Here’s a little secret that no one dares to tell you: most of you will lose. Yes, I said it. After working in the cryptocurrency industry for over four years and seeing two full market cycles, I can confidently tell you that 97% of altcoins will destroy you if you blindly hold on to them.
In this post, I will explain in detail why so many investors end up getting crushed by these volatile assets, and more importantly, I will show you how you can navigate these waters and make a fortune.
5 Reasons Why Altcoins Can Beat You
1. Lack of basics
The biggest mistake many crypto investors make is getting involved in altcoins that have little or no real value behind them. Any strong crypto project relies on solid fundamentals: a working product, clear use cases, strong community support, and a functioning token economy. But many altcoins that surge during a bull run lack these crucial fundamentals.
2. Unlock and mitigate codes
One of the most painful realities of altcoin trading is watching your investments slowly lose value due to token unlocks. These are periods when the initial supply of tokens is gradually released to early investors or project founders. This causes the total supply to be diluted, often leading to a sharp drop in price.
Look back at previous bull cycles and see coins like The Sandbox (SAND), Algorand (ALGO), and Decentraland (MANA). They may have grown in popularity, but they are now worth a fraction of their peak prices. Why? The tokens are opening up. The “buy the dip” narrative is circulating, but in reality, it’s a way for insiders to exit their positions while retail investors are left holding the bag.
3. Market saturation
The cryptocurrency world is filled with thousands of projects, many of which offer nothing new. In a saturated market, it is extremely difficult to separate the legitimate projects from those that are destined to fail. Competition is fierce, and while some coins will inevitably succeed, many others will fade into oblivion.
4. Low float, high fully diluted value (FDV)
Many investors are attracted to coins with a low market cap that promise huge gains. However, a coin with a low market cap and a high static book value is often a trap. The static book value represents the total market value assuming all coins are in circulation, and if this value is relatively high compared to the current market value, it indicates that the price may be artificially inflated.
5. Advertising trap
Another major reason altcoins fail to deliver long-term value is that they focus too much on hype and not enough on actual product development. Many altcoin projects will use hyperbole
How to win this up-and-coming race🚀
Now that you know why most altcoins are traps waiting to catch unwary investors, here's the good news: you can win during this rally - if you're smart about it.
1. Invest in Bitcoin during bear markets
If you want to reduce risk, invest in Bitcoin during bear markets and hold it until it starts making higher highs, and start slowly diversifying your portfolio into other assets.
2. Take profits early
One mistake that even seasoned investors make is holding their assets for too long. Remember that in the last bull run, many of the top 100 altcoins peaked before shedding 90% of their value in a bear market. Always make sure to take profits at regular intervals. Don’t wait for your portfolio to decline.
3. Hold stocks and buy stocks on the dip—but only for the top alternative stocks.
The “HODL and buy the dip” strategy works well with Bitcoin and some leading altcoins like Ethereum (ETH) and Solana (SOL), which have strong use cases, strong communities, and scalable infrastructure.
4. Master the “buy at support and sell at resistance” strategy.
This strategy has been a consistent source of money for many traders, including myself. By buying at key support levels and selling at resistance points, you can take advantage of the natural fluctuations in the market. But it requires patience, discipline, and a sound understanding of technical analysis.
5. Don't be emotional or greedy.
The cryptocurrency market is notoriously volatile, which can easily lead to emotional decisions. Don’t let fear or greed dictate your investment strategy. Diversify your portfolio and avoid getting “fixated” on just one coin because you think it’s the next big thing. Don’t get too attached to it – always be ready to adapt.
6. Put the eggs in several baskets.
One of the biggest mistakes you can make is to invest all of your capital in one asset or project. Spread your risk by investing in a variety of currencies that match your risk tolerance.
conclusion
The cryptocurrency market can be very challenging, especially for altcoin investors. However, with the right approach, you can overcome the chaos and emerge victorious. Remember, caution and strategy are key.
stay ahead
Follow me for more in-depth market analysis and crypto strategies.
Disclaimer
This article is not investment advice. Cryptocurrency markets are highly volatile, and investing in them involves significant risk.
