Diving Deeper Into The World Of Altcoins & Micro-Caps
The Treasure Trove
Micro-cap projects that go on to become Top 50 projects are where everyone wants to be invested… but usually only once they arrive! Many desire face-melting pumps but don’t want to shoulder the risk that comes along with the package. Solana was once ranked alongside many other micro-caps that are perhaps still micro-caps to this day. Some have argued that I could not have bought SOL at $0.30. The argument is that CoinGecko lists the all-time low at $0.50. I have addressed this before, but let’s clarify the facts, once again. Firstly, CoinGecko’s statistics regarding any altcoin, only track the project’s price performance from the time it is added to CoinGecko.
Whatever price action has taken place before this point is excluded. Once again, ignorance is projected as knowledge, when in fact it is simply a case of poor research and an impoverished understanding, further compounded by arrogance. Secondly, Solana’s ICO price was approximately 0.22 and proceeded to trade in this range for some time. At that time, Hotbit was the exchange to pick up altcoins before anyone else. This is where I did the majority of my altcoin hunting, despite exorbitant withdrawal fees on certain coins.
Nowadays, MEXC, Gate.io, and KuCoin offer the earliest listings, as well as under-the-radar projects that are yet to be listed on major exchanges. Being able to look back at an early entry looks amazing in hindsight. However, such a decision often appears foolish during the moment of execution… and this is where many potential investors are overwhelmed and fail to act. This is why research is so important… eventually, a conviction will arise, either way. If you are an investor and not a researcher you have deceived yourself.
It’s similar to claiming to be a football player without an understanding of the rules that govern the game. How can you play football without rules? In a similar way, how can you invest in a project, before thorough research, which provides insight and understanding? My altcoin picks are merely unearthing. I bring to light what was perhaps hidden to many. A potential investor should then hold it up to the light of research, to establish if it is indeed valuable. Most Crypto investors don’t do this. They want to be told what to buy. Essentially, they refuse to take responsibility for their investment decisions.
They want to be told what to buy, and they want someone to blame if it doesn’t pan out. Zero responsibility and accountability for what they do with their money. This is a sad reality and gives a little insight into why so many noobs end up getting REKT. Altcoins have always been an extremely risky investment vehicle. Consider then how much more dangerous micro-caps are. The risks are enormous… and very real! However, once a micro-cap gets on the highway, it’s a one-way ticket to ridiculous gains.
Three Important Points To Remember
When investing in altcoins, and especially micro-caps, I tend to open an initial position that is decent, but simultaneously not damaging, were the project to tank. I continue to add to that position on corrections from higher highs, and usually highs that are significantly higher in percentage terms. Some investors continue dollar-cost averaging into collapsing prices… not advisable when it comes to micro-caps. This level of risk management needs to be in place for such a risky asset class. By building positions this way, I protect my entry point, and subsequently, my investment.
Secondly, even though micro-caps see enormous gains early on in a bull market. The real action, in terms of ROI, comes into play in the final three to four months leading up to the typical blow-off top that usually signifies the end of any bull run, but especially when it comes to Crypto. This is where your investment truly multiplies, especially if you were able to enter your position at the very bottom, or as close to the bottom as possible. In terms of micro-caps, it’s more a case of discovering the project long before the general market catches on.
The third and final point to bear in mind is that you have to exit an altcoin position as soon as you perceive a top to be in. Look at Unibright for instance, it was one of my altcoin picks from the last cycle that surged from $0.01 to $4.22. Currently, UBT is trading at approximately $0.06, which is still up 600% from $0.01. However, selling as near to the top as possible, and then buying lower trumps hodling by a long shot.
Remember, many who advocate hodling do so because they don’t trade. If you are a trader, you are able to get a lot more bang for your buck by selling, as opposed to holding. However, every investor needs to make their own investment decisions in light of their knowledge and capabilities.
Final Thoughts
This can be a treacherous road for the ill-prepared, or immature investor. It’s an area that requires strict risk management, discipline, patience, and emotional control. This is something that everyone who enters this space needs to be aware of. This is not investment advice, but my own interpretations and views of the altcoin market. Stay strong, and see you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in me receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
