If nothing else, cryptocurrency seems to bring new surprises with every passing day. People who follow it religiously know that prices can swing wildly from one day to the next. They know that this month's winners could be next month's losers. Crypto activity in the final week of August 2019 certainly proved the point.
Most of the world thinks of cryptocurrency in terms of Bitcoin and Ethereum. They are the two coins that get all the attention in the news media. That is unfortunate because there are thousands of tokens floating around in cyberspace. Some of those tokens could prove to be very attractive.
At any rate, let us talk about five tokens that surprised the crypto community during the final week of August 2019. Four of them were surprise gainers while the fifth was a surprise loser. As you read, bear in mind that the numbers provided here are not an indication of future performance. This post is for informational purposes only. It is not intended to be advice on how to invest.
1. ThoreNext (THX)
The biggest gainer for the final week of August was ThoreNext. Its THX token was up more than 130% with a press-time price hovering around $9.00. Its impressive performance to close out August made it the 39th most popular cryptocurrency by market capitalization. ThoreNext's market cap currently stands at about $166 million.
ThoreNext is built on Ethereum. It is a project established on the concept of creating a blockchain-IoT ecosystem through which decentralized apps can be launched. In a larger sense, it is also an ecosystem for decentralized organizations. The THX token is the utility token for accessing the ThoreNext blockchain network.
For the record, the platform's ecosystem already includes ThoreCoin and Thorecash, two specialized tokens for facilitating business transactions within the ecosystem. Neither token enjoys either the market capitalization or price that THX enjoys.
2. Oasis City (OSC)
The second-place gainer didn't do nearly as well as ThoreNext, but it still grew by 26% in the final week of August. That token is OSC, the utility token of the Oasis City virtual reality (VR) platform. Oasis City is another platform intended to create a decentralized ecosystem. It is divided into a number of different hubs that could easily be viewed as neighborhoods. Those hubs include shopping, gaming, entertainment, and education.
The goal of Oasis City is to create an environment in which organizations involved in VR can come together to help each other develop projects and share in their profits. How well the profit-sharing concept pans out is anyone's guess. But for the time being, OSC is trading at $0.04 with a market cap of just over $95 million.
3. Egretia (EGT)
Next up is Egretia, a platform designed around developing blockchain games. Its price was up more than 19% during the last week of August. At press time, it was trading at $0.02. It boasts a market cap of more than $88 million and volume in excess of $17.3 million.
What makes the Egretia so fascinating is that it combines HTML 5 mobile technology with game development tools in a blockchain environment. Its founders' stated goal is to build the world's first HTML 5 blockchain engine. They think that if they can pull it off, they will be able to open blockchain game development to hundreds of thousands of developers and nearly every mobile device on the planet.
Egretia is different than many other platforms in that the company behind it has started an educational program to bring interested developers and investors up to speed. This demonstrates that they are about more than making money. They are serious about their lofty blockchain gaming goal.
4. HedgeTrade (HEDG)
The fourth token on our list is also a gainer. That token is HEDG, the utility token for the HedgeTrade platform for cryptocurrency traders. It closed out the month of August with 18% growth and a sale price hovering around $0.75. It was ranked 31st by market capitalization with a total value of just over $216.5 million.
HedgeTrade's name tells us a lot about what the platform actually does. It brings cryptocurrency traders together in an environment that allows them to create blockchain-verified prediction tools. One such tool could be a blueprint for trading pairs on multiple exchanges.
The 'hedge' portion of the name comes into play when traders use the information from their blueprints to help other traders decide when to buy and sell. Their blueprints become retail products they can sell to inexperienced cryptocurrency traders looking for a little help.
5. Bitcoin (BTC)
The fifth and final token on our list is perhaps the biggest surprise of all. It is, of course, Bitcoin. It finished out the month of August at a sub $10,000 price. At press time, its $9500 price is still nearly 3 times what Bitcoin was worth at the start of 2019. But considering that it briefly flirted with $13,000 in July, Bitcoin certainly has been subject to a downward trend.
As you know, Bitcoin was the first viable cryptocurrency on the market. It was created by a developer working under the pseudonym Satoshi Nakamoto. To this day, no one knows the true identity of the person crypto aficionados affectionately refer to as Satoshi.
What makes Bitcoin's August 2019 losses so surprising is the fact that BTC tends to perform inversely as compared to traditional stock markets. When stock markets drop, Bitcoin tends to rise - and vice versa. There is little consensus as to why that didn't happen in August. With all the volatility in the stock market for the month, it's surprising that Bitcoin's price didn't break through the $13,000 barrier.
Three important lessons
Following cryptocurrency prices is quite interesting whether you are a professional investor or just a hobbyist. For those who make their living in crypto though, winners and losers are a big deal. Bet on the right winner and you could make yourself a boatload of money. Bet on a loser and you could find yourself crying in the corner.
We say all that to say there are three important lessons to learn from all of the activity during the last week of August. Here they are:
1. Don't assume Bitcoin is a safe haven
There was a lot of talk in the month of August about Bitcoin's potential as a safe haven. Moreover, there was no shortage of bloggers, reporters, and financial advisors claiming that Bitcoin could take the place of gold as the best safe haven for stock market investors. Such claims were backed up by the normally inverse relationship between Bitcoin and stocks. But as August 2019 proved, that inverse relationship does not always exist.
Bitcoin may very well be a good safe haven in some circumstances. But it's foolish to assume that it is always a good safe haven. Even the most seasoned investors do not implicitly trust gold as a safe haven in all circumstances. Gold has its weaknesses that investors have to learn to recognize and adapt to. The same is true for Bitcoin.
Using Bitcoin as a safe haven requires some common sense. You pay attention to trends in both cryptocurrency and whatever other markets you are invested in. Then you move funds around based on individual performance. Never just assume that any product or market is always going to move in one direction or the other.
2. Market cap does not guarantee performance
No other coin compares to BTC in price, market capitalization, or volume. On the market cap side of things, Bitcoin was worth $171.2 billion at press time. Compare that to ThoreNext's market cap of $166 million. It is 1/10 that of Bitcoin's, yet ThoreNext blew Bitcoin out of the water in terms of August 2019 price growth.
The point here is that market capitalization does not guarantee performance. It can be a strong indicator, but it is not the be-all and end-all when deciding which coins to invest in.
Market cap is a reflection of the number of investors that have money in a particular product and the total amount they have invested. It can be used as a good indicator because it demonstrates either enthusiasm or the lack thereof. But remember, it is possible for a lot of people to be wrong about the same thing. Conversely, it is also possible for only a small number of people to be right.
3. Blockchain ecosystems are hot
The third lesson is a reminder that blockchain ecosystems are hot right now. Three of the top four gainers during the final month of August were platforms designed around the ecosystem concept. This is important to people interested in cryptocurrency for more than just making a quick profit and then moving on.
It is entirely possible that the ecosystem concept is the future of blockchain. While it is true that blockchain serves very well as a basis for monetary systems and individual apps, harnessing its power to create decentralized ecosystems seems to be what the community is most interested in. Anyone looking to invest outside of Bitcoin, Ethereum, and Litecoin should consider looking into a couple of these ecosystems.