The Value of Layer-1 Protocols
In the fast-paced world of cryptocurrency investment, one veteran trader has strong opinions on the best way to secure a profitable portfolio. Scott Melker, a seasoned trader and podcaster, believes that focusing on major layer-1 protocols is a more strategic move than selecting individual crypto projects. It’s like betting on the engines of a car rather than the paint job on it—why bother with the details when the underlying technology is where the real value is?
Infrastructure Over Individual Projects
While it might seem tempting to throw money at the latest NFT or trendy blockchain game, Melker warns that this could lead to trouble. He suggests the safer bet is on the infrastructure these projects are built upon. As he puts it, “You’re going to have trouble choosing what [small projects] are. You should just own the layer-1 and the infrastructure that they’re all built on.” This sentiment highlights the potential turbulence of individual assets amidst the robust foundation of established layer-1 blockchains.
Ethereum: The Market Kingpin
Melker doesn’t mince words when it comes to Ethereum. “Nothing is going to kill Ethereum,” he asserts. Given the platform’s wide array of applications and its upcoming transition to proof-of-stake, he sees Ethereum not just as an investment but as a critical piece of the cryptocurrency puzzle. He believes everyone should have exposure to ETH, considering it a vital asset for future growth.
The Anticipated Ethereum Merge
Mark your calendars because the Ethereum Merge is here! Melker suggests this event could propel Ethereum’s price into the stratosphere. “This is a massively bullish event for Ethereum. I think it will be a better chain, more usable after this happens,” he believes. With predictions of Ethereum soaring to unimaginable heights of $20,000 or even $40,000, the anticipation is palpable. Just imagine—your investment could one day be worth as much as a small car!
Diversifying Your Crypto Portfolio
Currently, Melker allocates about 65% of his assets into crypto. Bitcoin (BTC) dominates his long-term holdings, but he isn’t sleeping on Ethereum. His strategy points to not just betting on one horse but a whole stable, and he makes a compelling case for building a diverse portfolio centered on major protocols. Given his insights, it might be wise to follow suit unless you’ve got a crystal ball for picking individual projects.
