Cheap or expensive cryptocurrencies || What should you buy?
TL;DR Don't just look at the price..
If you like me have ended up on the cryptocurrency side of youtube you most likely watched a video or two where the person talks about the next cheap altcoins that will explode in value. This is a big misconception especially amongst new people to the cryptosphere that makes them put their hard-earned money into projects solely based on the price-tag. The reason behind this is that cryptocurrencies with a huge supply, for example, Ripple has increased massively in value because the price tag of each coin is considered to be very “cheap”.
But in reality, cheap and expensive coins doesn’t really exist since every currency have a different amount of coins in circulation. To showcase these further let’s look at Ripple that was created with a total supply of 100 billion XRP-coins, counting the 60% or so that the founders still control. If one XRP is worth $1 that would give Ripple a total market cap of $100B – ( Market cap = $value per coin x total amount of coins).
If Bitcoin, which by the same people is considered to be the most expensive of the coins, would have the same cheap price tag as Ripple it would have a market cap of only $21M. So as you can see the price is extremely irrelevant unless you take into consideration the total supply. And hearing someone calling a coin cheap or expensive should definitely raise an eyebrow or two since that most likely mean that you should take everything this person says with a grain of salt.
However, this big misconception has proved to represent a lucrative investment strategy the past weeks. Mostly since so many new unknowing investors entered the market wanting to buy cheap coins. Now, these coins got hit really bad during the recent crash mostly since the influx of new people slowed down and the ones already invested realizing that most of these coins actually lacks any real value or are pure scams.
As an investor looking to make money in the short term, these trends can definitely be worth watching and analyzing what the new flood of investors are doing can be very lucrative. Hopefully, while this space is maturing the community will stop looking at the price tag of a coin and value the project and team behind it instead.
Feel like investing in some cheap or expensive coins? Follow our beginner guide to find out how. 🚀