Hello all. First time poster, 3 month lurker, been trading on BTC-e for 2 months, in alts for about a month. I thought I would share some of my past experiences with others who are new to crypto in the hopes that they would develop a strategy for their trading. Until I did this, I flailed about and lost a fair amount of BTC. Such is the cost of education...you have to feed the whale before you can harpoon it. Hopefully by developing a strategy you'll feed them a bit less than I did in the beginning.
We'd all like to become wealthy with Bitcoin. My experiences have led me to believe that the key to doing so (at least the first step) is investing in a good altcoin and holding for 6 months to a year with the intent of increasing my initial investment by 10-20x. At that point, my stake will be great enough to move to a larger position in Bitcoin itself for more stable, longer term growth (2-4 years). Which alt to invest in? This is a question I have spent 50-60 hrs a week for the past month or so researching. I've traded in and out of about 15 different alts, and held positions in 5 for a longer period. Here's my experience.
I've invested in Sexcoin, Franko, Deutsche Emark, Unobtanium and (currently) Catcoin. I was initially attracted to these coins because they all had a marketable gimmick that I thought would help them gain attention. Coins are only worth what people think they are. Therefore, publicity and developer care (design of coin) are what will give a coin value. Sexcoin has potential use in the adult industry. This is a plus. Franko and Unobtanium are both 'rare.' Emarks are just begging to be branded the 'German' altcoin. Catcoin is a 'scrypt' bitcoin (a positive twist on the most proven design) with the potential to piggyback on Doge's coattails.
What happened? I pulled my position on Sexcoin after making a profit during its December 10th pump. I felt that the trouble involved with converting BTC to LTC to purchase it was making it difficult to bring in larger investors. I'll probably reinvest here if it gets a BTC/SXC pair, but for now there is not enough incentive for me to place my limited amount of BTC here.
I bought Franko and Emarks. Reassessing after loosing a significant amount of BTC on both during the China fiasco, I dug deeper into forum postings and discovered a lack of engagement/promotion as well as basic communication issues (Emarks) with the developers of both coins. As I feel developer engagement and community building are crucial to an Alt's success, I was forced to pull my investment. Both coins have recovered somewhat since then but the two above problems remain.
I like Unobtanium, developer seems engaged, but I feel it is not as well supported by its community as the alt I went with. I may eventually place a small amount of my holdings (10%) in UNO simply because of its rarity. I have yet to decide if I feel it is the best 'rare' alt.
I considered, but did not invest in, DOGE, LottoCoin and Kitteh as my research led me to believe these coins are aimed towards exclusively pleasing miners. As an investor I'm after different things in a coin.
I am currently 'all-in' on Catcoin. Here's why: The design of the coin will provide for slower initial, but greater and more stable mid-to-long term growth. As I understand it, the difficulty in mining CAT does add a bit of risk early on as far as retaining miners, but I feel that this problem will go away as the coin appreciates in value. The rewards, for me, outweigh the stress of having to watch the coin find it's way early on.
It has great potential for publicity given that it is the first 'CAT' branded coin to market. I like Cats. Lots of other people do too.
It isn't a 'rare' coin per say (like UNO or BitBar) but it hasn't flooded the market like DOGE, Kitteh and the other alts with better mining specs. CAT is an investor's dream alt. The patient will be rewarded with stability and steady mid-term growth.
I feel the amount and value of coins is a sweet spot for investors. Alts priced in the 1-5 dollar range with max coin amounts similar to Bitcoin are common in the top 20 by market cap. I feel other naive investors will feel the same way, and most won't take the time to study the crypto as much as I have. At it's current value, CAT is primed for top 20.
The developer is present and highly opinionated about the nuts-and-bolts operations of the coin. Most importantly, he didn't premine; any compensation he gets will come from the community. This is a huge incentive to remain engaged. And he does: In his arguments with miners, trolls and bears (oh my!) you can tell he cares about, and is deeply ego-involved with the coin itself. When it comes to crypto, he seems deeply knowledgeable in an almost 'artistic' way; I'm a musician and I've met enough talented eccentrics to recognize genius when I see it. This guy understands what he is doing and has, what I feel, are good reasons for all his decisions. Not all will agree with his positions, but I like people with strong opinions and good reasons to justify them.
Most importantly, this coin has a community of believers behind it. There is a new forum. There is a LOT of activity on the CAT bitcointalk forum pages. I'm even beginning to see news articles coming in (on a coin just a few days old):
http://www.dcmagnates.com/dogecoin-prices-down-passing-fad-or-is-it-the-rise-of-catcoin/ In closing, I could have already cashed out my initial investment in CAT for nearly double what I bought in at. But I'm choosing to hold. With a market cap around 650k when I bought in, this coin's market cap only needs to go to 6 million for me to add a decimal place to my initial investment. CAT worth $6-7 ea? Highly likely in a 6-12 month timeframe given the positive traits listed above. With the right promotion and other early adopters (like me) holding on for the ride, maybe only 6-12 weeks.
Finally, if Bitcoin takes off with institutional investors in 2014, I think two decimal place gains are possible with better alts. 60 million market cap would yield a CAT worth of $60/ea. I feel this is somewhat less likely, but still well within the realm of possibility over the next year.
Glad to be part of the community! Buy CAT!
