Here is how to invest in alts and be safer.
- If you like a coin but it hasn't been trough its first cycle, just pass on it. The risk of it going to 0 is too high. The second cycle is when you should buy it, because there are still a lot of gains to be made, but the risk is way lower.
If you really really like a coin in its first cycle, put like 1- 2% of your portfolio in it so if you lose it you don't lose your hair. There are some people that are going to say that the first cycle is where the biggest gains are made but they dont tell you about the thousands of coins that turned out to be scams, rugs, or just bad ideas. That is called survivor-ship bias.
- Another thing that is very important when speculating in alts is the cycle timing. The only time that you should be buying alts is in the second part of the bottoming year, where we are actually right now with our current cycle, because all alts prices are 85%+ down from their highs and they usually start pumping after the halving. There is no point in buying alts in the actual bull market when they already have gone up 5- 10x from the bottom, because the risk/reward sucks.
If an alt goes from 1 to 50 dollars bottom to top and you buy it at 2.5 dollars you make a 20x, but if you buy it at 20 dollars when you usually hear about new altcoins because they are pumping, you make a 2.5x which for an altcoin potential is way too low.
- If you like a coin but it hasn't been trough its first cycle, just pass on it. The risk of it going to 0 is too high. The second cycle is when you should buy it, because there are still a lot of gains to be made, but the risk is way lower.
If you really really like a coin in its first cycle, put like 1- 2% of your portfolio in it so if you lose it you don't lose your hair. There are some people that are going to say that the first cycle is where the biggest gains are made but they dont tell you about the thousands of coins that turned out to be scams, rugs, or just bad ideas. That is called survivor-ship bias.
- Another thing that is very important when speculating in alts is the cycle timing. The only time that you should be buying alts is in the second part of the bottoming year, where we are actually right now with our current cycle, because all alts prices are 85%+ down from their highs and they usually start pumping after the halving. There is no point in buying alts in the actual bull market when they already have gone up 5- 10x from the bottom, because the risk/reward sucks.
If an alt goes from 1 to 50 dollars bottom to top and you buy it at 2.5 dollars you make a 20x, but if you buy it at 20 dollars when you usually hear about new altcoins because they are pumping, you make a 2.5x which for an altcoin potential is way too low.