can vote to implement these changes or not. Cardano has been crushing it. Last month, the community had 350 commits while projects like Ethereum and Solana only had about 270. To me this was pretty surprising because they had the most in 2021 and no one was talking about that.
If we also look at Cardano’s insights we can see that the community is thriving wallet voting is increasing year over year. There’s also more votes being casted every single year. There’s just a lot of good stuff going for Cardano that a lot of people aren’t talking about.
These were my top three coins: Binance, Ethereum and Cardano. Like I said, you don’t always have to buy a coin. No one knows about to make substantial money. You can make great gains by investing in coins that have proven themselves during the hard times, because that’s exactly what I’m doing right now, but like I said, these were my top picks for the month of July. As always, do your own research before you invest, because this is not financial advice.
[This article is a transcription of a video made by FaaresQ]
Original video: https://youtu.be/ixXIifB_Bks]