Altcoin investing – what to consider

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As an experienced analyst in the crypto space, I’ve seen the market ebb and flow, and I can tell you that while Bitcoin may be a safe bet with less volatility compared to altcoins, the potential for massive gains lies in the latter. However, it’s important to recognize that this altcoin bull market is different from previous ones due to the sheer quantity of new tokens being minted daily.

During the ongoing cryptocurrency bull run, numerous investors and traders are seeking ways to amplify their profits. While Bitcoin remains a popular choice, those who didn’t jump on the bandwagon at the beginning of 2023 may not reap significant rewards. In this context, should you consider altcoins as an alternative for potentially higher returns?

Bitcoin not likely to make huge gains from here

In the past, Bitcoin endured significant criticism from banking and financial establishment figures who often repeated the same allegations against it, suggesting that the cryptocurrency was primarily used for illicit activities. However, Bitcoin has since gained the recognition it merits, and there are now fewer naysayers voicing such opinions.

In the realm of investments, it’s unusual for institutions to engage with Bitcoin ($BTC) given its reputation. However, this trend has been changing dramatically. Institutions are increasingly adding Bitcoin to their portfolios at unprecedented rates. On the other hand, in the cryptocurrency sphere, Bitcoin is merely one among thousands of coins. Despite a potential bull market, it’s unlikely that Bitcoin’s price will surge more than twice or thrice from its current level.

Potential huge gains on the altcoins

Consequently, a significant number of investors have explored the realm of altcoins, recognizing that while it involves higher risk, the rewards could be substantial if they successfully pick the winning ones.

Narratives about earning profits that are 20 times, 30 times, 100 times, or even 1000 times your investment are common. With such substantial returns, it doesn’t require a significant upfront capital to amass wealth and join the millionaire club. The allure of purchasing altcoins is further intensified when these profits are described as “life-altering.”

Small cap altcoins can be highly manipulated

As a crypto investor, I’ve noticed that this current altcoin bull market sets itself apart from past experiences in several ways. One significant difference is the overwhelming number of new tokens entering the market daily. We’re not just talking about dozens or even hundreds; we’re dealing with hundreds of thousands.

As a researcher, I can tell you that choosing a profitable investment from among this group is no easy feat, akin to finding the proverbial needle in a haystack. Even if you successfully identify one with potential for substantial returns, navigating the intricacies of manipulation through pump and dump schemes is a daunting challenge. Moreover, securing sufficient liquidity to exit your investment can be an elusive goal.

Blue chip altcoin – factors to consider

As a researcher exploring the potential of investing in altcoins, I would recommend considering some projects that exhibit “blue chip” characteristics. These altcoins are noteworthy due to their promising use cases, a large team of dedicated developers, significant market capitalization, and potential for long-term value appreciation. Some may even have attracted investment from well-known venture capital firms and boast robust communities. By focusing on blue chip altcoins, you can aim for investments in projects that demonstrate both short-term and long-term potential.

Despite being part of the elite blue-chip class, some cryptocurrencies may still fail for various reasons. This phenomenon is not exclusive to the crypto market but has also been observed in traditional stock markets such as the US one. Once prominent stocks that dominated the indices and were among the largest American companies have either gone bankrupt or faded into insignificance.

Despite all the previous discussions, it’s undeniable that certain altcoins with solid fundamentals will generate substantial returns during this ongoing bull market.

Could it be that you intend to purchase the entire list of the top 50 cryptocurrencies as shown on CoinMarketCap? If so, then it’s reasonable to assume that a few of these selections could potentially yield profitable returns.

Add to winners and cut losers

To boost your prospects for wise investments, it’s strongly recommended to seek guidance from numerous investment experts. YouTube is filled with self-proclaimed gurus, but keep in mind that some receive compensation for promoting specific cryptocurrencies.

As a thorough analyst, I have discovered that by meticulously contrasting various cryptocurrency channels, I am able to uncover a select few platforms where in-depth analyses of top altcoins are frequently shared. Remarkably, some of this valuable information is even offered for free.

In the end, it might not be wise to purchase a variety of the highest-rated cryptocurrencies. The more altcoins you own, the higher the potential cost as you may experience losses on underperforming coins while missing out on gains from your better performing investments.

As a researcher, I would recommend regularly assessing your portfolio of altcoins by comparing their performance against Bitcoin ($BTC). By doing the necessary homework and keeping up with this comparison, you’ll be able to narrow down your choices to a select few top-performing altcoins. If any of your altcoins fail to outperform Bitcoin, it may be time to let go and reinvest those resources into the more successful ones.

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2024-05-21 14:08