3 Cryptocurrencies to Invest in: Tips from Ex-Binance Director

I’m Rong Kai, COO of PARSIQ, an international blockchain company offering reverse-oracle, If-this-then-that (IFTTT) response services. I also provide advisory and consultation services in blockchain, leadership and management. I was previously a Superintendent of Police and a Director in Binance.

A couple of years into my first job in the Singapore Police Force, I started investment in 2015. I began by putting money through my financial advisor in unit trusts, before taking my first steps of my own investment journey on the stock market. I’m sure many Singaporeans would be able to relate (though not necessarily on the part of the job at SPF).

Initially, I didn’t know which companies to invest in, so most were put into ETFs and “safer” options such as Singapore banks and Telco. I took the first leap across the ocean to US stocks in the same year I invested in Amazon despite it at an All-Time High (ATH) back then, because:
a) I believed in their platforms and growth trajectories, and b) I believe the macro-trends that e-commerce and cloud services are the future.

Since then, I’ve been finding out more about the wider economic trends and putting my money in great leading companies.

How Did I Got to Know About Cryptocurrency?

In 2017, I began dabbling in cryptocurrency trading as it was the rage then. I bought ETH on Coinbase, because of how I read that it was the fuel of the “internet” of cryptocurrency. Back then, I didn’t know much about smart contracts, the opportunities in the Ethereum ecosystem, or the risks involved. It shot up by 6x within a couple of months before it started collapsing. I sold it at a 10% profit – a vast difference from the 6X increase I could have received if I had cashed out at an earlier point.

I stopped trading from 2018 to 2019, and only came back to cryptocurrency again in 2020 when I joined Binance. It was a job that changed my life. I found out so much more about the cryptocurrency ecosystem, how smart contracts can enable so many different use cases, and how the market has matured since the previous retail-fueled bull run in 2017/2018. It gave me the confidence to start investing in cryptocurrencies again.

What are the 3 Cryptocurrencies You Bought and Why?

I hold a number of cryptocurrencies on a medium to long term basis, and I’d like to share about the following 3 cryptocurrencies I bought:

1) ETH

I am personally very bullish on ETH. It is still the oldest and most popular smart contract enabled blockchain, and the user base is amazing. You may know that Ethereum was facing very expensive gas fees when users transact on the chain, due to a large number of users and decentralised applications (DApps) built onto its platform.

This resulted in depressed growth in its ecosystem and token price for the first quarter of 2021 – but the recent April update to the Ethereum protocol drastically reduced gas fees, and the anticipated July update should resolve even more of the congestion issues. ETH went up more than 90% in the past one month, and I’m very confident of the long term viability of ETH as a cryptocurrency investment.

2) BNB

Binance Chain (BNB) is a coin issued by Binance and is the native token for Binance’s own Binance Smart Chain. I had always wanted to dabble in Decentralised Finance (DeFi) DApps, but Ethereum’s high gas fees (up to $150 per transaction at some points) was a huge deterrence.

BSC’s cheap transaction fees solved the issue for me – it started out at about 5 cents per transaction, now raising to about $0.64 per transaction. I use it primarily to generate interest (yield farming) on DeFi DApps on BSC, which at one point was giving me 200% annualised interest on my BNB.

3) ADA

ADA is the token for Cardano. It has a strong team behind it, and a large supportive community. It is pushing out updates to enable smart contracts to be built on it, which will hopefully drive more adoption on it. While there are also many cryptocurrencies like it, its more decentralised nature wins over crypto purists and other enthusiasts, and I’m certain that enabling smart contracts on it will drive up demand for the token.

What is Your Advice for People Who are New to Cryptocurrency?

A disclaimer – none of what I write should be considered financial advice, and I am just providing my personal opinion. For those who new to cryptocurrency, start by understanding three things that make a cryptocurrency valuable:

a) Use Cases

Each cryptocurrency has its own use cases (or lack of). For example, BTC started out as a trustless transaction ledger but is now more commonly taken as digital gold due to its limited and known supply.

ETH is the underlying fuel for its huge ecosystem, and anyone wanting to transact on anything built on Ethereum needs ETH to pay fees on the chain. The tokens’ use cases will give you an idea of the demand side of things – who would want to buy (and hold) it, and why.

b) Tokenomics

The tokenomics will give you an idea of the supply side of things. Do they issue out new tokens slowly through different methods (e.g. mining like BTC), or is there a hard or soft cap on the maximum number of tokens that will ever be issued, or is there a mechanism at which the blockchain reduces the supply (e.g. through burning).

The tokenomics matter because while BTC may reach $100,000 or beyond since it has only a maximum of 21 million tokens (give or take), another token like DOGE will never reach that sort of pricing because it creates billions every few months. Understanding the tokenomics gives you a rough gauge of the right pricing, and whether supply will outstrip demand.

c) Hype

Lastly, hype factor will drive short- to medium-term prices. I do not need to go into DOGE coins – it’s well reported in the news. Hype does not just apply to meme coins, but also to any tokens out there. Even if the use cases and tokenomics are great, if no one knows or wants to buy the coin and the demand is not there, the price will not increase.

Check out the hype, research why the community is excited, and find out who’s hyping it up: a hyped-up coin without great use cases and tokenomics will most often crash in price in the short term, so be careful not to fall for such scams.

Featured Image by Tech Daily on Unsplash

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