Early Discovery - The Enormous Potential Of Micro-Cap POS Coins
A Profitable Strategy
We have been discussing micro-cap projects quite a lot over the past week or so. I published my first potential altcoin gem last week, and am glad to say it has since rallied as high as 65%. Taraxa is currently trading approximately 50% higher than when I mentioned it last Wednesday. This is a good sign, but still nothing to get excited about. As I mentioned, I will now increase my holdings on the next correction from current levels.
When it comes to altcoins, and especially micro-caps… you add to winning positions only. The only time you would consider breaking this rule is if the entire market were to experience a massive sell-off or correction. I am once again drawing attention to Taraxa as it is a Proof-of-Sake coin. Not only that, but it offers a rather exceptional APR. The current staking rewards for TARA are in the vicinity of 15%, which even without any price appreciation is already meaningful.
Micro-cap investing is a rather unique niche, due to the risks being so high. However, in a successful scenario, there is no risk at all. Perhaps, some tend to imagine how high the possible gains are but have never actually done the math. Concerning PoS projects, the income-generative aspect is enormous. When we are talking micro-caps, a 100X return is still quite modest. There were many 300X, 400X, and even higher success stories in the previous cycle.
Let’s Look At Some Calculations
For the sake of simplicity, we will look at a 100X return. We will also look at Taraxa, a real-life example. If Taraxa were to experience a 100X return within the next two years, it would have a market cap of between $400 and $500 million. This is still quite small and is usually an indication of survival and relevant adoption, not enormous success. Factoring in the staking rewards at these valuations is enormously powerful.
The dynamic of staking rewards, which are then further leveraged by price appreciation produces a monthly passive income equal to approximately 120% of your initial investment. In a favorable scenario, you can recoup your entire investment, as well as a 20% surplus from a single month’s rewards. This is enormously powerful, not only in terms of wealth creation and income generation but also from a point of risk management.
There is now no chance of future potential loss, as the initial investment capital has been recouped. The fact that you can earn a monthly passive income that exceeds your initial investment is truly impressive, and yet there is more. The actual coins you are now holding are also worth 100X more than when you purchased them. However, in all fairness, if you were averaging in over time that would decrease the ROI.
Further Benefits
Another enormous benefit of securing such a significant form of passive income is to assign some of this capital to future investments. In other words, further investments can become risk-free, as you can choose to utilize some of the “free money” that is produced in the form of staking rewards. This strategic approach can then be duplicated and multiplied many times over. Essentially, all you need is one good win with a fairly decent allocation.
My strategic approach of adding to micro-cap positions during corrections from higher highs works favorably in terms of protecting your initial investment. Buying the dip is only applicable at certain times in the market, as well as for certain sectors. Continuous accumulation via the buying-the-dip strategy in the micro-cap market can get you REKT, and quickly at that. Micro-cap investments require structured and well-disciplined investment strategies.
Final Thoughts
I am busy with my second micro-cap altcoin pick which is also a layer 1 Proof-of-Stake project. I am likely to publish it over the weekend. It also has a tiny market cap and quite a lot going on in terms of the ecosystem and real-world integration. That’s an important aspect of this particular sector… you don’t want to invest in a “ghost chain”. Anyway, that’s it for this one! This particular topic always gets me excited. There’s just so much potential and creativity to work with. Thanks for the visit. 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.
Thank you for sharing your thoughtful own opinion.