Which "digital currencies" can survive this cold winter?

Recently, some readers have asked me what I think about certain coins other than Bitcoin and Ethereum at the moment. Before I share my opinion, let’s look at the current operating conditions of the general industry.

When the epidemic first broke out, the country had to impose lockdowns on provinces and cities according to the severity of the epidemic in order to strictly control the spread of the epidemic. The industries most affected by the lockdown were the catering and service industries.

Although this call has attracted great attention from the country, and these companies have received funding from banks and gradually alleviated some of the crisis, more unknown small and medium-sized enterprises in the industry may not be so lucky.

In provinces and cities that have resumed work, we only need to walk on the streets and look at the small stalls and shops we used to patronize, and compare the current business conditions with the situation before the epidemic. The number of people who come to eat in a week is now less than the number of people who ate in a night. In the city where I live, the two small shops that I used to like to go to the most now have only the boss as the whole staff, who is also the chef, cashier and waiter.

Poor business and layoffs are not only a microcosm of the catering industry, but also a microcosm of many other industries.

Under the influence of the epidemic, many companies have been faced with a situation where they have no orders to take and no business to do. Without income, companies can only rely on their own cash reserves for support. The more cash a company has, the longer it can survive.

When most competitors in the industry are forced into bankruptcy and liquidation due to cash flow, the remaining companies will be the only survivors after the industry recovers, and these survivors will also be the final winners, and they will divide up the industry's market share after the industry recovers.

This logic applies not only to enterprises but also to the digital currency industry. In the field of digital currency, the long-term development of any currency depends on the continuous development and operation of the team, and the continuous development and operation of the team consumes a lot of cash flow.

In the current global pandemic, not to mention the popularization and application of emerging technologies such as blockchain, even the popularization and application of mature technologies will be severely affected by the epidemic and will shrink or even decline.

Therefore, it is impossible for the industry and the public to invest a large amount of money in the blockchain industry at this time. Without the investment of funds, this emerging technology itself is not yet mature, how can it generate income? Without income, practitioners in the blockchain industry can only rely on consuming cash flow to maintain their own operations and development.

So now when we look at the various types of digital currencies, there is only one criterion for judging: for projects whose functions are not yet mature and complete and need to be continuously developed before they can be put online, we must see whether the project team has enough funds in reserve. Without enough money to "survive the winter", no matter how good the technology is, it will probably be killed by the flow of funds.

Other factors, such as the rise and fall of currency prices, team background, and technical strength seem insignificant.

Therefore, considering the existing digital currency projects from this perspective, we will find that only the teams behind some large public chains have sufficient funds to survive this cold winter.

Therefore, I suggest that investors at this time sell various small currencies if they are looking at long-term investment, and only hold a few mainstream currencies.

Today's Fear & Greed Index (FGI) is 10

Compared with yesterday's 12, the degree of fear has intensified. The FGI index is inversely proportional to the market state, 0 means "extreme fear" and 100 means "extreme greed".

Global Blockchain Index (GBI) 7111.21

The GBI index reflects the macro trend of the blockchain asset market. The peak index of the last bull market was 22570. The better the market conditions, the higher the index.

Risk warning: Investing involves risks. The content is only personal analysis and is for reference only. It does not constitute investment advice. Maybe what I said is wrong, so you have to be careful.