Bitcoin is not the only cryptocurrency! There are thousands of cryptocurrency alternatives to Bitcoin available today each with unique differences, functionalities, and purposes. All those alternative cryptocurrencies that are not Bitcoin are known as ALTCOINS, which is gotten from the combination of the two words, alternative coins. for example, we have Ripple, Litecoin, Ethereum etc.
In the earlier days of the digital currency, when Bitcoin splits into two, known as a fork, it was as if money fell from the sky.
Mathematically speaking, when one split in half, it results in two halves. But instead of adhering to that set of logic, in Cryptocurrency, that particular fork resulted in something like one plus a little extra. So while the price of the forked Bitcoin remains at it’s price, the resultant “forked” coin, starts it’s journey in the cryptocurrency world at the lower rung of the ladder. Thus, investors who owns a Bitcoin wakes up the next day with let’s say one Bitcoin Cash for each Bitcoin they owned, and all the wealthier for it.
Now, there are many altcoins all over the cryptocurrency world. To me, it’s not about the almost uncountable number of the alternative crytocurrencies but how far they are fairing in the cryptocurrency market. We all know Bitcoin enjoys the privilege of the first decentralized cryptocurrency but I don’t think that’s enough reason that should determine if other alternative coins should outrun it or not.
One major problem with altcoins is that, so many of them exist, both the strong ones, weak ones, the ones with invalid security models and even the ones struggling to remain a cryptocurrency. Another problem with altcoins is that the progress and regress of Bitcoin is used to measure it’s efficiency.
However, Bitcoin has over the years remain at the fore front of the cryptocurrency market with several other altcoins coming behind. Notwithstanding, there is still need for an investor to harness the opportunity of investing in other coins, other than putting all your coin just in one basket.
Below are the best strategies to employ in investing in altcoins according to cointelegraph;
Invest in an altcoin while it is still in its ICO phase. This will guarantee the cheapest possible coin. If you are venturing into the murky world of altcoin investing the ICO phase is the best start.
Coins literally only have one way to go, and that is up, after the ICO but they can also tumble very quickly and fall to zero. As the coin hits the market though, it can spike and that is your cue to sell. In this way, you can easily profit between 100 and 300 percent.
If there is no immediate spike, aim to get between 50 and 100 percent return before selling.
This strategy works well if you hedge your bets and buy into a few ICOs, don’t put all your money into one basket/ICO.
You can also hold out for a coin to hit the market and avoid the ICOmania. Look for a coin that hits its first dip on the market and take aim at buying; this can even lead to a cheaper buy than the ICO sale price.
The reason a lot of these coins dip when they hit exchanges is because presale buyers and those that received free coins for helping market the ICO are dumping coins on the market.
Do be aware though because this dumping can skew the market cap of the company.
Holding on a little longer can also be beneficial as you watch the new altcoin go through its first spike and dip. Analyze the charts and see how it starts to move against chart indicators such as MACD, Signal and basic technical charting.
This is a more complicated and intensive strategy but also a lot less risky.
Keep an eye on candle patterns, as well as the volume, to see if it is falling or rising. You can also continuously compare the market cap to other similar coins to see if it is over or undervalued.
This method is much more of an intelligent feel strategy; you are assessing the conditions of an asset and determining its direction. It also goes hand in hand with the saying: “Buy the rumor, sell the news.”