One of the first successful trading strategies I worked out for myself is what I call “Doge to 1-sat”.
This strategy is cheap, long-term and medium risk.
It’s all about buying cheap coins on the DOGE market, then selling them on the BTC market, for 1 satoshi.
Step 1: Work out the value of 1 satoshi
You need to know what 1 satoshi is worth in DOGE, so you can set your price limits properly. It’s a simple formula:
1 satoshi = 1/(Price of DOGE in satoshis)
So if DOGE is selling at 0.00000050, 1 satoshi is worth 1/50 = 0.02000000 DOGE.
You’ll want to make a profit, so you want coins with a DOGE price well below that level.
Step 2: Identify target
For the strategy to work, you must target cheap coins – typically shitcoins – that have a DOGE and BTC trading pair, though not necessarily on the same exchange.
You’re looking for coins whose BTC value almost never moves, but which people buy at 1 satoshi because they hope for a price rise. Even the smallest possible rise – 1 satoshi – would double their investment.
A good example (and one of my favourites) is DIME. It’s listed on CoinExchange (ref link).
The DIME/BTC pair has only moved once since it was listed (as far as I can see) – on 1 January 2018. It went to 2 satoshis.
But look at the volume: 2,886,002 coins changed hands in the last 24 hours on the day I took this screenshot. Those are all “buys”.
So the volume’s good. What about the price on the DOGE market?
During the whole period shown, DIME hasn’t gone above 0.011 BTC, which is just over 50% of the example DOGE price.
That means you’d get an 80% profit on every coin you buy with DOGE and sell for 1 satoshi.
On that screenshot, the current price is between 0.007475 and 0.00789896 DOGE. So you’d get between 150% and 165% profit (i.e. 2.5 times your investment) back when you sell. Nice!
Step 3: Check the down-side
There are three negatives (or risks) to this strategy: changing DOGE prices, the wait and coin death. You can’t do anything about any of them.
When the DOGE-to-BTC price changes, your profit changes. For every rise of 1 satoshi, you lose about 0.0004 off the DOGE side (i.e. if DOGE goes from 50 satoshis to 55, one satoshi is worth 0.018 DOGE). As the price of DOGE rises, you must find lower prices or cheaper coins.
However… that’s only when you’re buying. You’re selling on the BTC market and the price is always the same (1 satoshi), so there’s no difference on that end. Just remember to check the DOGE/BTC price before you buy.
The second problem is the length of the BTC queue. For DIME, the queue when I wrote this was just over 3.8 billion coins:
Do you see the 2-sat queue? It’s almost twice as big. That’s a good indicator that people are buying at 1 sat and hoping for a rise.
The 24-hour volume was 2,886,002. At that speed, it’s going to take 1,325 days (just over 3.5 years) for any coins you add now to sell.
Of course, 24-hour volumes change all the time. And that’s the tough bit: is 2.9 million coins normal, high or low? You’ll have to track volumes to find out. The good news is that the wait for DIME is not 3.5 years: it’s lower.
The third risk is coin death. If the asset you bought gets delisted, you’re screwed. You must keep an eye on delisting announcements for the exchanges and sell quickly if your coin is affected.
On the up-side, delisting doesn’t always mean a loss. I recently had a coin go toes-up on me and sold my holding (on the DOGE market) for a ~10% profit. Nowhere near what it would have earned… but not a loss!
Step 4: Check alternatives
If waiting 3.5 years is too long, DIME also trades on Cryptopia (ref link). You can check the 24-hour volumes and queue there, too. If it’s quicker, it would be worth transferring.
As you might expect from someone who likes this sort of tracking and runs a crypto site, I have a spreadsheet with a dozen or more of the best choices and their 24-hour volumes (some since the last week of February, 2018). Send me crypto and I’ll happily share.
Step 5: Trade
Once you’ve identified a good coin, simply buy a shitload of it, push it into the BTC queue at 0.00000001 BTC… and wait.
If you invested in DIME with the example figures here (at the time of writing), that’s a 2.5 multiplier. Every dollar you invest pays back $2.50. And DIME has a low multiplier – some coins offer 600% returns or better.
Rinse and repeat.