2016 is gone, an incredible year for blockchain sector is gone. We’ve seen how the bearish BTC trend of 2014-2015 has been crushed with two big movements upwards. The first one broke definitely the long term bearish trend, and the second one it’s already pushing BTC to all time high.
An interesting and well-known fact is the Chinese growing influence in hashrate and prices. ALL significant movements in BTC have been created by the Chinese investors. It’s easy to detect that fact: When BTC has been stagnant, “official” BTC/USD rate and BTC/USD rate in biggest Chinese exchanges has been more or less the same. On the other hand, during the BTC rallies, there has been a constant +5%-+6% spread favorable to Chinese exchanges (BTC is bought about +5% more expensive in china than in the rest of the world).
In conclusion, Chinese are the ones who are pushing BTC price up. The rest of the world is simply following the trend.
But BTC hasn’t been the star this past year. 2016 will be remembered to be the year of the “second” altcoin explosion. I say “second”, because altcoin growths in 2013 shouldn’t be considered as a growth, but a giant P&D schemes.
We’ve seen the explosion of interest in smarts contracts technology with the huge growth in value of Ethereum, which arrived to be 1/5 of BTC value at the highest point (market capitalization).
But Ethereum wasn’t the only one who grew up hard in value. Majority of serious projects grew a +500%-+1000% during the Ethereum rally in Q1 of 2016. Basically almost any coin went up, even the most scammy ones. The euphoria climate made it possible to launch lots of new projects, and new ICO’s were launch almost every day, being Waves & Lisk the most successful ones.
After that, it came another big BTC growth in Q2 that depressed all altcoins in BTC value, but not so much in $ value.
In Q3, BTC stopped during some weeks, and another altcoin party was about to come, the anon-party. Two months before the super-hyped Zcash launch, anon coins started a slow but constant rally, with Monero as the pump leader. Anon-party intensified later august and peaking in September. Monero rose incredibly in BTC value, and even more incredibly in $ value. From 5M $ market cap in January, to a 200M $ in September. But Monero wasn’t the only altcoin that grew during the anon-fomo, all coins that had a single anon mention in their code were pumped hard. Once again, the climate in altcoin section was euphoric and this made possible to appear the second ICO round in 2016. Lots of ICO’s were launched successfully, many of them as Ethereum dapps projects.
And once again, in Q4 the BTC rally started again and put altcoins to the ground in BTC value, but not so much in $ value. And the Chinese rally of Q4 continues strong through the 1,000$ mark, and doesn’t seem like the Chinese want to stop anytime soon.
MY OPINION OF 2017
What can we expect about 2017? Well, first of all, most probably we will have a new altcoin rally when the BTC pumping machine stops. History demonstrates that a big BTC rally always gets followed by a big altcoin rally when BTC stops, and this time won’t be different. Now, the main question is to know which will be the most successful altcoins during the rally that is coming.
The answer, as always, is in fundamentals. Don’t get me wrong, fundamentals of a coin or a token are not the same as fundamentals of Amazon shares. Fundamentals of a coin are basically continuous developments, community support, trading exchanges & most importantly, BIG RELEASES planned. If an alpha coin/project is launching beta version in 6 months, that is a key factor to have in mind, even more important than all other factors. I will explain it more in another topic, but let’s say that big releases are like a hot temporal point that is used to generate hype, promotion, and of course, a big growth in price and volume.
As a personal opinion, I’m expecting that Chinese based altcoins will be the first ones to grow. This rally is being drive entirely by the Chinese, and there are some “sleeping” Chinese coins that have been waiting a lot of time to pump. My predictions are that classic Chinese based coins LTC, DOGE, PPC, NMC, BTS, BLK, VTC & the recent serious project ANS will be hard pumped just after the BTC rally starts to slow down, so this Q1 2017 I will keep a significant % portfolio positions in Chinese based coins.
In the “western” altcoins, my prediction is that the trend that started in 2016 by pushing up the best managed-developed projects will continue. Projects like ETH, MAID, FCT, DASH, ICN, GAME, STRAT, SIA … will be the primed ones to grow. I’m betting for MAID & GAME for these Q1-Q2 because of my own reasons that I will explain in another topic.
About the classic 2016 ICO’s Lisk & Waves, there is still lot of development and work to do and it would be strange to see those projects make big growths before some key developments are done. I would say Lisk and Waves will grow hard in 2018, but that is just an opinion and things can change quickly.
About the anon-coins, I know that nowadays there’s a lot of hype surrounding anon sector, but for the moment I don’t plan to enter big in any anon project. Monero looks overhyped and scary, Dash looks fundamentally good but with an already big market cap, ZCash is still in a high mining phase and other anon projects are more C projects than nothing else.
About media sector, I don’t plan to invest in any of the actual projects because there are too many doubts about economic models to follow. Steemit has a weak economic model, and AMP still doesn’t really know what is working on. I will stay away, but will watch very closely the media-value coin whitepaper that the famous bitcointalk user iamnotback is gonna release in Q1 2017. That man is a genious, and his approach will be surely an interesting approach.
Also we can’t forget about the two “banking” projects XRP & STR. They are both really stagnant, but will grow someday for sure. We will have to be very attentive to see when the “hot temporal points” will be.
About C projects, we know that in an altcoin rally almost every of them will pump, but it’s good to be in the most solid ones to maximize the profits and minimize de risks. Fundamentally, the strongest C projects in my view are SYS, BLK, VTC, DGB, DCR, NXC, BAY, BURST, QORA, VIA & FLO. All them have a high risk, low resources but there’s a team behind that is taking care of the coin, and that means a lot in the long term survival.
In conclusion, I’m expecting another 2017 altcoin rally that will be the continuation of the rally started in 2016. When we look at the market caps and the prices in $ terms that we are entering, we could say that alts are much more expensive than in early 2016 and it’s a risky option, but we have to look at the long picture: Bitcoin market cap is worth 16.5 Billion $. That is almost 10 Billion $ more than it was one year ago. Biggest altcoins are just worth some hundreds of million $, and most of them are under 50M$. If just a small part of the money coming to Bitcoin goes to the other blokchain assets, we will have superior growths one more time.
We all deserve it, and everything seems to point to that directions. Fingers crossed.