Why do crypto millionaires shun certain altcoins?
Crypto millionaires are a unique group of investors and traders who have achieved gigantic returns through their strategy of buying and selling digital currency. While there is still caution in the investor world when it comes to such a volatile and risky asset, there is no shortage of eager traders who choose to trust the rising stars in the world of virtual currency.
It is no surprise that a sizable group of crypto millionaires are young people who are up to date with the new technology. At the same time, this is forcing large wealth management companies to grow in this area and support the cryptocurrency space as well.
Crypto millionaires from time to time share their golden tips and strategies that can help other aspiring investors to make significant profits in the digital currency market. One of them is to avoid certain altcoins and shift your attention to ones with considerable potential.
How do crypto millionaires identify altcoins with potential and know which digital coins are not worth trusting?
Basic altcoin analysis
Crypto millionaires carefully analyze the distinctive features of a given altcoin in order to pick out from thousands of tokens the ones that are worthy of attention. They pay attention to:
- the reputation of the altcoin – they look not only at the opinions appearing on the market, but also check whether the creators of a given project are considered credible. Investors need to make sure they are not dealing with a fraudulent project that has nothing to do with the ongoing development of the token.
- technical background – some altcoins are simply copies of other digital currencies. This means that not only do they bring nothing new to the industry, offering no revolutionary solutions, but they are also potentially less secure.
- easy access – some altcoins can only be purchased in certain places, lacking on regulated exchanges or on established trading platforms such as Bitcoin Up or Coinbase. The more available a given altcoin is, the greater the chance that demand for the coin will increase.
Avoiding shitcoins
The meaning of the term “shitcoin” probably does not need to be explained to anyone in particular. It is nothing more than a worthless and useless cryptocurrency that not only brings nothing new to the market, but is also potentially dangerous. Crypto millionaires avoid shitcoins by a wide margin. How to recognize them? First of all, they were not created to fulfill any purpose, they lack innovation and are not very effective. Most often, such shitcoins receive minimal attention and disappear from the industry as quickly as they appeared.
Shitcoins are most often created by anonymous creators who do not sign their names to their projects. Moreover, the promises they make have no reflection in reality. There is a lack of specifics regarding the goals of their development and the functions they are supposed to perform. What follows is that such a shitcoin is owned by very few people, often counted in tens, a few hundred at most. This means that the number of transactions handled by shitcoin is extremely small (less than 5-10 transactions per minute) and can be accused of lack of liquidity.
The most information about what kind of altcoin design you are dealing with can be found in the token’s white paper. If it is inaccessible, too generic or copied from another cryptocurrency, it is worth staying away from it right away. Lack of authenticity and diligence in the development can also be seen, for example, in the domain name, website design or feedback from other investors. Finally, it is worth taking a peek at the liquidity of the cryptocurrency – if it is low, counted in a few thousand dollars, this should be taken as a red flag.
Own strategy
Crypto millionaires cannot be accused of inconsistency. They have their own strategy, which they implement step by step. The main goal, of course, is to multiply profits while minimizing risks. Hence, the most popular altcoins, including Ethereum, Cardano, Dogecoin or Ripple XRP, are the most popular among crypto millionaires.
Of course, finding the right altcoin is not everything – the right “timing” also matters, i.e. finding the best moment to buy and sell a cryptocurrency.
Thanks to the diversity of altcoins, millionaire investors can diversify their powerful portfolio and dedicate fractions of their funds also to lesser-known, but promising altcoins (meeting the previously mentioned assumptions).
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For more than 6 years, he has been interested in cryptocurrencies, tokens and blockchain, as well as other modern technologies like artificial intelligence. I have been actively investing for more than 10 years. I have developed hundreds of highly substantive articles and publications for this and many other external portals.
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