The big market sucks blood, and small mining coins fall out of favor

【Deep Chain Original】

Text丨Yi Xiaodian

The market is sucking blood, and small mining coins are on the verge of death

"The bull market is here, and you can make money by buying anything you want. "

Wang Yan (pseudonym), who checks the price of the currency every half an hour, whispered to himself while holding his phone. He kept swiping the screen, with an unconcealable joy on his face.

Since May, the price of Bitcoin has skyrocketed, reaching a high of $8,343 per coin, the highest point since July 2018.

More than a month ago, Bitcoin was still $4,000 per coin, and it doubled in 52 days, which made the return rate of Bitcoin in 2019 reach 108.6%.

The sudden bull market exceeded everyone's expectations, especially those of the "iron-headed air force" who were doing contracts.

"A loss of 99%", "The feeling of a margin call is amazing", "I almost collapsed in the bull market"... It is estimated that in just one week, the short positions of Bitcoin on OKEx and Bitmex were liquidated for more than 4 billion yuan.

Wang Yan, who was looking for various opportunities in the currency market, neither took advantage of the rising trend of mainstream currencies nor enjoyed the dividends of small mining coins.

“As long as no one is bullish, Bitcoin will continue to fall.” Two months ago, when the price of Bitcoin was trading sideways at a low point, Wang Yan was still worried about how to make “big money” from the bear market.

At that time, most players in the cryptocurrency circle were looking for investment targets, hoping that they could find a dark horse in the wave of cryptocurrency and achieve leapfrog growth in wealth.

Since November 2018, investors have set their sights on small mining coins and started panning for gold.

"Small mining coins" refer to coins with a relatively small market value that are mined through computing power using POW as the consensus mechanism. The characteristics of small mining coins are: small market value, poor liquidity, shallow transaction depth, and no angel investment in the early stage.

"Find the next '100x coin'. As long as you own 1% of it, you will be financially free." Wang Yan studied small mining coins for two months.

Small mining coins have low market value. If a project with a market value of hundreds of thousands or millions can buy 10,000 yuan of chips, it is easy for internal funds to manipulate the mining coin. As long as someone takes over, it will be easy to make money.

There are countless stories of small mining coin investments with increases of more than 100, 1,000, or even 10,000 times.

In 2017, PURA’s price rose by 37,585 times at its peak; in 2018, VRS’ price rose by about 2,800 times in the past two months; TER, which was issued in July 2017, once reached a peak of $5,632 per coin, and its lowest price is currently $0.12 per coin. In 2018, it also soared 169 times in three days...

It is both crazy and exciting, and the uncontrollable greed and desire are infinitely magnified.

In 2018, the speed at which Bitcoin fell exceeded everyone’s psychological defense. The continued downturn of mainstream and platform coins has caused investors to once again turn their attention to “potential” small mining coins.

After the opening of Turtle Coin (TRTL), the price increased to 3 times; GRIN was priced at US$14.7 per coin as soon as it was launched; BEAM increased to 5 times within a week of its launch... Different small mining coins emerge every day.

Subsequently, in April 2019, the influx of new funds led to a turnaround in the cryptocurrency market. However, when external funds entered, they often chose leading projects with strong consensus, such as BTC/ETH/XRP/LTC/BNB...

"After entering the bull market, the growth of small currencies is far less than that of the overall market. " Wang Yan said that he is no longer paying attention to small mining coins.

The situation shows that mainstream coins have surpassed small mining coins, and small mining coins are beginning to fade out of sight.

"There is a high probability that small currencies will survive. The reason why small currencies were popular for a while was that there was a lack of money-making effect in the bear market environment at that time, and the low market value of small mining coins just met the idea of ​​many investors who suffered losses on paper to get rich a hundredfold. " SalmonDealer believes that small mining coins still have a chance, but the chance is still very small.

“Wherever the funds flow, promote the currency”

“I will still take a look at their newly launched mining coin projects. But I won’t invest in them.” SalmonDealer has currently withdrawn from many small mining coin groups.

When Bitcoin is gaining momentum, wise investors will put their money in mainstream coins. The market is showing a situation of "the strong will always be strong".

Compared with hoarding mainstream coins, small mining coins have the possibility of a small probability and high returns, but this is not enough to shake the market position of mainstream coins.

"Bitcoin fell below $6,000", "Bitcoin fell below $5,000", "Bitcoin fell below $4,000", the continuously plummeting prices in 2018 refreshed people's cognition and broke everyone's psychological defenses.

The market is like an eggplant hit by frost, with mainstream coins and platform coins continuing to be sluggish.

In the past, “small mining coins” became popular mainly due to two advantages:

1. There is no pre-mining and coin sale. Coins are mined by computing power competition, and the market is a fair way to obtain coins;

2. The market value is low, and there is a large room for growth.

"Even if Turtle Coin is in inflation mode, it is still undervalued. " In October 2018, SalmonDealer discovered Turtle Coin in foreign communities.

The code ranked in the top 20 of all digital currencies, but its market value was outside the top 1,000 at the time, which made SalmonDealer realize that Turtle Coin had a large room for appreciation.

In November 2018, SalmonDealer started the Turtle Chinese Community.

He translated the TurtleCoin community weekly report and promoted it spontaneously. He said, "Gradually more and more people came to join in, and the project was discovered by more and more people."

On October 24, 2018, the circulating market value of Turtle Coin was $1.75 million after it went online. On April 6, 2019, Turtle Coin increased by 3 times, reaching a peak market value of $8.97 million.

New ideas are always popular, and high acceptance has always been a feature of the cryptocurrency world.

Subsequently, based on these mining coin crowds, different groups launched many projects at the same time, including GRIN, BEAM, AXE, etc., which were launched one after another, and it can be said that there was a situation where there was no one to take over.

The most active period was February and March, SalmonDealer recalled. At that time, there were constant messages in the group every day, but now there is basically no one talking in the group.

“After that, small mining coin projects emerged one after another, which was somewhat similar to the feeling I got from the ICO in 2017. An assembly line was used to push up prices, and those who were in ambush made a lot of money. In the end, no one cared about the project anymore, and the next project would start over again.” SalmonDealer said that after officially launching the Turtle China Community, he never replenished his Turtle Coin positions again.

Small mining coins are coming on strong, but they also face the disadvantages of too shallow trading depth. After all, it is not easy for a project with a market value of one million to buy 10,000 yuan of chips. For example, Axe Coin has increased 30 times, but its market value is only more than 5 million yuan, and there is almost no liquidity.

Participants said that they were able to make profits from participating in early projects, but some subsequent small projects would easily lose half of their profits, or even go to zero.

"I bought some small coins and made some profits, but the positions I allocated were very small, so the profits were all small. " SalmonDealer's position allocation is 80% in BNB and BTC, and the remaining 20% ​​in small currencies.

9 out of 10 small coins fail, and only one will have a relatively high return. SalmonDealer believes that the market is difficult to predict, so wise investors will give their money to mainstream coins.

"We will promote whatever the funds are flowing to, so as not to hinder everyone from making money." Aladdin (the name of the team that screens and recommends small mining coins, here referring to a member of the team) basically stopped promoting small mining coins during the "bull market " and focused on mainstream coins.

Those who play small mining coins are all "veterans"

"In 2017, these small mining coin projects were actually much more powerful than mainstream coins. " Aladdin said that the small coin HXX had increased 60 times in just two weeks, and ERC-20 also rose all of a sudden, increasing 30 times.

At the end of 2017, the return on Aladdin’s small-coin investments was so high that he was shocked. By December, he had no idea how many coins he had.

"The so-called big bosses bought a mining coin with a very low market value, and then hoarded it, and thus became the big bosses they are today." said Liu Dong (pseudonym), who entered the cryptocurrency circle in 2014.

Before Bitcoin and Ethereum became mainstream currencies, they were both small mining coins.

In 2015, when the price of IOTA was 0.001 yuan per coin, Tsubasa Ozora bet 100,000 yuan. After the ICO boom started in June 2017, IOTA reached 36 yuan per coin in December, 36,000 times the initial issue price, with a profit of over 1 billion yuan. When Bitcoin was 1 dollar, Li Xiaolai hoarded 2,100 Bitcoins and made 100 million yuan. And Zhao Changpeng sold his house to hoard Bitcoins...

However, small mining coins are not friendly to "newbies":

1. Many small mining coins are on decentralized small exchanges, and many people find it difficult to find information and do not know how to use them;

2. The transaction depth of small mining coins is too shallow, requiring operators to have strong skills and abilities, and patience to continuously collect chips.

Liu Dong summarized the techniques for selecting small mining coins as follows:

1. The coins chosen are generally popular in foreign communities and promoted by foreign big names;

2. A high code contribution rate indicates that the team is working hard;

3. A reasonable issuance mechanism requires certain algorithms to constrain the currency release cycle so that the currency inflation is lower.

4. The market value is relatively low.

"The mining coin circle is not big, but the threshold is quite high. Many people who have not experienced early-stage investment find it difficult to understand this industry. " Liu Dong said that those who can start a small mining coin are all investment veterans.

Aladdin is planning to promote various high-quality small mining coins when the mainstream coins are not so popular and the small mining coin market has a correction.

"By the end of this year, there will be another wave of small mining coins. " Aladdin said that these small mining coins will return.