2 Ways to Play This Top Crypto Narrative

by Bruce Ng
By Bruce Ng

Last week, the crypto world waited with bated breath to learn the fate of a U.S.-based spot Ethereum (ETH, “A-”) ETF.

You remember how bullish the Bitcoin (BTC, “A”) ETF approval was back in January, right? The approval of an ETH ETF was likely to spark a similar bullish momentum in the No. 2 crypto by market cap. Even better, this would kick open the door to even more spot ETFs for other top cryptos.

And we got it! Well, sort of.

Spot Ethereum ETFs are indeed on the horizon. We just don’t know when, specifically.

Like my colleague Marija Matić suggested could happen last Monday, the SEC gave investors only a partial “yes.” It approved the potential for an ETH ETF to be listed on exchanges … but it did not approve a specific ETF application.

So, if you were disappointed that ETH ran up right away and then retreated just as quickly, now you know why.

Don’t be disappointed by the lackluster price action, though.

After all, Ethereum has not been leading the altcoin market this cycle. So, we shouldn’t expect a bit of bullish news in ETH to be enough to kickstart the second phase of the broader bull market.

 But rest assured that next leg up is coming.

You can see this by isolating just the altcoin market cap, as measured by TOTAL3:

Figure 1: TOTAL3/USD. Source: TradingView. Click here to see full-sized image.

 

You can see that the altcoin market has consolidated for the past two months, creating a strong foundation from which it can launch higher.

And it is now showing early signs of creeping back up to test overhead resistance. 

I believe that, with just a little more push from the broad altcoin market — rather than just from Ethereum — we’ll see TOTAL3 break through that resistance with ease.

Following that, the all-time high of $1.12 trillion, established at the peak of the last bull cycle — will be set as a firm next target.

In other words, once that happens, we’ll likely see the start of altcoin season.

From there, I expect to see altcoin rallies across sectors.

Pick a Pony in This Dog Race

But not all rallies will be equal.

In fact, I expect memecoins — the current leading narrative in crypto — will continue to outperform the other sectors.

Why? Because they have …

  • Broad appeal to both crypto maximalists and casual retail investors, and
  • Fair token releases, which work to prevent “pump and dump” schemes and price manipulations from big-foot early investors.

Remember, memecoins are cryptos with no economic utility or fundamental value apart from the communities and memes they represent.

They are very volatile, and most don’t make it through their first bear market. However, they can offer quick, outsized gains during the frenzy of altcoin season.

This has led to … 

The Memecoin Race

Figure 2: Top memecoins by market cap presented as a race. Source: memecoinrace.xyz. Click here to see full-sized image.

 

Old favorites like Dogecoin (DOGE, “C+”) and Shiba Inu (SHIB, “C+”) have more stability and staying power. These giants have survived a bear market already and are keen to retake previous all-time highs now that the bull is back.

Their main competition? The newer memecoins.

These projects — such as dogwifhat (WIF, “E+”) and Bonk (BONK, “C+”) — haven’t yet been tested in less favorable environments. That, and the fact that they are much smaller than DOGE or SHIB, means they are much more volatile.

But if they see the same sort of growth that the old guard did last cycle, they’re also the coins that are most likely to see the incredible returns the crypto market is known for.

Now, it looks like the racers are at the starting gate. You can see below the upticks in price over the past week in the leading competitors.

Click here to see full-sized image.

 

So, when the field is full of dog, cat and even political memecoins, how you do pick the best pony for this race?

I’ve got two ways you could play this:

  1. Invest smaller amounts into a basket of the top memecoins. Then, rotate profits of winners into laggards as each pumps in sequence.

    This may be hard to do. You’d need to time the market to get each rotation right. Also, your capital would be spread out among multiple coins, which could dilute your potential gains somewhat.

  2. Invest more in only one or two memecoins you firmly believe have staying power. And hold them for several months. You wouldn’t be timing the market here, but you’d be riding the bulk of the moves up for each coin over the course of the bull market.

If neither of these strategies works for you, don’t worry. I’ve got a secret third strategy that might be more your speed. And it was developed by my colleague Juan Villaverde for his Weiss Crypto Investor members.

They’re currently sitting on an average gain across their entire portfolio of 107%.

How? By combining elements of both strategies above and acting on Juan’s urgent “buy” and “sell” recommendations.

To learn more about it, click here.

Best,

Dr. Bruce Ng

About the Contributor

Dr. Bruce Ng is a literal rocket scientist who was among the first to write about DeFi. Today he applies the same mathematics and scientific methods to the crypto space to discover the world’s most promising, and potentially most profitable, altcoins.

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