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Ethereum: My No. 3 Moonshot Pick for 2022

This article is an excerpt from Tom Yeung’s Moonshot Investor Newsletter. To make sure you don’t miss any of Tom’s possible 100x tips, subscribe to his mailing list here.

Countdown to New Years Eve

Source: Filippo Ronca Cavalcanti /

The Christmas presents are barely unpacked and I’m already busy breaking New Year’s resolutions that I haven’t made yet.

Welcome to the holiday season.

But before I get my third piece of leftover cake, I would like to give you a late Christmas present:

My # 3 Moonshot pick for 2022.

An illustration of an astronaut reaching for a floating pastry.

Source: Catalyst Labs /

My No. 3 pick for 2022

Earlier this year I was asked a simple question by the editors here at InvestorPlace:

If I could only buy one cryptocurrency, which one would it be?

Obviously, it should be a tough question. If I could buy 20 I would have distributed my bets Cardano (CCC:ADA-USD), Chain link (CCC:LINK-USD) and Algorand (CCC:SOMETHING-USD) … and then loaded onto as many meme tokens as mine Momentum Master Strategy could emerge.

But just buying one crypto is like being on the ball with charged bases in Game Seven of the World Series.

You only have one try.

That’s why I made my decision ether (CCC:ETH-USD) the cryptocurrency I knew had the best chance of success.

A chart showing the year-end performance of the top 5 cryptos in January 2021.

The coin turned out to be a winner last year. And for those who missed Ethereum, I have great news:

It’s not too late to buy.

The tokenization revolution is here

In early 2021, two competing protocols vied for the top spot in NFT trading.

  • Flow. The backbone of NBA’s Top Shot had gained a 70% market share in NFTs by the end of January.
  • Ether. Early projects like Cryptokitties and Cryptopunks gave Ethereum a head start on digital collectibles, but the protocol lagged behind in corporate adoption.

Fast forward to today and there is one clear winner:


The community-powered cryptocurrency now handles nearly 97% of global NFT trade, according to research by Cointelegraph. Today, the protocol dominates everything from digital art to selling NFT music.

Ethereum’s success has two reasons.

First, the community-run cryptocurrency is surprisingly well managed. Last Tuesday, the Ethereum developers launched the Kintsugi Testnet in anticipation of a switch to a proof-of-stake protocol. A successful transition would put the second largest coin in the world ahead of Bitcoin in terms of technology.

Second, Ethereum has a secret weapon: the virtuous tokenization cycle.

The virtuous tokenization cycle

Question: What do ride-sharing apps and NFTs have in common?

Answer: Both run in positive feedback loops.

While snarky readers may have said “they cost too much,” marketplaces tend to get stronger the more users they have. More sellers mean more choice for buyers, which leads to more sellers, and so on.

Ethereum puts this concept on steroids.

  • Real marketplaces are usually interchangeable. In theory, you could buy a used car at a personal auction and then immediately turn it over and resell it online.
  • Blockchain-based tokens have a higher hurdle. Assets are usually tokenized on a single blockchain, otherwise you could resell the same good on multiple chains.

That makes it difficult for every “Ethereum killer” to catch up. Buying an NFT from rivals Tezos (CCC:XTZ-USD) is also a bet on the popularity of XTZ – if you are already betting on the value of digital works of art, why gamble on the underlying currency? Until multi-chain NFTs become a reality, investors will have little reason to stray from the top dog.

Would you like to tokenize this?

Ethereum will increasingly find itself in unexpected places.

“The end-to-end tokenization of sovereign currencies, stocks, loans, real estate, mortgages, pledges, and related payments and credits is a once-in-a-lifetime opportunity for both entrepreneurs and nimble established businesses,” wrote Jay Clayton of Wall’s Street Journal. “The iceberg above and below the surface is much larger than it was a few years ago.”

It’s a unique change in a generation.

American households currently hold two-thirds of their net worth of $ 162 trillion outside of stocks and bonds. These difficult-to-trade assets, which include real estate (22% of assets), private businesses (9%), and housewares (4%), often trade at high discounts due to their illiquidity.

Tokenizing these assets could mean unleashing huge fortunes. Private companies are typically sold between 3.5-5.0 EV / EBITDA (enterprise value over earnings before interest, taxes, depreciation and amortization), less than a third of listed companies. Facilitating trading with these companies will be a win-win situation for both buyers and sellers.

The risks of Ethereum

However, wagering on Ethereum also comes with some significant risks. So before you reschedule Santa’s sleigh, here are three reasons to limit your investment to an amount that you can afford to lose.

First, Ethereum still has to roll out its “2.0” version. The Ethereum community has been talking about the move to a Proof of Stake protocol for years, but goal posts continue to be withdrawn.

Second, ETH has a “key person problem”. Co-founder Vitalik Buterin used his star power to implement protocol upgrades. But, unlike most publicly traded companies, the Ethereum community doesn’t have a backup or succession plan in case Mr. Buterin leaves his role.

And finally, cryptos only have value because other people think they do. Peercoin (CCC:PPC-USD), Name coin (CCC:NMC-USD) and Primecoin (CCC:XPM-USD) have all seen a decline in their values, despite being among the early movers and shakers in the industry.

Still, Ethereum has overcome those growing pains to remain my only cryptocurrency I can buy. And that makes it my # 3 moonshot for 2022.

An illustration of an astronaut looking at a framed picture of Alexis Ohanian's Monkey NFT profile picture.

Source: Catalyst Labs /

“Why can’t I just save a JPEG from an NFT?”

Last month, Reddit co-founder Alexis Ohanian became a minor NFT celebrity after Twitter trolls copied and pasted his NFT avatar.

“Mine now,” wrote a Twitter user after reposting the picture of a monkey wearing a propeller hat on social media.

Mr. Ohanian’s reaction was unexpected in a community that frequently derided “right-clickers” who save images from NFTs.

“PLEASE! Right-click Save As. Make a shirt out of it. Share it with the world,” he replied. “The original Mona Lisa just keeps getting more valuable every time it is copied and shared.”

The surprising exchange underscores the never-ending battle between new technologies and old copyrights.

In the early 2000s, Napster and other P2P music sharing apps brought the record industry to its knees by making music virtually free. But the same technologies – namely the Internet – would eventually spawn new music giants.

Today, tokenization, powered by Ethereum, has drawn new lines of battle in the world of digital art. And if history is a guide, these new technologies have the power to change the way we view the world.

PS Would you like to learn more about cryptocurrencies? Penny stocks? Options? Leave me a message at or contact me on LinkedIn and let me know what you’d like to see.

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At the time of this writing, Tom Yeung held (neither directly nor indirectly) positions in the securities discussed in this article.

Tom Yeung, CFA, is a Registered Investment Advisor with a mission to make the world of investing easier.

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