While I was in Frankfurt for the DASH-sponsored “Digital Finance 2017” conference, I met with controversial and outspoken former German Hedge Fund manager legend Florian Homm. He has been following the growing microcosm of the Blockchain and told me he had already a suggested a small allocation of selected Crypto projects in his book “Erfolg im Crash” over a year ago, DASH having been one of them. He interviewed me for an update in his subscription only newsletter, from which he allowed to quote, specifically on DASH and the most recent developments in the community. I was very impressed how deep Homm is into the innerworkings of the Crypto Universe. Along DASH, he also had mentioned IOTA for instance very early on, when hardly anyone had heard of the project. He was also very well aware of the latest turbulences and conflicts in the Bitcoin community and shared my scepticism. He is no big fan of Bitcoin, whose technology he considers as antiquated and he even prefers the Bitcoin Cash fork to it, although he stresses, that both Bitcoin and Ethereum currently provide the best liquidity for entering the market.
“What few market participants seem to be aware of: The conflict beteween Bitcoin Cash (BCH) and Bitcoin (BTC) is dividing the fan base. The underlying technology is basically the same. The BTC Community favors a very decentralized system and puts lets emphasis on fast and cheap transactions, while the BCH Community is more focussed on the payment systeme being viable and less on decentralization. The discussions can lead to hard forks, creating new currencies. This ideological war between the different factions could deter new entrants into the market and create uncertainty.“
He is also very clear on the current bubbly market environment:
“The current hype around cryptocurrencies reminds of the exagerations seen during the New Economy Boom. Back then investors flocked like crazy in Initial Public Offering (IPO). In the Crypto World, they call it Initial Coin Offerings (ICOs). Now even nightclubs in the USA emit crypto tokens and Paris Hilton is considered and influencer. Every third grade marketeer offers seminars about cryptocurrencies and yet knows next to nothing about the subject. The market is further influenced by chinese speculators who circumvent capital controls with Bitcoin and company.“
Homm thinks that only very few of the over a thousand Blockchain projects will survive the next serious healthy correction and currently recommends only a very selective speculative allocation of about 3% of the total portfolio to his readers. Among the projects he sees a potential long term projects who could dominate the market in 5 years, Dash stars with a whopping 40%:
“40% Dash, in our opinion the better Bitcoin on every aspect. Dash is far better structured technologically. Transaction fees are far lower. 10% of the newly mined coins are allocated for marketing and development. There have been no contentious forks in the past, as with Bitcoin (Bitcoin Classic., Bitcoin Cash, Bitcoin Gold etc.).“
He is particularly impressed by the high degree of professionality of the team and recommends his readers to watch the London Conference Q&A. Homm thinks that DASH might spread in usage across emerging markets like Venezuela or Black Africa.
He weights Ethereum (20%), IOTA (20%), and Bitcoin Core and Bitcoin Cash with 10% each, with the following disclaimer:
“We are no Fans of Bitcoin, but those two currencies are dominating the public perception of what represents a cryptocurrency at the moment.“
His final warning advice regarding risk management are worthy of consideration for every investor:
“You should only invest after having done your own research. Cryptocurrencies are no easy investment vehicles. If that was not so, the better cryptocurrencies with promissing long term prospects would be much better established and expensive and there would be not much potential for appreciation left. You have to have a strong stomach in this environment. A cryptocurrency can easily drop by 30% or more in a single day. Therefore we hold enough Cash at hand to increase our position after a correction.”