The bitcoin bubble peaked in late 2018 and everyone is asking the same question now, are altcoins worth investing in? A lot of altcoin traders made small fortunes during this massive bull run, but that’s history now.
We all want to know where altcoins are heading next.
The answer to this question is more exciting than you might think. I will share a few trading tips that actually work. How can you drastically reduce your investment risk while still looking for the next big altcoin?
Quick answer
With a long-term horizon, altcoins are definitely worth investing in. Altcoins are crypto companies in a very early stage of development and still lack global recognition. With time and understanding, altcoins will become household investments. Now is an opportunity to research this new technology before it goes mainstream.
Why altcoins will beat bitcoin
It’s hard to believe but bitcoin will eventually be outperformed by a new altcoin with even greater technology.
It’s true, think about it.
When the internet was born there were a lot of companies fighting for the number one spot.
Many of the top companies back then were not even good. They were riding the hype of new technology and the same goes for bitcoin.
I’m not going to dig into the details of how bitcoin and altcoins work. Though, I can for sure tell you that bitcoin is not going to be the best cryptocurrency out there.
It’s slow, can’t handle many transactions and it already had its glory days and earned a good reputation as the number one cryptocurrency.
Here are three simple ideas that will make you a smarter investor today and think again when you ask yourself if altcoins are worth investing in in the long term.
- Most altcoins are only a few years old, some are not even created.
- The crypto space has not yet seen real money from big institutions.
- Do I want to miss this opportunity too?
These ideas should make you interested in researching some of the companies behind your favorite altcoins.
The profits you stand to make in a few years by only picking one of the winners are enormous and you don’t want to be left outside.
There will come a time when the next wave of money starts pouring into the crypto markets.
What I mean when I say “the next wave of money” is large-scale institutions like hedge funds, mutual funds, and insurance companies.
These traditional money giants have definitely not touched the cryptocurrency space yet.
And you don’t have to be a Ph.D. to figure this out.
It’s not difficult to become a smarter crypto investor. But to do this you have to ask the right questions.
Why can’t the large institutions be involved in the crypto markets yet?
The answer to this question is dead simple.
- The crypto market is too volatile
- Unregulated exchanges
There is no traditional money-managing institution that would trust to put their investor’s money at stake in the crypto market.
This is a market that swings 20% up or down in a matter of minutes.
They would also not invest through a broker system that is yet regulated.
If you really think about this for a minute.
The larger institutions are controlling billions of dollars under management. They stay invested most of the time in different markets and positions.
How on earth are they going to control their risk in a market that is:
- More volatile than anything else traded
- Less liquid than anything else traded
When you look at these two facts, you realize that there can be no big money in the altcoins market at the moment. This should also make you understand why the upside potential is so insane.
The great thing about this for us altcoin investors is that we don’t have to stay invested all the time.
We don’t need a large amount of liquidity to get in and out of positions. This is great news, we can basically choose when to invest and when to stay on the sidelines.
Side note: What happened to the great internet companies after the introduction of institutional money?
That’s right, they literally exploded in growth.
This is what we are waiting for to happen in the crypto market. It’s only a matter of time before there is a way for hedge funds and mutual funds all over the world to start entering the coins we’ve already purchased.
I think you start to see a picture here, but let me convince you even more.
Altcoin investment tips that actually work
To go back to the example of early internet companies and cryptocurrency.
This might be one of the best opportunities in a very long time.
How often do we get to follow a new technology from baby steps to adultness?
Well, you might have missed the internet boom, but altcoins are here to give you another chance.
How do you go about investing in your favorite coins?
This answer is very simple and you should apply it to your investment strategies immediately.
I call it the 10/10 formula.
How it works is very straightforward.
You take your total amount of risk capital and divide it by 10, then divide this piece by 10 as well.
Did you see what we did there? We just reduced our investment risk per altcoin to 1%. Here is an example to easier understand:
Totalt risk capital = 10.000$
10.000 / 10 = 1000$
1000 / 10 = 100$
| Total risk capital | Divided by 10 | Divided by 10 |
| 10.000$ | 1000$ | 100$ |
The question, are altcoins worth investing in, is not really the question we are looking for, is it?
The question we should ask instead is:
Are altcoins worth the risk?
When you view the altcoin market this way, everything changes.
The reason why most crypto investors fail and lose money every year is that they are investing too much money and they have too short of an investment horizon.
You can see why this would be a problem when the market starts swinging up and down 20% in a matter of minutes.
Most crypto traders and investors can’t handle that.
The good news is that everything is about to change for you.
The way you win by investing in altcoins is you first reduce your risk with the 10/10 formula. Then you extend your investment horizon longer than most of the other traders.
By doing this you are outside of the direct investment risk from daily and weekly market moves and the second great thing about this is:
You can invest in more altcoins.
Not only have you reduced your risk, but you have also opened up the opportunity to invest in more coins.
This is an investment strategy you can start using today, and research even more altcoins.
Are you looking to become a skilled crypto trader?
Check out our detailed crypto trading guides in our educational center.
You will learn new strategies and how to read charts in real-time.
When are altcoins worth investing in?
If I gave you a time machine to go back in time to 2009 when bitcoin was first created and launched onto the blockchain.
How many coins would you purchase?
Probably a lot of them.
Me too.
But that is out of the question, even though it’s amazing to dream how great your life could be if this was possible.
What if I tell you that this is still possible?
Would you believe me? Maybe not, but let me explain what I mean by this.
Considering cryptocurrency is a new technology and we can all agree that only a small % of the population knows about this new amazing tech.
The wonderful thing that happened to bitcoin from 2009 to 2018 was that it got recognized.
Enough people heard about this coin that everyone was talking to the extent that they were willing to bet money by purchasing it.
Here comes the million-dollar question.
When do you think this will happen to some of the altcoins out there?
Good question, I know.
Let me make you a smarter investor right now, so read this next piece twice.
During the internet bubble many of the great companies we have today like Apple and Google were not the big winners.
How come?
They were still not recognized as good companies!
The same goes for some of the altcoins in circulation today.
What’s so inspiring about this fact is that you still have the opportunity to pick among some of the winners of this up-and-coming technology.
And the question remains.
When are altcoins worth investing in?
With this knowledge, it’s safe to say that right now. As long as you know how to invest.
Cryptocurrency is a pretty decent bet on an awesome new technology that has a lot of room to grow.
The trick is to think back to the internet bubble and ask yourself how you could have made money back then.
Then translate that to cryptocurrencies.
To be a successful altcoin investor you need to change the old investment approach that made you lose money.
Here are three simple tips that actually work and will help you become a better crypto investor, starting today.
- Increase your time horizon by a few years
- Use the 10/10 formula to lower your overall risk
- Use the 10/10 formula to make more bets
If you do this.
You will be different from 95% of the crypto investors and we all know that difference is a key ingredient to succeed in any market.
Play around with these new sets of skills and ask yourself again, are altcoins worth investing in?
When to not invest in altcoins?
You need to have a really good reason not to invest in cryptocurrency. Here are some easy guidelines to follow when altcoins might not be the best investment for you.
- You don’t have risk capital
- You can’t have a long-term investment horizon
As you see, the only reason not to invest comes down to these simple points.
When it comes to risk capital, you don’t need 100,000$ to start investing and make money in the crypto market.
500$ dollars can go a long way to start with. When you start making profits you can spread this money out even more.
You don’t need your calculator, but how much money could you have made with 500$ in some of the successful internet companies?
Interesting thought right?
The key takeaway from this part is that whoever you are and wherever you are, it’s almost always a good bet to invest in the crypto market.
By now you should have a decent amount of new insights and some very simple but robust crypto investment strategies.
Remember that you can change your investment approach if this is what is really important to you.
With the right mindset and the right strategies, you can make a lot of money from good altcoin investments.
Conclusion
Are altcoins worth investing in? With these new high-level investment tips, you can start looking for new crypto opportunities right now.
You now know how to reduce your investment risk and at the same time invest in more coins. That’s a real trading skill.
The trick is to step outside of your old investment approach and adopt some of these simple techniques explained in this article.
Follow these steps and see how your crypto investments change.
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Altcoins have more room to grow and new technology is implemented every week.
Not always. Don’t buy an Altcoin just because of its price but a lower market cap is sometimes a huge opportunity.
There is no specific time of the year that will give you an investment edge. Focus on the current market conditions.
Around 8-12 Altcoins will spread your investment risk. You also diversify your portfolio.
If you have risk capital and time on your side it may be a very good time. The current market conditions will change.