You should know that there are several categories of altcoins depending on their market capitalization and the industry it targets. In this article I'll discuss low cap altcoins. What's a low cap and why do I see it (my opinion) as a good opportunity once you do your analysis well.
I'll classify each crypto in a different category according to its capitalization. For this, you have the high cap cryptocurrencies, that's, their capitalization's above 60-70 million cap. You have mid-cap cryptocurrencies, that's, their capitalization's between 200 and 60 million capitalization. Finally, crypto-currencies with low capitalization, (Low Cap), that's to say that their capitalization's less than 10 million capitalization. Below 2 million this's ultra low cap and these you should really avoid if you don't have a lot of experience as a crypto market speculator.
Now that you know the different categories that we can classify cryptocurrencies in, let's take a look at the Low Cap market. Please note, everything that's said in this part's by no means financial investment advice and don't go headlong into making a portfolio consisting only of low cap! It could be suicidal for your financial situation. The goal here's to bring you another vision and to help you understand why low caps can be interesting!
Low caps are an opportunity for us in my opinion because most of the projects classified in this category are practically unknown to the masses. That's, investors and speculators haven't taken an interest in the project. However, that doesn't mean the project isn't promising. They are unknown to investors because generally, when a project gets underway, the bulk of the budget's reserved for the development part of the project (recruitment, partner acquisition, R&D). It's only then that the marketing and communication part get underway and gradually make the project known to the community.
Therefore, you will understand then that if the project's not known, its capitalization cannot be very high. And this is where the opportunity may be, to choose a project that's undervalued.
There are now many Low Cap projects that are performing and progressing very well in their project. Capitalization's due to the good development of the project, the acquisition of a partner and the awareness of investors that the project is promising. In 2019 I entered KICK at 4 million capitalization to sell it 2 months later at 40 million capitalization, in other words an x10! But also in so many other projects like Chiliz (CHZ) or NOIA.
However, you should keep in mind that low caps are certainly an opportunity for some, but they are also very risky! For a winner you must lose on four more! The famous “High Risk, High Reward”. To find them you also need a very good knowledge of the crypto ecosystem. Low caps, if you want to acquire them, must represent a tiny percentage of your portfolio. Between 0 to 10% maximum of your portfolio! Although 10% is already significant, then it will be necessary to advise in view of the total investment you have allocated to cryptos.
In summary, low caps really represent an opportunity but you must keep in mind that these are very risky and require a good knowledge of the crypto ecosystem. If you want to learn more, please write to me or do your personal research on the subject.