This Crypto Chain is Red Hot

It's high risk, high reward in crypto land....

March 29, 2024

1,033 Words | 4 Min 18 Sec Read

The famous Shiba Inu meme coin, Dogecoin, placed on top of a $50 bill.

Welcome to another issue of Passionate Income.

Today we’ll be discussing one of the hottest opportunities in crypto.

Let’s dive in.

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If you’re paying attention to crypto, you know the market is red hot. And if you know anything about crypto, you know there are multiple ways to invest.

From meme coins to NFTs, the rabbit hole goes much deeper than just buying tokens like Bitcoin or Ethereum.

In fact, while the top 200 or 300 largest tokens can be purchased directly on an exchange like Kucoin or Binance, some of the largest opportunities lie in smaller tokens that are not listed on centralized exchanges.

Instead, they are launched on specific chains like Avalanche, Solana, etc.

Admittedly, many of these projects are extremely high risk.

As usual, nothing in this issue should be interpreted as financial advice.

What we will be talking about today carries much higher risk than investing in a $1 trillion asset like Bitcoin. And because of that, you should assume taking action on anything we discuss today could result in your losing as much as 100% of your investment.

With that out of the way, if you're a “crypto degen,” odds are you're familiar with buying micro-cap and low-cap projects on individual chains.

While these projects are high-risk, they also offer some of the highest rewards in the entire industry. In fact, while most experts agree it’s unlikely Bitcoin will double from here (which would put it at nearly $140,000 USD), with these much smaller projects it’s possible to earn a 100X or even 1000X return.

And because of that, it’s possible to make small bets - for as little as $5, $10 or $25 - and turn them into a nice payday. Like ​this guy​, who put $1,800 (not a small bet) into $WIF and turned it into $11,000,000.

So, in today’s issue, I thought we could discuss one of the hottest chains where degenerate crypto gamblers are making the biggest returns right now.

Meet: Base

If you’re not familiar with it, ​Base​ is a brand new Ethereum Layer 2 launched by Coinbase. As you may or may not know, Coinbase is the highest volume and most respected crypto exchange in the United States.

I mention Coinbase's status for multiple reasons.

First and foremost, when a beginner comes into the industry, it's virtually guaranteed they do so through a centralized exchange like Coinbase. From there, if they want to make high-risk, high-reward investments, they would have to export their tokens into a private wallet (which allows them to transact on individual chains outside of Coinbase).

With that said, centralized exchanges don't like when people buy tokens and move them off the platform. Why?

Easy: Money.

Once a token leaves an exchange, the exchange doesn't earn any money on future transactions.

So, to address this, Coinbase launched its own chain where people can build, launch, and invest in tokens without leaving the Coinbase ecosystem.

If this concept sounds familiar, that’s because it is.

In September 2020, Binance – which at the time was the largest exchange in the world – launched its own Binance Smart Chain (BSC) for the same reason.

As of this writing, the token underlying the BSC chain – $BNB – is the #3 largest cryptocurrency in the world.

Same with $CRO, which exchange Crypto.com launched in Nov. of 2018. While $CRO never grew as large as $BNB, it still ranks among the top 35 crypto tokens on the planet.

Point being, when a massive exchange launches its own token or chain, that’s something you should pay attention to. Why?

Because if Base follows in the footsteps of Binance’s Smart Chain, there’s a high likelihood it will become one of the largest and most highly used chains, second only to Bitcoin and Ethereum (and maybe Solana).

And because of that, massive liquidity - to the tune of tens of billions of dollars - would flow into the tokens hosted on Base chain.

Second, the United States is the wealthiest nation on earth.

To the point that, despite countries like China having a much larger population, equity markets in the United States are dramatically larger than either China's or Japan's (which come in at second and third).

Who cares?

If Coinbase is the leading centralized exchange in the United States, and the majority of liquidity that’s going to flow into crypto is going to come from the US, Coinbase's Base ecocystem stands to be the #1 beneficiary.

Mainly because Coinbase is going to do everything they possibly can to funnel users into the Base chain (so they can continue to earn money on trading fees instead of having people move their tokens to an outside chain).

With that said, all of this is hypothetical.

If Bitcoin crashes tomorrow, this entire thesis goes up in smoke.

On the flip side, there are some very smart and very wealthy people betting on the above situation playing out. And if that happens, it will be a boon for crypto projects hosted on Base.

💡 Takeaway: The fact Coinbase is the #1 crypto exchange in the world's leading liquidity supplier (the US) paints a bright picture for crypto tokens hosted on the Base chain.

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