Should Altcoins Even Exist?

How many cryptocurrencies do we actually need? That is the key question. Since today there exist over 2000 cryptocurrencies, according to coinmarketcap data and the number only appears to be growing exponentially. This freedom implies choice.


If you look at this chart from 2014, only Litecoin and Ripple from the altcoins have managed to remain in the top 10. The rest have either faded into obscurity or have become far less relevant today. The extant Crypto Winter has been the longest yet and many altcoins may not survive the ensuing bloodbath.

While certain Altcoins have performed significantly better than Bitcoin when it comes to offering a return on investment. However, there are various factors to consider and if we look at some of the previous trends, some very popular altcoins from a few years ago are now entirely worthless. These are some key pointers when it comes to cryptocurrency trends that most blockchain enthusiasts and cryptocurrency evangelists must pay careful attention to:
  • Bitcoin has never been the best performing crypto on an annualized basis
  • This is the longest crypto-winter since cryptocurrencies came into existence.
  • 2016 was arguably the best year to invest in crypto.
  • Only Bitcoin, Ripple and Litecoin appear in the Top 10 list for nearly all the years.
  • While the greatest total number of new coins were added between 2017 and 2018 (738; 119% YoY increase) the big explosion happened between 2014 and 2015, when the total number coins increased by 633%.
As an investor, the cryptocurrency market is the epitome of turbulent trading conditions. These are some of the investment do’s and don’ts that can help you survive the crypto winter:

Investment do’s and don’ts
  • Do diversify your investments. Investments should never be thought of as being akin to gambling or even a game of poker. It is always better to diversify your investments or you may end up losing everything as investments are merely the law of probabilities.
  • Don’t be impulsive. It is always better to have a strategy even if it is somewhat complex to see consistent returns. It is always prudent to pick up key pointers from your trading endeavours.
  • Do use trading tools. Attacking a market as complex as cryptocurrencies is difficult without the aid of an elaborate set of trading and analytics tools. These tools will help one to respond to market shifts better.
  • Don’t mix and match. The strategies that apply to stock markets are decidedly different from that of cryptocurrencies. The latter markets are more volatile where the prevailing trends are difficult to predict. Conversely, cryptocurrencies can offer significantly more returns than that of the stock market.
  • Do manage risk. Cryptocurrencies being unregulated are prone to pump and dump schemes. It is better to invest in the top 18 cryptos as they are less prone to such schemes. Having a mix of low risk with few high risk crypto investments is a better long term strategy than trying to win a lottery ticket.
  • Don’t follow the herd. A fear of missing out sentiment in a bearer market is often a recipe for disaster. Initially, it is better to invest money that you can afford to lose and then observe the market for better gains.
  • Do focus on what works. Ensure that you build time tested strategies so that your investment can survive the ensuring market turbulence. Investments in cryptos are a skill-set far more than anything else.

Hopefully, some of these strategies would help you garner significant gains once crypto picks up again.

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