Despite the soaring prices of cryptocurrencies prior to the recent crash, one lingering criticism remained unspoken: the sector was completely dependent on Bitcoin (CCC:BTC-USD). Wherever the original crypto coin goes, so does the rest of the digital market. However, Holo (CCC:HOT-USD) represented the hope that this old paradigm might change.
Source: Grey82 / Shutterstock.com
For one, the underlying token of the holo blockchain achieved more than 35 times between the beginning of this year and its peak price in early April. By comparison, Bitcoin rose about 2.2 times from the beginning of the year to its peak around mid-April.
In nominal terms, BTC was extremely impressive as it approached the mythical six-figure price point. However, anyone skilled in mathematics would rather invest $ 1,000 in the holo market than Bitcoin. It’s the difference between buying a pretty fancy car and paying a modest down payment for one.
But it’s not just speculative zeal that has drawn investors to the HOT crypto token. As my InvestorPlace colleague Mark Hake noted, the fundamental implications of Holo are incredibly compelling. He wrote:
“Holo wants to disrupt the crypto room. It distributes the blockchain on a peer-to-peer basis instead of everyone having the same blockchain or ledger. Holo says this avoids the “fundamental scalability problem” with existing blockchain platforms. By distributing blockchain ledgers to many different people, congestion can be avoided both when processing and when storing the blockchain. “
Over time, Hake adds, “The development of these types of apps will lead to increased demand for HOT tokens and also for the HOLO price.” Should bullish interest in fundamentals remain strong, he believes the technical Data will follow suit, which from here leads to “at least 100%” profitability.
I don’t necessarily disagree with the possible uptrend. But the question is when?
YOLO not with HOLO
As I write this, Bitcoin is trying to get back to the $ 40,000 level. The charts got painfully close to that point after a sudden onslaught of bullish sentiment. But the fact that it didn’t get there – at the time of writing – is pretty illuminating.
This is a crypto coin that was rightfully eyeing the $ 100,000 mark. In fact, many other analysts and forecasters were calling for $ 300,000 – some went beyond that mercury target. So BTC’s apparent inability to raise $ 40,000 (a drop in the bucket compared to 300,000) is worrying. It suggests that people are panicking and turning away from crypto coins.
If so, the benchmark should be the Nasdaq Tech bubble burst in 2000. Because from that perspective, it seems that the crypto market has a lot more to do. Whether you’re talking about holo or any other digital asset or token, everything is bitcoin-oriented.
Now some of the blockchain pedants will argue that I am using the term crypto and token synonymously and therefore erroneously. Let me save you the time wasted composing an angry email: I don’t care.
It’s not the point of what’s going on. Rather, the holo token (or whatever you want to call it) is currently pinging the classic sign of the collapse phase of the extreme boom-bust cycle.
To be honest, I think it’s very dangerous to buy into the holo token at this point. I would avoid the YOLO (you only live once) aspect of speculative cryptos – or any of the majors. People are afraid of losing their money. When that happens, people do some very strange things.
Acting calmly and rationally is neither.
That means you shouldn’t be going out on social media to push everyone to hold the line. If you have significant inventory, consider making something out of it so you don’t risk holding the bag.
But couldn’t it get better?
Of course, the red-hot cops will likely go down with the ship. You may claim that holo is a breakthrough achievement, an innovation that makes the blockchain more accessible and efficient. It may all be true. But I tell you – it doesn’t matter in a market crash.
Yes, over time, I believe there is a high probability that the holo token could be 10x from here. But I also believe that there is a big chance that HOT could fall in the next few months. If so, you could expect 20 times the profit for the same cash outlay.
The bottom line is that panicked animals are the most dangerous, much like trying to save a drowning person. Unless you’re a trained professional, Holo is a company to hold out with until the coast clears.
At the time of publication, Josh Enomoto held a LONG position on BTC. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s posting guidelines.
As a former senior business analyst for Sony Electronics, Josh helped Enomoto broker key contracts with Fortune Global 500 companies. Over the past several years, he has provided unique, critical insights into the investment markets as well as various other industries including law, construction management, and healthcare.