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In today’s special edition of The Jolt, I’m answering six more burning crypto questions I received during my crypto “Ask Me Anything” marathon session.
If you missed Part 1 on Monday, you can catch up here.
Let’s dive in…
1. I've avoided bitcoin (BTC) because there is no way to value it. It just requires more buyers than sellers, and how do we know the buyers will show up? How can I view this as anything but gambling?
You’re correct that bitcoin can’t be valued using traditional metrics. It doesn’t trade on fundamentals, but supply and demand.
I recently met a guy who first bought BTC in 2010. He’s made tens of millions of dollars in profits from that one trade. “What got you interested in bitcoin?” I asked.
His response: “It’s the only commodity in history that doesn’t have a supply response to rising prices.”
Oil price up = companies drill more oil.
More oil supply = prices down.
Not for bitcoin. A set number of bitcoins are mined each day, no matter what prices do. As more money floods into bitcoin, prices only go one way: UP.
Bitcoin now has a 15-year track record. It’s the best-performing asset of our lifetimes. Everyone should own at least a little.
And remember, bitcoin is only one crypto asset. There are dozens of crypto businesses generating real revenue that can be valued using traditional metrics.
2. What is the best way to research smaller cryptos?
There are over 15,000 cryptos listed on CoinGecko.
To sort the wheat from the chaff, you have to analyze protocols’ business models, measure growth, test out products, and talk to founders.
It’s a full-time job. This is what we do for you at RiskHedge Venture.
3. Do you put much credibility on an artificial intelligence narrative suggestion leading this cycle?
There are several interesting use cases at the intersection of artificial intelligence (AI) and crypto. We’re invested in three AI crypto projects in RiskHedge Venture.
One of these protocols created “Airbnb for computer chips.” It allows you to make money renting out your idle chips to users who need some extra computing power.
Another is building AI that isn’t controlled by a centralized force. Think of it like “ChatGPT” on the blockchain.
4. How many cryptos are a useful product or tool and not just speculation?
I believe crypto will be the best-performing asset class over the next decade.
But I wouldn’t touch 99% of tokens.
There are currently 100–150 cryptos that have real businesses, producing real revenue. Tomorrow’s biggest winners will come from this group.
5. What three things would you analyze in a given crypto to consider it worth investing in?
#1: Test its product. Investing great Peter Lynch used to say, “Invest in what you know.” We kick the tires on a crypto app or service before we even think about recommending it.
#2: Measure revenues. Great crypto businesses make money. We avoid pre-revenue tokens.
#3: Tokenomics. What is the inflation rate… and how does it accrue value from its underlying business? We're extremely strict about only investing in cryptos with solid tokenomics.
6. You mentioned bitcoin is not your favorite crypto to own, but it’s returned an average of 150% a year for the last decade. You expect even higher returns with your recommendations?
As I mentioned Monday, only Nvidia (NVDA) has topped BTC over the past 10 years.
Yet in “crypto land,” BTC is somewhat of a dinosaur. Dozens of little-known cryptos have outpaced bitcoin over the past few years.
Seven of our positions are outperforming bitcoin this year. And that’s in a “bitcoin-dominated” market!
Now that we’ve escaped from regulatory hell, expect quality cryptos to leave bitcoin in the dust over the next 12 months.
Related: If You Only Had $100 To Invest in Crypto …
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