There are more than 6000 virtual currencies and tokens circulating around the world, and spotting a multi-fill machine early on is nearly impossible, they say.
Like the stock market, the cryptocurrency world also contains large, medium and small coins and tokens.
A “small cap cryptocurrency,” or “micro cryptocurrency,” is a currency with a market capitalization (Mcap) typically between $5 million and $15 million, while “middle caps” range from $100 million to $500 million. Cryptocurrencies with a market capitalization of more than $500 million are widely traded and marketed – earning the “big cap” label.
Crypto-watchers might describe the “buy cheap, sell high” strategy as risky, but investors have made significant amounts of money by adopting it. The massive price hike in coins and tokens such as Solana, Polkadot, BNB, Tezos, Ripple, Cardano, Avalanche, Dogecoin, Matic and Shiba Inu bears witness to this time-tested strategy.
“People take trades in undervalued cryptocurrencies when they find high-quality coins that are expensive. The problem with this strategy is that there are many cryptocurrencies with Mcaps as low as $1 million,” says Sachin Jain, co-founder at Amesten Capital, which manages A portfolio management service for cryptocurrency investors, “There is a serious risk of losing money on many of these coins and tokens. “Low-value cryptocurrencies are vulnerable to deep price corrections in times of market crash. There is also the risk that developers will cash out their entire holdings and exit the market. In such cases, investors will lose all of their capital.
Cryptocurrency fund managers recommend investors to buy cryptocurrencies built around a long-term project or product. Investors should only invest in the top-rated and widely traded cryptocurrencies.
There are a lot of ‘projects’ that produce cryptography or tokens as a reward for the enablers (the ‘implementers’ of the project). Oftentimes, developers may not have the means to market their project or their bonus codes. If the project is long-term and the developer’s narrative is strong, investors can buy their tokens at lower prices. These are called “undervalued gems” in the parlance of crypto fund management. This is exactly why savvy investors continue to lead their investments in Solana, Polkadot and Cardano, as they believe that these new blockchains will disrupt ethereum’s dominance. Ripple and Tezos are seen as helping the payments industry.
“The reason people buy lowercase letters is because they are multiplying faster than top-of-the-line cryptocurrencies. Little did they realize,” says Siddharth Sujani, founder and CEO of Crebaco, which provides rating services to crypto issuers, exchanges, and DeFi enablers. They collapse faster, too.” Some small-cap coin issuers are scam professionals as well. … Investors should do their research before investing in lesser known coins and tokens.”
Investors are moving to the lesser known cryptocurrencies because they cannot buy the top-tier coins. “People feel that they should be able to buy the whole of one bitcoin and not just a small part of it. They are not happy to invest in a part. Sathvik Vishwanath, CEO of cryptocurrency exchange Unocoin, says this sentiment is driving investors to buy cryptocurrencies. .
Cryptocurrency investors should always be careful – and even more so with the cryptocurrency penny. They should be aware of the Cryptocurrencies bill that will be introduced in Parliament soon. Any negative government decision may lead to sell-offs – bleeding small capitals more than others.