Altcoins are cryptocurrencies other than Bitcoin. An altcoin is just a fancy term for any cryptocurrency that isn’t bitcoin. There were almost 9,000 altcoins in existence as of March 2021 and they all have different features so it’s hard to tell which one will be the next big thing! Let’s take close look at Altcoin investing and trading.
Altcoins are cryptocurrencies other than Bitcoin with some defining characteristics or properties like smart contracts or low-price volatility. Many who get involved quickly find themselves overwhelmed by how difficult each coin is unique from another on key aspects like price stability and market cap making it impossible to predict what might become popular next.
Altcoins are simply alternative cryptocurrencies to bitcoin, which are considered worth investing in, or at least holding onto for the longer term – there’s a lot of features associated with Altcoins apart from just being used as another cryptocurrency. These features can be useful, such as smart contracts, but they may not necessarily be what people choose to use them for – even though it could make altcoin prices much higher.
Altcoin investing and trading
Although trading altcoins can be a lot of fun, it’s not worth risking your own capital unless you know what you’re doing (which is why this article exists). If you don’t want to take my word for it, that’s fine; however, keep in mind that there are plenty of people who do end up losing all of their capital by investing/trading in altcoins as they have no idea about what they’re doing. The most important aspect when making attempts at turning a profit from an alternative coin is being able to identify market opportunities – which will come with experience and practice. It’s also worth noting that if someone tells you something like “this coin is going to the moon” then chances are that it isn’t.
Here are 11 key methods for creating a winning portfolio:
- Invest in coins that have good projects/ideas behind them – If you’re unsure about the idea then research the developers and make sure it makes sense for them to be doing what they’re doing when considering their background & current employment situation. The more effort they’ve put into their coin, generally means that it’s worth investing in (although there are exceptions). You can identify this by reading white papers, looking at roadmaps & reading forum posts (Reddit is one of the best resources).
- Hold onto coins with low market caps whenever possible – although small market cap coins can sometimes die out completely, these are quite rare so it could be worth holding onto these coins for longer periods of time.
- Make sure you’re always updating your portfolio with the latest developments regarding each coin – this is an essential part of keeping track of which coins are worth investing in and which ones aren’t.
- Try to choose a few altcoins that fall into different categories (such as infrastructure, privacy etc.) so that there’s less competition in any given market and therefore more potential profits.
- Research & monitor trends before making purchases – if you’re not confident enough or don’t have enough money to invest, then it might be best to avoid making purchases at all costs.
- If something sounds too good to be true, then it probably is – no one knows how high/low a coin will go, so it’s best to stay on the safe side and avoid being scammed.
- Google everything – this may sound obvious but there have been a lot of coins that I’ve invested in which have turned out to be scams/ponzi schemes etc., and they’re usually quite easy to spot if you know what you’re doing (researching will help with this).
- Only invest what you can afford to lose – no matter how nice someone is or how much proof they give you of their claims, don’t invest anything that you won’t be able to live without.
- Don’t believe anyone who says crypto isn’t risky – This article has tons of information about how risky cryptocurrency trading can potentially be and although it’s possible to make money from it, you also run the risk of losing (this goes for everything in life). It’s risky because there are things like wallet hacking and other scams that can cost people thousands or even millions.
- Don’t invest more than you’re willing to lose – this is something that I’ve said before but will reiterate here as it seems to be one of the most commonly overlooked pieces of advice when it comes to trading altcoins/cryptocurrency in general. Just because your investment is small/worthless doesn’t mean that you should gamble with it; if you don’t understand something then do further research until you do. If investing in cryptocurrency makes you feel uncomfortable then avoid doing so at all costs – there’s no point in losing mental (let alone real) wealth.
- Don’t listen to anyone who tells you how much a coin will go up/down by – no one knows what the price of anything is going to do, and by telling people that they “have to invest before it moons” then you’re helping them make money off your naivety or greed; don’t be fooled by these types of statements (the only way someone has any idea about the future price is if they have some insider information). Although nobody should be listening to anyone who’s making predictions like this, there are likely many more people than you think that are falling for these tactics.
