Bitcoin (BTC), Ethereum (ETH), Alt-coins and ICOs

There has been a recent run on alt-coins prior to Consensus 2017 and since then. Most alt-coins, which can be described as those outside of Bitcoin or outside the top 5-10 of total market caps have been on a massive run as of late. ICOs which have been around since Ethereum have also seen a tremendous influx of interest. BAT (Basic Attention Token) recently changed their initial target of $15m to $24m, and depending on the price of ETH were approaching $40m when it closed and finished in well under 60 seconds.

We are seeing a change how companies, start-ups and new ideas are being funded. An ICO (Initial Coin Offering, think IPO) will eventually be an alt-coin, once it can be traded on an exchange. The bigger alt-coin exchanges are https://poloniex.com and https://bittrex.com with a few smaller ones popping up here and there such as https://liqui.io/ and https://etherdelta.github.io - Some ICOs lock up their coins until the ICO finishes which can be a few days or a few weeks. The ICOs then will issue the tokens which can be traded on the exchanges above. This can allow for an early investor to either sell some of their tokens for an immediate profit (assuming their is a market an higher buy interest then selling) or to get out quick and move on to another investment. For those who are in it for the long term, you could see profits approaching 80,000% for example in Ethereum (ETH) which you could buy at $.25 initially or Stratis which is also in that same range. Of course there are also ICOs which are scams are they are not regulated by any institution such as the SEC (Security and Exchange Commission) or any other financial body that would oversee regulated securities, which ICOs are not.

The question becomes do you allocate current or existing funds into 100% ETH, and bypass questionable ICOs and Alt-coins, or do you diversify your portfolio? There are legitimate alt-coins such as Dash, Ripple, Monero and Steem. This is the question which is becoming harder to ignore. Previously people might be 80/20 or 90/10 Bitcoin to Ethereum, or maybe they weren't around for Bitcoin, so they are just the opposite and heavy Ethereum and light Bitcoin, if they are even invested in Bitcoin.

If I had to make a portfolio today with nothing currently invested in cryptocurrencies, I would suggest diversifying your portfolio. While Bitcoin still has a chance to have a massive run-up, I think you would be selling yourself short if you put all of your investments into Bitcoin. If you asked me today, I would suggest the following:

Bitcoin 40%
ETH 45%
Alt-coins 10%
ICOs 5%

There are numerous cryptocurrencies I could talk about, and I'm not saying that the above scenario is the best scenario for anyone, but a well-rounded portfolio of cryptocurrencies should well suit you for the future which lies ahead. There are some issues to worry about with both Bitcoin and Ethereum. Bitcoin's scaling date with 1MB block size limitations is coming to a head and so while it makes it possibly more volatile in that regards with the talks of a hard fork possible, it's been around since 2009, it has first mover advantage, the most hashing power for the most security of any blockchain, and it's becoming more of a store of value than a daily use case because of the increasing high fees due to the 1MB block limit it's hitting on for much of each day. Ethereum has it's own issues to include the DAO hack which split the chain into Ethereum (ETH) and Ethereum Classic (ETC). ETH rolled back the chain due to the DAO hack, which some thought made ETH open to not being trusted. Even if this was a one-time thing, it's still something which can be looked at as being a problem, but since that time ETH has only gained more traction and it's become the super highway for the majority of alt-coins and ICOs to ride on. It's like the code that is driving so many new areas of the cryptocurrency scene.

So on one hand you have the slow and steady pace of Bitcoin, which by the way is still inventing itself, but as much slow, but secure pace. (There are amazing things still in store for Bitcoin, just wait and see) On the other hand you have this new agile Ethereum which is making waves at a breakneck pace, but it's starting to run into some of the same issue as Bitcoin (at much lower scale) with the blockchain fees and spamming and the increased burden of the ICOs which just add to the traffic on the Ethereum blockchain.

It's a whole new world that's going on out here. Jump on board, diversify your portfolio and enjoy where this tech is going to take us.