Seizing opportunities and making a profit in the cryptocurrency markets is becoming more and more complicated every day, especially when it comes to altcoins. In this environment where liquidity is decreasing and attention is limited, it is becoming very difficult for investors to achieve success by using the right strategies. In this article, we will examine how an approach focused on quality can make a difference while touching on the challenges faced in capturing alpha in the altcoin market.
đAAVE's Dominance and Strong Position in Web3 Credit Space
$AAVE Web3 has established a strong position in the lending space. The project has long been considered a leader in the world of decentralized finance (DeFi) and has been showing steady growth. In particular, the potential emergence of a token buyback program could be a positive signal for investors. Buyback programs typically limit the supply by reducing the amount of tokens in the market, which can lead to an increase in value. AAVEâs success is supported by high circulation and strong value accumulation, making the project a permanent leader in the Web3 lending sector.
đRAY Lagging: Poor Performance in Value Accumulation
Projects like $RAY (Raydium) continue to lag behind strong competitors like AAVE. RAY has been performing poorly compared to AAVE in terms of value accumulation and market dominance. At a time when these projects are struggling to grow, it is becoming increasingly difficult to attract investors. Weak value accumulation can lead to a lack of trust in projects, making it difficult to reach a broader user base. Therefore, projects like RAY continue to lag behind leading projects in the industry.
đWhy is it becoming harder to catch alpha in altcoins?
Capturing alpha in altcoins is becoming increasingly difficult due to low liquidity and reduced attention. In particular, the intense volatility in the market can cause altcoins to be affected by short-term price movements. Low liquidity restricts large investors from easily changing their positions, which can lead to sudden and sharp movements in the market. In order to be successful in the altcoin market, it is vital to consider such risks and focus on the right projects.
đFocusing on Quality: Three Essential Criteria for Success
To succeed in this challenging environment, adopting an investment strategy focused on quality can be a great advantage. A quality-focused approach is based on three key criteria:
1. High Circulation and Strong Value Accumulation: Projects with high circulation appeal to a larger user base and increase their chances of long-term success with strong value accumulation. These projects usually perform more consistently in the market and gain the trust of investors.
2. Accelerating Growth in Key Indicators: Projects that show rapid growth in key indicators usually gain a solid foothold in the industry. This growth is reflected in the increase in the number of users, transaction volume, and other important metrics. Accelerating growth strengthens the potential for future success of the project.
3. Industry Leaders and Proven Teams: Industry-leading projects and proven teams managing them are generally considered more reliable in the crypto markets. Teams with a track record of success can more effectively handle challenges that a project may face, ensuring long-term sustainability.
đResult
Although it is becoming increasingly difficult to achieve alpha in the altcoin market, the right strategies and a quality-focused approach can help overcome these challenges. While projects like AAVE stand out with high circulation and strong value accumulation, projects like RAY lag behind with weak performance. Therefore, in order not to lose market share, new breakthroughs need to be implemented and user-friendly approaches need to be demonstrated. What is important for investors is to understand these dynamics and focus on leading projects in the sector and aim for long-term success. đ
