Marketcap is something everyone knows about, but few people actually understand.

It's a central point to assess

• Upside potential

• Investment risk

• Portfolio equilibrium

An area where I see many people fail to be a good investor is taking upside potential into account.

I will purposely invest into an inferior project or product sometimes just because it hasn't gone "up only" yet.

Same argument when comparing valuations.

If Project A can potentially target 1 billion market cap and project B can only target 100 million market cap.

Project B is still the better investment if it's only 10m market cap vs project A sitting at 400m.

Not every great project is also a great deal.

The most important thing is how many times your assets will multiply and over what period, and the risk level of the project. Bitcoin for example, is a solid market cap but the possibility of 2-5x is very low even in the next bull run, but it is not same with low cap alts.

High-cap projects might multiply less, but they are clearly less risky.

In the end, potential and risk always go hand in hand. A project at 1M MC doesn’t always mean it’s a good R/R.

Sure, it might be undervalued, but there could also be a reason for why it’s at that MC.

That’s why looking at fundamentals is far more important. Often times there’s a reason for why projects are valued at their respectable MCs.

A project like $KAS may be high in MC, but if you zoom out and look at the problem it’s solving then investing in such a project is far better than investing into a meme coin at 1M MC with no value.

If we consider projects from the point of view of potential profit, then the one with the smaller capitalization has more opportunities.

But there are corresponding risks. project A would probably be more safer rug wise and return assurity wise. So a good mix of different coins or as it is easier said, don't put your eggs in one basket is a good way to go.

Hope you learnt something today, I am ticktalker and I always post crypto/educative contents.

Making each day count in the world of crypto is crucial for success. Plan, research, and learn to stay ahead. Keep pushing, legends! 💪💯

Until next time, stay SAFU.

Please whatever is written in the article above is for educative purposes only. I am not a financial advisor.

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