“100 Dollar Trending Coin Challenge” by Blockchain Center provides a step-by-step guide on how to invest in cryptocurrency. The author suggests investing $100 each day for 100 days in a new trending coin to test to see how the strategy performs.
“Backstory: In early 2023 I built our “Trending Coins” Tool which shows Cryptocurrencies that are currently trending based on a couple of different metrics.
Naturally the first question that pops into any degenerate gamblers mind is: Does this tool actually work as a trading tool? Is it possible to make a profit just by buying coins that this tool is “recommending”? After all the crypto market is highly hype driven.
There is only one way to find out. I need to try it! (Aaaahctually there is more than one way…I could just backtest this strategy with historical data, but where is the fun in that???)”
Blockchain Center
The following ruleset were established for the challenge:
- Everyday (if possible) I will buy one of the coins from this tool
- After 100 days I will decide if stop the experiment or do it for a full year.
- I will hold every coin for one year and then sell it. Reason is, that if I make a profit (come on!!!) it will be tax free after one year according to german tax law.
- If there is more than one coin trending on any given day (happens regularly) I am allowed to research these coins and pick one based on personal liking.
- I will only buy coins that are available on either Binance or Uniswap
- If the same coin is trending on multiple days, I will just accumulate more.
- I will track every trade and the daily portfolio value in a public Google Sheet document
As of Day 55 the Author has invested $5,300 with a total current portfolio value as of today $4,809.86 (-9.25% ROI). Despite the negative ROI it is important to remember the following:
- Market conditions have been steadily improving over recent weeks.
- The rule is to hold for a full year and sell afterwards. Therefore it is too early to determine the success of this.
- It’s clearly stated throughout that the purpose of this is for degen fun, nothing serious.
Some notable results:
- CFX/ Coinflux – Has the largest single gain to date sitting at 146.2%.
- 49 of the 55 coins purchased are currently in the red.
- Despite 49 of the 55 coins purchased being in the red there has been no major damage with the largest individual drop sitting around 30%-40%.
Blockchain Center recommends to use platforms like Binance or Kraken with low transaction fees and stablecoins like USDT or USDC to deposit funds. The author also recommends researching each coin using tools like CoinMarketCap or CoinGecko to assess market capitalization, trading volume, and underlying technology before making any investment decisions.
To follow this strategy, the article suggests setting up an account on the chosen platform and depositing $100. Investors should then research and choose a new trending coin every day for 100 days, using the aforementioned tools to assess the coin’s potential. The article recommends buying the chosen coin using the deposited funds and setting a limit order to avoid buying the coin at a higher price.
The article also advises investors to create a portfolio to track daily investments and periodically review it to assess performance. The author suggests that even if only a few of the coins perform well, it can lead to a significant return on investment.
It is important to note that cryptocurrency investing can be highly risky and volatile. The article encourages investors to approach it with caution and a long-term perspective, avoid making impulsive decisions based on short-term market trends, and be aware of the risks involved.
Blockchain Center’s experiment provides a detailed guide on how to invest in cryptocurrency using the 100 Dollar Trending Coin Challenge. By following this strategy, investors can potentially earn significant returns, but it is important to approach cryptocurrency investing with caution and a long-term perspective. Doing thorough research and understanding the risks involved in the market is crucial before making any investment decisions.
We will check back with an update at the end of the 100 days but to follow along visit Blockchain Center.
