Revenge of the Nerds
Is the market changing its mind on crypto utility coins?
Last summer I said to someone with a casual interest in crypto that frogs and dogs are usually your winners in crypto.
What did I mean?
Something I observed about the crypto market is that utility isn’t really valued by the market. While cryptocurrencies such as Algorand, HBAR, Cardano, SUI Network etc seem to have actual real world utility and projects being built on them, the market seems to be rewarding memecoins like Dog Wif Hat, PEPE and Dogecoin.
While I think that’s crazy, the market is what it is, not what you want it to be. When I put together my portfolio for the bull run, I planned accordingly. HBAR was included, but so was Solana, despite the fact that I don’t think too much of it as an actual blockchain.
It played out that way for awhile, and my best performers were not the coins I would look to when I wanted to do something on the blockchain.
But this past month, all that has changed.
Revenge of the Utility Coins
I recently tweeted out a GIF of a scene from Revenge of the Nerds, referring to the utility coins having a moment. Finally the adults in the room were rocking it. (Someone said they ought to make a movie of that, so I responded that I had their night’s viewing set - because yes, it is a series of movies from the 80s).
For context, as of this writing, here are the one-month gains for XRP, HBAR and ALGO:
XRP: 415%+
HBAR: 700%+
ALGO: 414% +
That mean $1,000 invested into Algorand one month ago is now worth $5,140.
What does this mean?
A number of people have been asking why this sudden change. I think anyone that’s 100% sure about this is wrong.
Because the truth is, it’s hard to say.
Trump’s pro-crypto signaling has been a boon to the market overall. And with SEC Chair Gary Gensler’s departure, coins that were targeted by the SEC including XRP and to some degree Algorand might have benefited.
Algorand adding staking rewards for running nodes is a big deal too. The lack of incentives led to far fewer people running nodes than the Algorand Foundation expected. I’m more skeptical of these ready explanations, however. Many of Algorand’s qualities were clear before this pump.
The most likely explanation is that crypto tends to run out of control when it runs during the bull period. Price action attracts people to a coin.
You and I know the best time to buy any of these projects, and crypto in general, is during the bear market when the only thing you see in mainstream media about crypto is that it’s dead. (But at this point, not understanding the four-year crypto cycle seems almost deliberate.)
For those of us who built our portfolios during the bear market, it’s our time. Let’s enjoy it. And be thankful there is a market that seems to value utility coins again.
Be sure to check out
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Want to maximize your safety in crypto? Check out Ledger:
Non-Fungible Domains: Turn your long complicated wallet address into an easy to remember .algo address for a one-time, affordable fee.
MARCUS: Follow the memecoin and NFT project based on Marcus Aurellius (in this case, Marcus Furrellius) built on the Algorand blockchain.