There are more people investing in crypto than ever before and this has helped in many ways to stabilize the market. Experts like Robert Testagrossa for example are happy with this new wave of investment, and they are sure that the improved stability and rising prices are behind the increase in investors. One area in particular which has become popular for newbie investors is the alt coin space, and it is easy to see why this would be the case. Alt coins can spike up quickly in price and they can often by low cost to buy. If this is going to be your strategy, here are some tips to bear in mind, and why you need to be careful.
Worthless Coins
Unfortunately there are some worthless alt coins out there which are not really backed by anything except a Ponzi scheme or no project at all. These prices are often pumped through the use of bots on Twitter which wax lyrical about the coin. Once the price is pumped, those in the know get out, and those newbie investors get left holding nothing. Always research any alt coins which you have found before you hit the button to trade.
Dizzying Heights
For BTC to double price right now it needs to go up by $60k, for a coin like VeChain to double in price it only needs to go up by $0.11. This is exactly why we should be careful when it comes to investing in alt coins. The reality is that you may double your cash, but at a price of $0.22 once VeChain doubles, you are still going to feel that there is more room for growth. The result of this is that you don’t sell what you have, despite doubling your money, and instead you may hang on, only to see the price drop again. Always remember just how volatile this market is, especially when those stakes are much smaller.
Going Against the Grain
What you will find with the likes of ETH and ADA is that they will generally move in line with the price of BTC, at least in terms of going up and down. With alt coins however this is not the case and they can often move wildly out of sync with those coins with larger market caps. This means that you can easily get caught out by huge price swings, and that is worth bearing in mind.
Disappearing
We have seen so many alt coins come and go over the years and this could pose a problem for you if you are looking for long term investment. It may just be that the coin which you have picked out for future success, falls foul of the rules or simply doesn’t work. If this is the case you may lose your investment altogether, which of course would be far from ideal!
Alt coins can offer a great place for investment, but you have to tread with care.
