In a recent Crypto Banter video, the focus was on the changing dynamics of altcoin investments, especially the problematic role of venture capital (VC) in new token launches. He became more interested in how VCs often inflate crypto valuations, making new tokens less attractive to retail investors. Moreover, it provided insights into promising altcoins that could outperform, particularly if the Ethereum ETF is denied.
Issues with VC-Backed Tokens
Crypto Banter criticized venture capitalists for driving up token valuations before they hit the market. Previously, new tokens raised funds at $20-30 million valuations. Now, they’re valued at over $1 billion before retail investors can buy. This means retail investors often pay a premium and face big losses later. StarkNet is an example—it dropped 74% after hitting $1 billion in value due to low interest from buyers.
Top Altcoin Picks
To counter the risks these VC practices pose, he recommends several altcoins with high market cap to fully diluted valuation (FDV) ratios. This means most of their tokens are already in circulation, reducing the risk of sudden supply increases. These tokens will likely perform well, especially if the Ethereum ETF is denied.
Solana (SOL)
Solana’s token circulation is 78% and growing. It is a high-conviction bet owing to the extensive ecosystem and technical base.
Near Protocol (NEAR)
Another good option is Near Protocol, which has 90% of its tokens in circulation. High circulation reduces token release value declines.
Fantom (FTM)
Fantom is particularly noteworthy due to its recent Sonic upgrade, transforming it into a high-speed side chain for Ethereum. With most of its tokens circulating, it presents a promising investment opportunity.
Injective (INJ)
Injective stands out for its innovation and market position. Investors who want to avoid VC-dominated projects may consider it.
Avalanche (AVAX)
Avalanche is a stable cryptocurrency investment due to its large market size and high circulating token proportion.
BNB (BNB)
While not traditionally a top pick, BNB’s technical chart shows promising upward trends, making it a potential buy.
Arweave (AR)
Arweave is particularly attractive as 100% of its tokens are already in the market. Its recent outperformance against Filecoin underscores its potential.
Polkadot (DOT)
With 94% of its tokens in circulation, Polkadot offers a compelling investment, especially with its recent technological upgrades.
Conclusion
Focusing on tokens with high circulation and strong fundamentals is crucial for investors seeking to navigate the altcoin market amid VC-dominated projects. Crypto Banter highlights tokens such as Solana, Near Protocol, Fantom, Injective, Avalanche, BNB, Arweave, and Polkadot that offer promising opportunities while minimizing the risks associated with VC influence.
