Category Archives: Finance

7 Cryptocurrencies Under $2 That Could Be The Next Bitcoin

By Mark R. Hake, CFA May 10, 2021

Bitcoin (CCC:BTC-USD) has moved up so far, so fast that anyone starting to invest in cryptocurrencies is more or less forced to look at alternative plays. As of Friday May 7, BTC-USD was trading at $57,732, up 99.3% from $28,972 on Dec. 31, 2020. Many investors are considering other cryptocurrencies that might offer better upside and a cheaper absolute price.

This article discusses 7 of the top 20 largest cryptocurrencies to consider investing in beyond Bitcoin and Ethereum (CCC:ETH-USD), the second-largest cryptocurrency. ETH-USD was at $3,535 as of Friday, May 7, and is up 384% from $730.37 as of Dec. 31, 2021.

We’ll look for altcoins that have lower absolute prices than these top two cryptocurrencies. These alternative picks might provide the same meteoric upside both Bitcoin and Ethereum have had over their lifespan.

Each of these cryptocurrencies trades below $2. That means for $2,000 you can buy up to 1,000 coins or tokens. So if they ever trade above $100, like Litecoin (CCC:LTC-USD), currently at $351, or Filecoin (CCC:FIL-USD), at $150.67, investors can make a lot of money.

  • Dogecoin (CCC:DOGE-USD)
  • Ripple (CCC:XRP-USD)
  • Cardano (CCC:ADA-USD)
  • VeChain (CCC:VET-USD)
  • Stellar Lumens (CCC:XLM-USD)
  • Tron (CCC:TRX-USD)
  • BitTorrent (CCC:BTT-USD)

Let’s dive in and look at these cryptocurrencies

Dogecoin (DOGE-USD)

Price: $0.4574

Market Capitalization: $59.3 billion

Dogecoin was originally created as a joke to mimic the rise of Bitcoin, but it has since taken on a life of its own. I wrote about its phenomenal rise recently in InvestorPlace, and about those saying the joke is over.

Moreover, Dogecoin has a slightly inflationary token supply structure. This is because the token issues just 5 billion new Dogecoin each year. With a present total of 128 billion Dogecoin, that means the average annual increase is 3.90%. But each year this percentage increase declines as the base denominator rises.

This token supply structure may actually make Dogecoin a useful cryptocurrency for payments in the real economy, as I wrote in my Feb. 8 article. The reason is that economies need a slight bit of inflation, which helps account for both the velocity of spending as well as price increases.

It also discourages people from hoarding the currency, even though it rises in value. Since most large economies grow at an average clip of 3% or better over the long run, the greater-than-3% growth in cryptocurrency supply helps accommodate this growth.

Therefore, look for Dogecoin to take on more than just a cult following over the next year or so. I suspect it has a good chance of crossing $100 billion in market value, making it the third-largest cryptocurrency after Ethereum.

For example, if it were to hit $1 per Dogecoin, it would have risen nearly 120% from current prices, giving it a market cap just under $130 billion. That’s still a far cry from Ethereum’s $409 billion market valuation. So there seems to be an upward limit to how high this coin could fly.

Both Robinhood and Webull offer the ability to buy Dogecoin. I suspect that this has also played a huge part in Dogecoin’s rise. However, you still cannot do so on Coinbase (NASDAQ:COIN).

Ripple (XRP-USD)

Price: $1.43

Market Cap: $50.3 Billion

Ripple, created in 2012, is tainted by lawsuits from both the SEC and private investors. In January, Coinbase delisted Ripple from its exchange. However, some other exchanges still allow trading in Ripple.

If you are willing to overlook the SEC issues (numerous and described in my recent article), Ripple might eventually succeed. Ripple wants to be a real-time payment settlement system with no chargebacks. The problem is there are a number of other cryptocurrencies in this space as well.

You can tell that I am somewhat lukewarm about Ripple’s prospects. Nevertheless, the currency has been rising, despite its troubles. For example, XRP-USD closed out 2020 at $0.2324. As of May 10, it was at $1.43. This means it has risen 515% so far this year.

I suspect that there is a good chance, given its speculative fever, Ripple token could cross the $100 billion mark. That gives it another 98.8% potential gain.

Cardano (ADA-USD)

Price: $1.68

Market Cap: $53.6 Billion

Cardano is a platform with a different blockchain validation system than Bitcoin or Ethereum. Those blockchains use mining and a proof-of-work reward system for miners. Cardano’s system, called Ouroboros, is based on a proof-of-stake validation.

Anyone can stake his Cardano to validate a blockchain set and get rewarded for this. This uses significantly less electricity than cryptomining. Even Ethereum is going to transition to this system within the next year. Cardano is already there and is currently the largest proof-of-stake validation blockchain and crypto in operation.

ADA coins can also be used for peer-to-peer settlement in payment transactions. The platform also enables smart contracts and applications that can run on its platform. However, the company that founded Cardano, IOHK, sets the rules for the platform and has funded its growth. To date, there have not been many large companies that use its platform.

Don’t expect Cardano to dramatically rise from here, given its huge market cap already. However, as adoption picks up over time, the token could rise in value.

VeChain (VET-USD)

Price: $0.21

Market Cap: $13.3 Billion

I have written bout VeChain and its supply chain and logistics focused blockchain platform. In fact, a number of large enterprises are now using VeChain, to track their inventory.

One such company based in Norway, DNV, tracks commercial cargo vessels and their cargo items. According to Seeking Alpha, it was an early adopter of blockchain technology to track this inventory.

VeChain is also unique in that it pays a dividend of sorts called VeThor (CCC:VTHO-USD) to VET token holders. In my previous article, I estimated that the dividend rate is a little over 1.3%.

This makes VET-USD a truly unique blockchain and cryptocurrency. The VeThor cryptocurrency trades separately and is also worth your consideration.

Stellar Lumens (XLM-USD)

Price: $0.67

Market Cap: $15.46 Billion

Stellar Lumens is a blockchain protocol for payments systems. It wants to ease money transfers around the world. In 2017 Stellar Lumens started working with the government of Ukraine. They are in discussions to develop a national digital currency. This will be a signature event for Stellar Lumens if this gets off the ground.

In its essence, Stellar is an open-source protocol for exchanging money or tokens, according to Wikipedia. It was founded by Jed McCaleb, who founded Mt. Gox and was a co-founder of Ripple.

Ripple’s success will depend on how well its payment system platform will be adopted around the world. So far, it has limited success. It may take longer than most people may want to wait for the Stellar Lumens platform to be adopted by national governments and enterprises.

Tron (TRX-USD)

Price: $0.128

Market Cap: $9.1 Billion

Tron is an operating system based on a blockchain with an independent peer-to-peer network. The Tron Foundation originally raised $70 million in an initial coin offering in China. Since then the TRX-USD crypto, called Tronix, has risen to nearly $10 billion in market value.

Wikipedia reports that the Tron crypto had a controversial background, including charges of plagiarism and certain other charges. The Tron Foundation resisted these accusations and tweaked its modus operandi by acquiring BitTorrent, the biggest peer-to-peer file-sharing network.

Justin Sun founded Tron and is now also the CEO of BitTorrent. According to Coindesk, he sees Tron as a viable competitor to Ethereum. That could be one major reason why Tron has done well this year.

Tron ended 2020 at 2.69 cents. At 12.8 cents today it is up 376% year-to-date. Look for TRX-USD to continue to do well as it gains acceptance.

BitTorrent (BTT-USD)

Price: $0.00637

Market Cap: $4.2 Billion

BitTorrent is a peer-to-peer file-share platform founded by Bram Cohen and later sold to Tron (see above). The platform seeks to enhance users’ ability to distribute and data and large electronic files using a decentralized protocol.

Initially, the protocol was used to allow illegal downloads of pirated movies and other media on a decentralized basis. Later, after receiving private equity funding, BitTorrent cut deals with the largest seven movie studios to rid itself of illegal copyright issues.

Recently BitTorrent has received licenses from a number of these film studios to distribute their content. This makes its cryptocurrency quite valuable.

Although this currency is not in the top 20, I wanted to include it since I think it has substantial ability to appreciate over the next year. This is because its platform solves real-world issues relating to large file sharing.

Since selling BitTorrent to Tron, founder Bram Cohen has gone on to found a new cryptocurrency Chia (CCC:XCH-USD). Its goal is to make it easier for people to use unused space on their computers to mine cryptocurrencies and make money.

Recently BitTorrent was added to a new exchange, Poliniex, allowing it to be staked by validators. This exchange is also owned by investors that include Justin Sun, who bought BitTorrent in 2018. Some speculate this could account for its recent uptick. Look for BitTorrent to continue to do well as its adoption rate grows.

These 7 cryptos (really eight when you include VTHO-USD) all have prices below $20 but are among the top 20 largest cryptocurrencies by market capitalization. This implies a significant level of acceptance; these are not fledgling cryptocurrencies just getting off the ground.

The theory here is that one can buy a large number of shares, given the low prices, and given that the market caps are not yet mature. A mix of investments in all or some of these digital cryptocurrencies will certainly do well over time.

On the date of publication, Mark R. Hake held a long position in Bitcoin, Ethereum, BitTorrent and Dogecoin. He did not hold a long or short position in any of the other securities mentioned in this article.

Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide

WILL THE REAL SHIBA INU PLEASE STAND UP?

Last month I was fixated on the meme coin Doge as it seems to be hitting a lot of headlines due to Elon Musk flirting with it and even accepting Doge as payments for Tesla and proposing to launch a Doge-1 satellite to moon. Elon Musk is trolling with Doge and this meme coin is riding on celebrity ratings.

But the Saturday Night Live which was hosted last week by Elon Musk also seen the rise of another meme coin. Shiba Inu, which is nicknamed the Dogecoin Killer rose from the ashes and has been breaking crypto exchanges the last few days.

I’d like to discuss the similarities and difference between these two meme coins to ensure crypto buyers know what they get themselves into.

SIMILARITIES
1. Both are meme coins
2. Both are tokens
3. Both feature the same Shiba Inu dog in their logo
4. Both wants to go to the moon

DIFFERENCES
1. Doge has infinite supply whilst Shiba has limited supply
2. Doge is built on Bitcoin Blockchain whilst Shiba is built on Ethereum Blockchain
3. Doge has a centralized system whilst Shiba is completely decentralized
4. Doge is inflationary whilst Shiba is deflationary
5. Doge has no ecosystem whilst Shiba is building an ecosystem
6. Doge will be a stable coin whilst Shiba wont be a stable coin

SHIBA INU COIN: VALUE AND MARKET CAP EXPLAINED

The value of Shiba Inu today (12th May 2021) has been fluctuating between a 24 hour low of $0.00001260 and a high of $0.00003137, at the time of writing.

While Dogecoin has been on a steady incline since the beginning of 2021. The currency has yet to hit the $1. As it stands Dogecoin has hit an all-time high of $0.74 and has dropped back to about $0.50

The current market cap for Shiba Inu (SHIB) is $11.7 billion at the time of writing whereas, for Dogecoin the market cap for the currency is $67.24 Billion, which is a slight dip from where Forbes had placed it in early May 2021, at $69 Billion.

Dogecoin place as the fourth most popular currency on the market has not yet changed, as it sits behind Bitcoin, Ethereum and Binance Coin. Whereas, its up and coming competitor Shiba Inu coin has ranked within the top 20 cryptocurrencies on CoinMarketCap. You can see the value of cryptocurrencies on trading sites such as Coindesk, which shows the real-time value of cryptocurrencies.

INVESTING IN CRYPTO IS A RISK
As many know, investing in cryptocurrency is taking a risk as the market can be extremely volatile. There is also no guarantee that you can convert crypto assets back into cash, as it may depend on the demand and supply in the existing market. Coins can also be “burned” at any moment, diminishing a large supply.


Doge to the Moon

The lockdown around the World is causing investors to do more online trading as a hobby and this is causing the spike in the price of a ‘joke’ in cryptocurrency! DogeCoin

Dogecoin is a cryptocurrency, a form of digital money that, much like bitcoin, enables peer-to-peer transactions across a decentralized network. One important difference: bitcoin is the original blockchain proof-of-concept. Bitcoin is ground-breaking. Bitcoin is (some believe) world-changing tech with the potential to transform how money works in the 21st century.

Jackson Palmer, an Australian started this craze when he was at a Nascar Race in California and saw this Car with a picture of a Shibu Dog on the bonnet. It was meant to be a MEME! DOGECOIN – Digital Currency and the light bulbs went off!



Palmer registered dogecoin.com domain name and decides to tweet and reach out to anyone who was interested. Billy Markus was interested, and he saw that Bitcoin source code was open source and he decided to take a break from his video games and literally wrote the cryptocurrency code just for ‘sillies’ as some would say.

It too Markus 3 hours to just write the DogeCoin Cryptocurrency code. Why was it so easy? It was a CONTROL+F BITCOIN and replaced Bitcoin with Dogecoin. Of course, there was some changes to few elements like Markus created 100 Billion Dogecoin where as Bitcoin only has 21 million. Oh! and the change in fonts too!

But the doge didn’t hit stardom as there wasn’t any miners and also there was no use of it. It wasn’t even listed in Coinbase or other trading platforms until late 2020 when Elon Musk tweet about ‘Doge to the Moon’. Musk tweets has driven the price of Doge up and it has risen over 6000%



1st January 2021 – Doge was trading at $0.00461 with a market capitalization of $726 million
1st April 2021 – Doge was trading at $0.0536 with a market capitalization of $7billion and today
19th April 2021 – Doge is trading at $0.33 with a market capitalization of $42 billion

I suspect that Doge would hit $1 by the end of the month if the same craze still holds. There are predictions it will fly to $10 once it hits $1.


If you are bored….. try invest into DogeCoin and hold for at least several months.

https://www.coindesk.com/price/dogecoin

How to buy bitcoin

Hello there!

Its been almost 12 months since I last posted anything here and this is largely due to this Covid-19 pandemic that has got me holed up without any significant travel.

I guess that’s an excuse so I’ll just get straight to my post for this evening.

How to buy bitcoin and any other cryptocurrencies!
I must say that I tried to stay away from the subject of cryptocurrency for a while as it just didnt get integrated into the financial system quickly. But having watched bitcoin hit the price of $56,000 and moves taken by major investment funds to start buying bitcoin, I think we about to just make something out of this cryptocurrency.

I am writing this post, to largely target 3rd world countries who still struggle to buy any cryptocurrency and would be subject of scammers who want to take away your investments with bitcoin. So I want to help you as much as possible to make the right decision and be safe with your investments

So here is the good news…
You don’t need a middleman to do your buying of bitcoin or cryptocurrencies. You can do it yourself in 5 easy steps.
Requirements: Visa Debit Card or Master Debit Card (must have money for purchase), email account and phone number

STEP 1: Create an online account with one of the major Platform providers. (I use Coinbase and Kraken)

  • TradeStation – Best Trading Platform.
  • Coinbase – Best Crypto Exchange.
  • eToro – Low Fees.
  • Kraken – Maker-Taker Fee Schedule.
  • Bittrex – Most Altcoins.
  • Gemini – Offers Gemini Dollar.
  • Robinhood – Best Mobile App

STEP 2: Check if they can accept your Visa Debt Card
They may need to do KYC checks and wont accept your VISA which happens alot as you in the 3rd world countries where KYC checks are really difficult for them.
If they accept your Visa Card – go straight to STEP 4

STEP 3: Use a 3rd party website to buy bitcoin before you can transfer to your wallet which you created in STEP 1.
I used to use a site called Virwox and it closed down. Now I used a site call ZenGo

STEP 4: Deposit funds into your Wallet. (Make sure you alert your bank that you are doing online purchase)
You can start as little as K100.00 or as high as K10,000.00 depending on the daily limits on your card

STEP 5: Hold and Pray
The process will take from 5-20mins to be reflected in your wallet. Once you it appears, you are done. You can hold that bitcoin in your wallet for as long as you want. Just monitor the price of bitcoin and pray it rises before you can sell it

Dangers:
Buying and trading bitcoin has some problems as well.
1. Withdrawal, you need to be able to change that into your local currency. This is one of the biggest hurdles for 3rd world countries
2. Loss of Access to your wallet. Many people lose access to their wallet as they lost the 12 word phase code, or they lost their own mobile number or even lost access to their emails. (that’s how I lost my 8 bitcoins)
3. Platforms closed down. Some platforms and wallets gets closed out and you can lose your cryptocurrencies if you dont check your emails for any notifications.

Personally, I do BUY & HOLD strategy on cryptocurrencies. I dont have an intention to ‘SORT’ it out like what most ‘day-traders’ do.

Happy Trading!

Debt Trap – How loans trap us

The financial crisis is one inseparable part of a person’s life, and it may come in anyone’s life, without any notice. There are situations when the most financially stable person would seek support. Any they come at any time of our lives without notice.

That need for financial support is complemented by a loan, which could be a formal arrangement with the banks, financial institutions or informal money markets with individuals. The loans are either business loans, housing loans and the widely use loans are the personal loans.

When the credit is availed by the banks, other financial agencies and informal money markets for the personal use, it is called Personal Loans. This Personal Loan has come to the rescue of the many people, with the instant availability of funds. These Personal Loans have always been the helping hands during the urgent needs of the people and have solved various unavoidable circumstances in a person’s life.

But at the same time, the Personal Loan has been a cause of worry for many. Even, if the Personal Loans have been the lifesavers many times, they are the ones, which come with some hidden traps too


Informal Debt-Trap

In Papua New Guinea, the desire for fast personal loans to patch the gap before the next payday has forced many people to turn to INFORMAL MONEY MARKETS. The main reason for this is the CONVENIENCE, quick turnaround and the ZERO paperwork that comes with the requests for a loan.

As always, convenience comes with a price, and the price for this informal money market is very high. The interest charge for these loans are usually between 30-60 percent and only for a short period usually within 1-2 weeks.

The formula used for this interest calculation is the SIMPLE FORMULA.
You borrow K1, 000.00 at rate of 40% for 2 weeks; you pay K1, 400.00 at the end of the 2 weeks. If you do not pay at the end of the 2nd week, they charge another 40% on that K1, 400.00 and you end up paying K1, 960.00 after a month.

These informal money markets has sadly been a DEBT-TRAPPED for many Papua New Guineans who were not able to pay their loan when the loan sharks come calling.


Formal Debt-Trap

Then there is the Banks and the Financial Institutions who also offer personal loans aside from housing loans and business loans.

The requirements for personal loans, housing loans and business loans varies from each Bank and financial institutions. However, the calculation of the interest charge is the same across all those different requirements.

I will discuss the Housing Loan and how interest are charge, it is no different to a personal loan and business loan.

Personal loans have higher interest rates, Kina Bank charges about 20% p.a and BSP charges at about 27% per annum.  Home Loans have lower interest rates. Kina Bank Charges 6.5% interest on home loans whilst BSP Bank charges 6%, however BSP has a special of 4% per annum for the First Home Ownership Scheme over a period of 40 years.

Let’s use the FHOS of BSP to do a calculation of K400,000 for period of 40 years at 4% per annum interest

These Banks and financial institutions use COMPOUNDING FORMULA to calculate interest payable and additional charge interest on any outstanding loans which the called CAPITALISATION.  There 2 calculations, the first is for the repayment amount for the duration of the loan and the other is the interest charge on any outstanding loans. The interest is calculated daily and charge monthly.

Formula:

Mortgage Calculation Formula

Calculation:

  • 4% annual interest rate needs to be change into an effective monthly rate. Therefore we divide 4%/12 months = 0.3% effective interest rate
  • Number of repayments would be 40 years multiple by 12 months, therefore 40 x 12 = 480
  • Calculating the Monthly repayment using the formula above gives you K1, 573.64 which is monthly repayment
  • Aside of the fixed repayment, there is also an interest charged for loan outstanding. This interest is calculated daily and charged monthly, this charge is called CAPITALISATION.

A simple spreadsheet of repayment looks like this after calculations are done, it is done using a compounding formula

The BIGGEST TRAP in this Formal Loan is that the loan interest is charged daily and added to the loan amount monthly. This interest on loan increases the loan amount each month, and whilst we pay fixed amount monthly, the repayment would not seem to make any difference as CAPITALISATION costs keeps adding up.

The only way to get out of this formal debt-trap is that you find ways to pay more than then monthly repayment, any lump sum amount or extra repayments would assist in getting out of this, otherwise, it would take more than 40 years to completely pay of your debt.