How to evaluate if an altcoin is worth investing in

How to evaluate if an altcoin is worth investing in?

Disclaimer: Our content is intended to be used and must be used for informational purposes only. It is very important to do your own research and analysis before making any investment based on your personal circumstances.

Should I allocate part of my capital to this project? I already have Bitcoin, what can I diversify into?

Do these questions sound familiar? That’s perfect, because today we’re going to talk about altcoin, what it is and where to get it!

What are altcoins?

The answer to this question is the simplest possible, the altcoins gather all the corners/tokens which are simply not BTC. So, on the cryptos market, there is the Bitcoin King and the altcoins.

Is it interesting to invest in altcoins?

Spoiler alert, yes it’s interesting, and here’s why:

First of all, as the old saying goes “Don’t put your eggs in the same basket”. The main reason to invest in altcoins when you’re in the cryptos market is that it offers a possibility of diversification compared to Bitcoin. Nevertheless, when BTC falls, the rest of the market tends to fall with it.

The second is that the market cycle of Bitcoin and altcoins is slightly different. Indeed, during a very pronounced bull-run like the one we have seen in recent months, BTC tends to lead the “dance” and is therefore the first to reach a peak. We then see a shift in the flow of capital from the BTC to the altcoins and especially the majors which reach their peak shortly afterwards, such as ETH for example.

Finally, in a market where the BTC monopolizes more than 60% of the total market capitalization, the upward potential of an altcoin is sometimes much higher than that of King BTC in a context of generalized market increase.

Some examples?

What could be better than a few examples to back up what I’m saying?

Over the period from October 21st, when the 12000’s broke for BTC, up till today, the it has achieved a performance of 191%.

This is huge, but if we look at some of the biggest altcoins such as ETH or DOT, they do even better with a performance of 349% and 374% respectively. LINK, takes 140% over the same period, a lesser performance which is explained by the fact that LINK had already reached its ATH before BTC.

How do I get started?

This is the most interesting question! Here it all depends on your approach to investment. Do you prefer to invest for the longer term and based on fundamentals? Or on the contrary, are you more interested in trading with more frequent gains and limited market exposure?

In the first case, you will first have to do your own research according to the following criteria:

Innovation: What the project brings compared to the competition
Development: Is a prototype already available, or soon?
Community strength and support: Is the project supported?
Trading volume and liquidity: Is the token tradable in good condition?
Market cap : More is better

If you answer yes to most of these questions and the project seems disruptive, in the sense that it brings real added value compared to the competition, then you can allocate part of your capital to it.

If you prefer to trade on a shorter term basis, then I would recommend the Binance platform for spot trading and the FTX platform for futures trading. To enter a position, it will depend on your level and strategy, you can do it manually or use algorithmic tools such as the SMART Bots from 4C-Trading.

The automated SMART Bots allow you to expose to the altcoins with no experience needed. Once you’ve set them up, they’ll trade automatically for you 24/7. You’ll never have to stay up, monitoring market movements. No technical analysis skill? Not a problem!

Conclusion

In conclusion, it is obviously interesting to invest in altcoins for those looking for a handsome return. You simply need to keep in mind what your strengths and weaknesses are and move towards investment or trading as best suits you.

 

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