Most investors, whether they invest in traditional or alternative asset classes, are more than happy to leave 2018 behind in the rearview mirror. The S&P 500 for the year ended down 6.24% while the Bloomberg Galaxy Crypto Index was bear-mauled by a decline of over 80%. Does this mark the beginning of the end for digital assets as a viable asset class? Here are five points of reasoning for why I believe crypto is here to stay and why I am a long-term believer in utility tokens with a real use case such as Alphaslot’s SLOT token.
1. Crypto adoption is already here and strengthening. According to a study from the Cambridge Centre for Alternative Finance, verified users of crypto doubled from 18 million in 2017 to 35 million in 2018, having grown seven-fold from five million users in 2016. The explosive growth in users comes despite the massive declines in digital asset values, suggesting this is no passing fad.
2. 1995 was the start of the internet bubble in equity markets. It peaked in March 2000 and by October 2002, the NASDAQ-100 had dropped 78% from its peak representing US$5 trillion lost in market capitalization. Venture capital funds stopped flowing, leading to the liquidation of many startups that ran out of capital. One bright spot as a result of the crash is that management teams became more disciplined in managing resources and dotcoms with solid business plans and execution not only survived but thrived (think Amazon and Google). There are parallels between what’s going on in digital assets right now and with the dotcom crash. Blockchain/token projects with weak use cases and poor market adoption will be weeded out. Strong projects with real use cases and market adoption will survive and thrive.
3. Many people see the similarities between digital assets and gold as alternative investments. Gold has been prized as a precious commodity since ancient times and continues to be used as a store of wealth around the world. However, the worth of gold is derived completely by individuals and governments collectively using it for storage purposes. In other words, adoption creates value. The more people buy, sell, use and earn crypto, the more value it accumulates.
4. Aside from being an alternative store of value, the utility token flavor of digital asset has, as suggested by its name, additional utility within a project’s ecosystem — such as payment for transactions or gas payable only in its native token. This suggests that the utility token may have an advantage over gold, because a utility token does something other than just store value and look shiny. It would be as if gold received an upgrade and could be consumed or used in a practical/useful fashion. The more utility a token has, in the theory the more value it has and should ultimately be priced into the token.
5. My personal opinion is that blockchain and crypto are here to stay and will forever change our global economy and the way we live. The real question is in which token(s) should I invest? Being a fundamental investor rather than a trader who leverages technical analysis (charts), I focus on tokens from projects that solve pain points and can expand existing business opportunities for those projects. They should have an experienced management team from the relevant industries, a revenue-generating model, a real product/service, a growing user base, actual revenue and expansion opportunities.
6. Recently, Tron and EOS have made substantial investments in blockchain gaming projects (Tron announced a US$100 million initiative to fund blockchain game development in the next three years; EOS invested US$16 million into blockchain game studio Mythical Games). Alphaslot is the only blockchain ecosystem that serves land-based casinos. The reason why Alphaslot has superior long-term prospects and value is that the land-based casino industry is worth US$130 billion annually — almost double the size (US$70 billion) of the global mobile games market.
The Alphaslot project’s initial market is the land-based casino industry and adoption comes through the players playing casino games plugged into the Alphaslot platform, and along the way acquiring new wallet users through the SLOT utility token that players earn just by playing games — over 100 million people visit casinos around the world each year and Alphaslot will be acquiring these self-identified passionate gamers.
The use case of the token drives incredible value because SLOT can be used for in-game purchases that make games more fun and possibly more lucky. The enhanced player engagement leads to increased time on device and thus higher revenue for casinos, of which Alphaslot may take a cut — this is a clear revenue-generating business model.
Alphaslot will grow by distributing its token platform into more gaming machines and expanding its footprint of jurisdictions globally. After casino gaming, Alphaslot will leap into eSports, mobile/online games, consoles and arcades.
The SLOT token use case will also expand as SLOT can be used to purchase and equip NFTs and other virtual assets, and SLOT will be able to transact in retail, dining and hotel environments. Market adoption by users and expanded use case combine to drive the increasing value of SLOT.
The management team is well-positioned to execute the vision as the founding team is comprised of veterans from the casino industry in both games development/distribution and operations, engineering and blockchain research and development.
I believe Alphaslot has all the elements to make the project and the SLOT token a winning formula for investment.