🚀🌟 Discover the truth about small-cap Altcoins and their explosive potential! 💥🔥
Do you think it takes billions to trigger a new crypto season? Fake ! Find out why SOL, ONDO, WIF, MKR and other nuggets don't need such sums to explode! 💡
💡 Many think that the market needs billions to trigger a new season, but this is not true for $SOL , $ONDO, $WIF , $MKR or any other low-cap gem. 💡
🧵 Here's the secret ⬇️
Common misconception
Top traders say that altcoins with large market caps need massive investments to grow.
They often say, “It takes N billion dollars for the price to increase N times” for assets like Solana. This is incorrect, and here's why:
Key concepts
Market capitalization: Total market value of a cryptocurrency (Asset price x Supply).
Price: Determined by the intersection of demand and supply.
Liquidity: Ability to quickly exchange a cryptocurrency at its market price without significant loss of value.
Example
$STRK at $1 with a bid of 1 billion = market cap of $1 billion.
To double the price, $1 billion in investments would be required? Fake!
Liquidity plays a crucial role.
Liquidity explained
On exchanges, you cannot sell more tokens than the available liquidity.
If $STRK is listed only on @1inch with $100 million liquidity in the $STRK - $USDC pool:
Price: $1
Market capitalization: $1 billion
Liquidity: $100 million
Price manipulation
Buying $50 million of $STRK will double the price, not $1 billion.
Market capitalization reaches $2 billion with only $50 million in injections.
Big players exploit these mechanisms for manipulation purposes.
Coins
Often listed on one or two decentralized exchanges with limited liquidity pools.
Significant price manipulation creates FOMO among investors.
Take away
You don't need multi-billion dollar investments to change the market cap or increase token prices.
Limited liquidity and high demand are driving up prices. Keep this in mind when searching.
🔑 Understand these principles to navigate the market smarter. 💰💪
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