Understanding regionality in crypto can give you an edge in the market.
Most investors are so focused on the US, yet some of the best opportunities are lies outside US or you can say international.
Introducing the concept of "regional coins", and how you can use it to make huge gains.👇
Firstly, let's define what a "regional coin" is. It's simply a crypto token that has ties to a particular nation. This tie can be loose (the founder is born there), or strong (it has direct government support). As long as the market views the coin as having regionality.
Let's break down these ties even further:
Loose:
• The founder/team member is from that nation.
• The coin is heavily traded in the region.
Strong:
• The project has active government support.
• The project has local ties to specific organisations/initiatives.
But ultimately, the reason why a coin is viewed as having ties to that nation is less important than the fact that it does.
So why does regionality matter in crypto?
Firstly, coins can be used as a proxy to invest in a specific nation. Crypto is a relatively easy and liquid way to invest internationally vs other alternatives like purchasing international stocks, bonds or real estate.
For example, when Chinese liquidity provisions were announced, many Chinese coins started pumping. $CFX, which is viewed as the "Chinese Ethereum", was a market leader during this period, returning 2,130% over a 2-month period.
Investors used these coins as a proxy to capture upside to a developing Chinese narrative.This example is based on a real economic event occurring.
Knowing which regional coins are synonymous with certain nations can be used to your advantage.
Next time you spot a major economic development, think about IF and HOW certain coins could be affected.
But there are also more trivial reasons why certain coins gain momentum in specific circles.
For example:
In Korea, $APT gained steamed after a huge Upbit volume increase.
There was a meme at the time: 1 Aptos = One Apartment (this was one of the catalysts behind its 500% rally).
This is because the Aptos ticker $APT is short for the word apartment.
If a coin is being traded in a region as a meme, or a hot trend, it can also be considered "regional" (at least for that specific period of time).
$APT isn't a Korean project, but it has inadvertently become synonymous with Korea due to this.
Remember, coins may not necessarily have a direct link to a specific nation, but all it takes is the market to perceive it as so for price action to react accordingly.
So how can you work out what a coin's ties are?
1. Monitor where the token is traded (analyse volume)
2. Track social metrics on @LunarCrush (see what country the biggest contributors are from)
3. Decipher how a project is being identified in your circles (perception is key)
Where a project builds its base isn't just important from an investment perspective, but also for the project itself.
Establishing a strong local base is beneficial in order to expand.
It's easier to build a sturdy house when it has strong foundations.
Although it didn't end well, $LUNA managed to do this in Korea, and was one of the factors behind its rapid adoption.
This was executed through local partnerships such as CHAI Payments.
So, how can you make this thread actionable?
I'll break it down into a few simple points:
1. Be aware of where (geographically) a project is linked.
2. Look for projects with strong regional ties/local bases.
3. When big national economic events occur, consider using proxy investing as a vehicle to gain exposure (or speculate on others intending to gain exposure).
4. Spot regional trends early to find opportunities (use metrics like volume/social data to substantiate this).
Thanks for reading this article ✍️
Follow me 🫡
Like and share🤝
