Wow, sector(crypto) rotation is finally happening

Discussion in 'Crypto Assets' started by Pekelo, May 4, 2021.

  1. Pekelo

    Pekelo

    When I first learnt about cryptos as a new technology (not as a get rich quick scheme), I naively thought, may the best coin win, and the technologically most advanced coin would draw the most users, thus eventually the price. Boy, was I wrong.

    For example I always liked Litecoin, because just with a little change of the original code, it made the transfer of value much quicker and cheaper. No need of such an incredible stupid invention as the Lightning Network. Hell, Bitcoin Cash was a huge improvement but couldn't come out of the shadow of BTC. Other coins came along with actual features what Bitcoin originally claimed (like true privacy, very cheap tx cost, etc) yet they didn't really get adopted and price-wise, they always just followed BTC, but seldom took over.

    Looked like the first mover's advantage was just too big to overcome. This has been changing recently. Finally looks like there is a crypto rotation and coins with advanced features are recognized and relatively valued much better than the grand daddy of obsolence. The current raise of ETH is the best example, and I hope the trend continues and these coins leave the obsolete shit aka bitcoin in the dust.

    This year's YTD returns:

    BTC: 86%

    ETH: 334%

    Cardano: 294%

    LTC: 134%

    BCH: 172%

    NEO: 587%

    etc.etc. Oh yeah:

    Doge: 11,210%

    Why is a crypto rotation bad for Bitcoin? Obviously the incoming money is not going to BTC only, but pushing up other coins, thus leaving BTC with much less capital. The Doge example is a funny one, because Doge has no advanced features over BTC whatsoever (well, tx cost is still low) yet it outperformed it in the store of value race many times over....

    "So we have reached the point where a coin gets its justification for existence and seriousness only by rising in value and being hyped. Or, to put it in other words, something that is extremely increasing in value loses its joke character just because of this fast increase. It doesn't matter what's behind it, whether it's useful or not. The only usefulness is the increase in value. More precisely, the only usefulness is that it is the pivotal element of a pyramid scheme."
     
  2. NoahA

    NoahA

    It is absolutely incredible to see how weak BTC is right now compared to ETH. When gold was dropping and BTC was going up, people said it was a rotation out of gold and into BTC. So is it really the case that so many people are ready to jump ship from BTC into the next moving coin? It just doesn't seem to bode well for the fundamental narrative as a store of value. Heck, GME has been a fairly good store of value for the past few months as well.

    At 54k, BTC is still 15% off its high from 20 day ago while ETH is up about 60% in that time. And although 20% drops are quite common, with the frenzy heating up in the crypto space and competition amongst coins, I feel the whole narrative for crypto is getting hazy.
     
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  3. Pekelo

    Pekelo

    I think one generally negative effect in the long run is the HF industry moving into BTC. Institutional holding makes BTC just another stock, and when the market is going down, BTC is going high beta 2-3 times more. On the other hand other cryptos can stay unaffected and even go up.
     
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  4. johnarb

    johnarb

    I hope you're making a lot of profit$ on GME, ETH, and DOGE Pekelo
     
  5. krugman25

    krugman25 Guest

    I'm not a Bitcoin fan by any means but these sector rotations happen on a regular basis. It's typically Bitcoin->ETH->DeFi/alts and back to Bitcoin again. We just happen to be in the ETH part of the rotation right now and once the markets had its fill it will probably rotate back into the laggards. Sure, in the long run ETH may pick up some gains over BTC (higher lows), but in the short term we'll eventually see BTC outperform ETH and other alts once again.

    Choosing YTD and picking coins that started from vastly different market caps makes for a dubious comparison. First, some of these tokens had their rotation cycle just before the end of the year and some just after, so moving +/- a month or two drastically changes performance numbers. Also, market cap matters. I can show you coins that you've never heard of that are up 50,000% in a single week. It seems crazy until you find out they started with a market cap of $100. The bigger a MC gets the lower the forward returns. For as great as ETH is doing, it's never going to match its own 2015-2017 performance as its MC is just too large at this point and it takes a lot more money to move the same %. That's why risk adjusted returns over a longer time period is the better way to compare.

    Long story short, Bitcoin isn't going anywhere. Capital is rotating out of it and will eventually rotate back in. It's going to give lower returns than coins with 1/10th, 1/100th, or 1/1000th of its market cap for really obvious reasons. Once ETH hits a few trillion it's going to be the same story of lower returns vs micro/small cap tokens. If Bitcoins performance has been trash than every non-crypto investment is on life support because nothing in the traditional world has come close to Bitcoins returns since the covid crash baring a few handpicked stocks. Any Bitcoiner has outperformed 99% of the nocoiners on this website including the OP, and probably by an order magnitude.
     
  6. johnarb

    johnarb

    Don't tell the OP about CUMMIES :D
     
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  7. krugman25

    krugman25 Guest

    Oof, lol.
     
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  8. SunTrader

    SunTrader

    redditMan doesn't have a pot to piss in.

    Just an internet connection. Most likely at the local library.
     
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  9. Pekelo

    Pekelo

    1. YTD was the easiest to look up, and it is a recent but fairly long time frame. None of the coins picked are new invention. Also, why would we care if a coin went up big a year ago? We are looking for the new new thing.

    2. Again, all the coins are listed are at least 5 years old. So stop making invalid BS points. I mean I get it, you are a cultist but can we have just a little logic here? I didn't pick any of the flavor of the week coin.

    3. If you have the time, go ahead. How do you measure risk?

    4. Nothing you said makes me believe that. BTC is the only one with heavy institutional holding. As I mentioned in my 2nd post, it is more of a hiddrance than a good thing. Just today BTC went down with the market while Doge went hugely up.

    5. Apples to oranges. We are comparing crypto to crypto. Pretty simple.

    You are welcome.
     
    Last edited: May 4, 2021
  10. easymon1

    easymon1

    What would you say are some of your past successes in this persuit?
     
    #10     May 4, 2021
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