From my long-term investment on stcoks perspective, honest my view to cryptocurrency trade is danjerous, short-term trade, or gambling.
In particular, it worthes nothing if the coin is not used.
At the begining of investment around August 2017, I saw Bitcoin is difficult to use for it's slow speed and expensive transer cost considering free cost of transer services of Bank in Japan based on asset.
I thought only XRP could survive. But banks will utilize Ripple technolodgy, I do not have 100% confidence that XRP is really used for bank money transfer.
Howver, through my small coin analysis, functions attached to certain coins is nice and maybe utilized.
In my understaning through Satoshi Nakamoto paper, crux of Block chain is not "Block" mechanism, but free preparing of vast computer systems by paying mining fee.
Now, based on my stock selection analysis criteria for long term investment, I summarize criteria for cryptocurrency long term investment with comparison of stocks.
I've studied bubble collaption over 30 years for stock long term investment.
I've found despite of bubble collaption, there are several selected person who earned tremendously.
What I've learned as important things is;
"If I see signs of bubble collaption, run away full spead faster than anyone else."
The "full speed" means sell away between 15minutes to 30minutes, and possible have short position.
Recently within a month, there were two times of "Full spead runaway".
First time, it took time to sell all, but 2nd time, I could deal faster to sell all.
Time to sell all is about 10minutes, I believe.
I have positions in Binance and Poloniex, sell them to USDT.
Through this experience, I thought " It's tiresome..."
Since I have recoqnized cryptocurrency is just like short-term trade, so, lack of attention means looser through my experiences.
Then, I naturally think "Are there any easy way to implement?" like my long-term stock investment.
Stock Long-term investment VS Cryptocurrency Long-term investment
Cryptocurrency is not like stock. However, funds are collected by "ICO", right?
Then, people who invests wil ask return through investment.
So, it's not like currency as well.
This is economic activity as investment.
Currently, I've not heard coins are used for real services and people buy coins to have services, like google searh tasks, or Amazon shopping.
It is said that BITCOIN is used for shopping at some place but this is not attractive for me. Credit card is better to handle.
In addition, bitcoin is fructuated lot and if I use Bitcoin for shopping, then tax calculatin is necessary to every time for the end of year tax report.
I now think "Are there any methods considered as long term invesement?".
So, I will compare methods taken for stock long term investment.
This is based on Wallen Buffet insights. If I utilized this way, investment results were good. But not, result is poor or minus.
Most important key is "Selection of stock". One stock from screened 20 stocks by analysis.
For cryptocurrency, "Selection of coin".
According to Buffet, it the stock has value and appropriate, the purchace of stock is irelevant to market big fall or big rise.
Let's compare one by one!
The following three are criteria.
2.Have long term strong competitiveness
3.Reliable management team
What do you think about this?
This is all applicable to cryptocurrency.
Did you check coin is understandable business utilization?
Didn't you buy coin that you could not understand fully?
Truly, it's me^^LoL
I try to understand but most coins are difficult to understand^^
What I understand right now is the followings;
This is just possibility.
- BTC is base coin. It will be bought when alternative coin is purchased. Therefore, basically, buy and not sell, means continuous price up. (However, if strong rival come, then different story.)
- XRP is valuable as cross country money exchange. What is good is controlled by Ripple. I pay wrong rate to buy foreing stock, but if XRP is used I welcome rate and fee becomes better.
- BNB, as binance token, will be continuously bought. Since security, management team experience and smartphone application are so nice. BNB is used for transaction fee at 50% discount. So Binance user will buy BNB and not sell.
There are other coins, for example, benefitial for XXX. But I could not understand contents and could not image utilization.
Including myself, people trade by rumor.
This feeling brings me, "This trade style will be looser in future.."
Therefore, if the price goes down, I escape full speed.
It's based on chart and news, so I am a little bit tired of ths trade style as long term investor.
2. Long term competitiveness is having superior attribute by some uniqueness or originality to win rival long term.
Is this coin monopoly market? Therefore, rival analysis is mandatory.
It's best that there is no rival. But cryptocurrency is program, therefore, rival can be appeared in future.
3. Relaiable management team is also important.
Job history, graduated university (Master or Ph.D.) and what top management expressed is really important.
And is it easy to understand?
Long term competitiveness are from three number checks
- Continuous profit increase
In case of stock, it's listed with sales and profit records. However, cryptocurrency may not used for real services. In this case, future forecast of number should be disclosed. Annual return with backgound data is mandatory. If coin is utilized more and more, and more people need to buy to have the coin's service, then the coin price will go up.
There number shold be summarized as quater basis, and plan VS real result must be disclosed. Then, investor can understand easier.
- Ratio of total debt to benefit.
This is company PL and B/S matter. If this is required, this number shold be checked to companay who develops and services of coins. We can measure such company is healthy condition or not.
- Gross profit margin
By coin's utilization, how much money the complan earn, and what is gross profit. More than 40% is guidline. If this value is too bad, then service of this coin will disapper.
Above 2 and 3 is not for coin but for operations body (Company) that develops and services the coin. It's better to check.
Surprisingly, Buffet way approach can be applicable to cryptocurrency as well, though Buffet does not like cryptocurrency.
However, he could not understand value of apple and amazon.
As far as I know, there are no coin company that disclose these thing.
Whitepaper are too immature. Only technolodgy explantaion is not good.
For bitcoin case, there is no company but there is community. This community needs to address these things for users.
If these information is disclosed, then I believe more sound market will be develped.
In future, I would like to talk about specific ICO.