IS IT BETTER TO INVEST IN UP AND COMING CRYPTO PROJECTS, THE BIG COINS, OR A MIX OF BOTH? The short answer is, it depends on whether your primary purpose of investing is to build your wealth, grow your wealth, or preserve your wealth and your overall investment strategy. Let me explain what all that means below: BUILDING YOUR WEALTH ($0–$100,000) If you’re trying to make your first riches from crypto, you would be looking to invest in projects with the potentials to give you the highest possible returns on your investment. Though the big coins with large marketcap still have lots of room to grow, it is the up and coming (new and low marketcap) coins that will give you those much desired 10x to 1000x returns. Therefore if I were looking to make my first money in life through crypto, I would invest in up and coming coins that have good "fundamentals" 👉 (https://cryptosorted.info/how-to-perform-a-cryptocurrency-fundamental-analysis-all-by-yourself/). Why? because they will give me the highest possible returns on investment (ROI) than the big coins. The risk with these classes of coins is higher, but if you do your research and pick good projects, I am confident you would be happy with the result after a few months or years. GROWING YOUR WEALTH ($100,000–$1 million) If you have made some money already and looking to upgrade your finances then you would be investing in a mix of the up and coming and the big coins with the greater allocation of your capital going to the big coins. This way, while the up and coming coins are helping to increase the value of your investment exponentially, you have a secure position in the big coins. Even though the big coins gives you far lesser returns, you’re comfortable in your position because they’re less volatile and risky than the up and coming coins. PRESERVING YOUR WEALTH ($1 million - ∞) However, if you have made your wealth already and looking to cryptocurrency as a way to hedge against inflation and preserve the purchasing power of your money then by all means you’re investing 100% in the big coins like BTC, ETH, BCH, etc. This is because these coins are less likely to disappear than the up and coming ones and less volatile too. So there’s a near-zero risk of you losing all your money invested in them. At the same time, they’re volatile enough to give you some really nice returns (2x to 10x) on your investment in the next few months or years ahead. CONCLUSION Develop your investment strategy around your unique financial situation and needs. Overall, the best strategy is to invest in a mix of up and coming projects and the big coins in a ratio that you’re most comfortable with. The only exception is those with only between $1 to $1000 in their name to invest. The big coins will not help you become rich with this tiny capital to start with. Thus the best strategy for them is to invest in carefully selected up and coming projects. #Cryptocurrency
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2 comments
Very helpful actually, and I am going to check out your fundamental analysis post. Thanks.
Good post! But I wonder how many of us are in the third category? (Certainly not me!) I totally agree with this: "Overall, the best strategy is to invest in a mix of up and coming projects and the big coins in a ratio that you’re most comfortable with." For me, that means I only mess with coins in the top 100 based on market cap, but that needs revisiting, as it may be a bad idea.