Investing in Altcoins. The crypto bull market is gaining steam, and many traders and investors are trying to maximize their profits. While Bitcoin could be a solid investment, you could not get the most out of it if you didn’t get it in early 2024. Could those returns be achieved by investing in altcoins?
Bitcoin Unlikely To Gain Much From Here
Despite the initial backlash Bitcoin faced, when critics largely hailing from banking and traditional financial institutions repeated the tired old line that $BTC was only good for criminal activity, the cryptocurrency is now gaining the respect it deserves, and its detractors are dwindling.
Even though it has never been viewed as a conservative asset, institutional investors are buying $BTC at an unprecedented rate in the investment industry. Bitcoin is only one coin in the vast universe of cryptocurrencies; even if its price experiences a phenomenal bull market, it will likely not rise more than two or three times its current value.
Potential Huge Gains On The Altcoins
Consequently, many investors have tested the waters of the cryptocurrency market. While the potential for gains is enormous if you bet on the right ones, this is much further out on the risk curve.
There are many stories of 20x, 30x, 100x, and 1000x. The second set of benefits makes becoming a millionaire with a relatively little initial investment possible. Claims of “life-changing” profits only increase the allure of investing in alternative cryptocurrencies.
Small Cap Altcoins Can Be Highly Manipulated
But it’s worth noting that this altcoin bull market isn’t like others. The sheer number of unique tokens circulated daily is staggering—hundreds of thousands, if not thousands, of people.
Investing in Altcoins: Finding a needle in a haystack to choose a victor from among those would be like finding a needle in a haystack. The sheer volume of manipulation occurring here in the form of pump-and-dump schemes makes it difficult to navigate, and liquidity to exit can be scarce, even if you choose one that will generate several hundred percent returns.
Blue Chip Altcoin – Factors To Consider
In this context, “blue chip” altcoins are those that, fingers crossed, have real-world applications. Their market valuations are high, they may have received respectable venture capital funding, and unlocks don’t happen every week but rather every year. They also have a significant number of developers working on them. Possible additional considerations include a large and robust community, among others.
That said, there will inevitably be blue chips who don’t cut. Even in the United States stock market, formerly dominant corporations that were once among the largest in the country have either gone bankrupt or become largely forgotten. Cryptography is going to be no different. It is indisputable that, at least during this bull market run, some of the cryptocurrencies with stronger fundamentals will experience significant gains.
Add To Winners And Cut Losers
Seeking the counsel of numerous knowledgeable individuals in the field can greatly improve your odds of making sound investing decisions. Many people claim to be “influencers” on YouTube, but you should know that some receive payment to promote specific cryptocurrencies.
But if you look carefully enough, you may find a few top channels that routinely discuss the top cryptocurrencies in great detail, and sometimes, they even give this information out for free.
Lastly, investing in multiple highly ranked cryptocurrencies might not be the best move. The opportunity cost, in which you risk losing money on less promising altcoins to fund your gains in more promising ones, grows in direct proportion to the number of cryptocurrencies you purchase.
You may narrow your options to a handful of the best-performing cryptocurrencies with little research. Always keep track of how your cryptocurrencies stack up against $BTC. They aren’t valuable unless they outperform Bitcoin. Separate the pieces and put them in your winning stack.
