In the latest episode of Crypto Banter, the spotlight was on the evolving landscape of altcoin investments, particularly the problematic influence of venture capital (VC) on new token launches. The discussion underscored how VCs often inflate crypto valuations, making new tokens less appealing to retail investors. The video also highlighted promising altcoins that could outperform the market, especially if the anticipated Ethereum ETF is denied.
The Problem with VC-Backed Tokens
Crypto Banter criticized venture capitalists for driving up token valuations before they even hit the market. Historically, new tokens raised funds at valuations of $20-30 million. Today, they are often valued at over $1 billion before retail investors have a chance to buy in. This practice forces retail investors to pay a premium, often resulting in significant losses later. For instance, StarkNet dropped 74% after reaching a $1 billion valuation due to low buyer interest.
Promising Altcoin Picks
To mitigate the risks posed by these VC practices, Crypto Banter recommends several altcoins with favourable market cap to fully diluted valuation (FDV) ratios. These tokens, with most of their supply already in circulation, present a reduced risk of sudden supply increases and potential devaluation. These altcoins are poised to perform well, particularly if the Ethereum ETF is not approved.
Solana is a high-conviction bet with 78% of its tokens already in circulation. Its extensive ecosystem and robust technical foundation make it a strong contender in the market.
Near Protocol (NEAR)
Near Protocol, with 90% of its tokens in circulation, presents a solid investment opportunity. High circulation minimizes the risk of value declines from new token releases.
Fantom (FTM)
Fantom is noteworthy due to its recent Sonic upgrade, which transforms it into a high-speed side chain for Ethereum. With the majority of its tokens already circulating, Fantom is a promising investment.
Injective (INJ)
Injective stands out for its innovation and strategic market position. It is an attractive option for investors looking to avoid VC-dominated projects.
Avalanche (AVAX)
Avalanche is a stable investment, boasting a large market size and a high proportion of circulating tokens.
BNB (BNB)
Although not traditionally a top pick, BNB’s technical chart shows promising upward trends, making it a potential buy.
Arweave (AR)
Arweave is particularly appealing with 100% of its tokens already in circulation. Its recent outperformance against Filecoin highlights its potential.
With 94% of its tokens in circulation, Polkadot offers a compelling investment opportunity, especially with its recent technological advancements.
Conclusion
Navigating the altcoin market amid VC-dominated projects requires a focus on tokens with high circulation and strong fundamentals. Crypto Banter highlights Solana, Near Protocol, Fantom, Injective, Avalanche, BNB, Arweave, and Polkadot as promising altcoins that minimize the risks associated with VC influence.