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Insider leak of the day

29 Dec 2023 18:10

#CryptoMichNL
Why #Altcoins are a great investment!

Markets tend to move through hype and sentiment cycles. Two months ago, the markets were still silent and now, the hype is getting back.

Solana went up 10x, Injective has been doing great, but what's next? Are altcoins still good to invest?

Yes, they are. However, a market flow takes place, which means that you'll be seeing that specific segments will outperform others as rotations do take place on an ongoing basis.

In that regard, the Solana ecosystem has been doing great in the past few months, resulting into a memecoin rallying by more than 50x in just a matter of time.

The question is; the coins which are getting hyped a lot on social media, are they the best investment option at this point?

Another question is; is Bitcoin the best investment to go for or is Ethereum going to yield a higher return?

All important topics to discuss, so let's raise the questions one by one.

Is Bitcoin the best investment to go for or is Ethereum going to yield a higher return?

Bitcoin has been succeeding in the past few months, providing a return of more than 80% in a timespan of eight weeks.

The ETF is approaching, which meant that investors are seeking for a return (as the consensus is that the ETF has a positive impact on the markets). Most of those people are already positioned as this event was known for months already.

Secondly, the applicants need to get collateral to make sure that they can cover the ETF volume. This means that 30-40% of collateral in Bitcoin needs to be there prior to going live.

These events are both at the end stage of their momentum, which means that the upwards return have relatively been covered, hence why the overall question is being raised whether Bitcoin is going to yield more upwards return from here.

I don't think so, or atleast, I think you'll be better off rotating towards Ethereum, which has been heavily sold off and has received a ton of negative feedback in the previous period, as it was lagging behind. Fun fact; it always does.

However, Ethereum has a spot ETF to be finalized in 2024 as well, so soon we'll get a rotation towards that one and the momentum to grow. To be fair, Bitcoin can run towards $50,000 to here, but Ethereum rallying to $3,000-3,500 is a more reasonable approach as Ethereum didn't make any return at all with the BTC pair correcting a lot.

Second question; the coins which are getting hyped a lot on social media, are they the best investment option at this point?

We've discussed the entire topic regarding potential upwards return and risks involved. The same concept can be applied on investments in Solana (to be done here) or Injective compared to Arbitrum or Optimism or any altcoin that didn't have any upwards return, yet.

At some point, the upside is getting skewed, volatility starts to go away, people take profits and rotate towards other altcoins, hence why those initial projects aren't the best ones to invest in.

Still, you'll see a lot of momentum on social media as the hype is in mini 'Euphoria' stage during such a rally as people have been fueling their hype through news events and things can go up in an endless manner. They don't. Reality kicks in.

Moral of the story, investing into something that has been going up by 10x is going to provide you a lot of potential downwards risk as they can easily correct 50% and they have a hard time going up another 2x.

On the other hand, assets which haven't been going upwards at all, they can correct 10-20% but they can easily yield a return of 200-400%. You can see the payoff difference.

Conclusion, make sure to take your profits if you have been investing into assets which have been doing well. They won't continue to do that for an infinite period of time.

If you want to invest into something, make sure to be critical and to think differently than most people do, because otherwise you'll become like them.
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