Beyond Top 100

Investing in Less Popular Altcoins

Cryptocurrencies can be a real rabbit hole. Even if you never invest in anything other than Bitcoin, there’s a lot to keep up with. Normally, rookies stick to the most prevalent coins, because they’re easy to research and offer relatively tested opportunities.

With over 17,500 coins now in circulation, it can be confusing, even daunting, to create a portfolio that goes beyond the top 100, but when you think about it, that first page on CoinMarketCap is around 0.5% of the total number of coins in the crypto world. Whether out of curiosity or by way of a tokenized project, many investors end up eyeing less popular coins with interest.

Is it worth it?

The short answer comes as no surprise: it depends.

Every seasoned investor will tell you it pays off to have a diversified portfolio, because it can act as a safety net in case some of your investments tank. Besides, a small investment in a budding coin can be a minor loss if it never takes off, or a shiny supercar if it does. With solid market research and, let’s face it, a tiny bit of luck, investors can be early to the next huge coin.

Less popular altcoins can also help finance tokenized projects, propelling the industry toward mass adoption of key crypto concepts such as decentralization and transparency. Needless to say, this idea correlates with the possibility of considerable gains.

But less popular altcoins come with higher volatility, and chances are you will end up regretting this or that investment. Normally, market analysts expect altcoins to fall or rise along the same patterns as Bitcoin, but tokens can falter as soon as the project fails. The rule of thumb is to limit your riskiest investments to the assets you can afford to lose.

Where to start?

The first thing on your checklist is adjusting your perspective. Less popular coins require careful research. You want to go deeper than top Google results and learn more about the people behind the coin you’re interested in. Check out their website, find them on Twitter, see if their mission speaks to your heart—and reason.

A solid altcoin should also demonstrate decent liquidity on at least a couple exchanges. Before you buy, make sure that the coin already has some success stories or credible ambassadors attesting to its reliability. Last but not least, a legitimate coin should have a detailed, thorough whitepaper. Look for it on the project’s website or your go-to market intelligence platform.

Next, run a background check on the exchange you intend to use. Ideally, you should pick one that combines high liquidity with strong security. Make sure there are few reports of fraud, bugs or hacking incidents, and the exchange appears reputable in the crypto community. If you’d rather err on the side of caution, start with one of the well-established platforms, which usually hold themselves to a high standard. Keep in mind that some won’t accept fiat currencies, so make sure you have enough supported cryptocurrencies in your wallet.

Stay cool

The details depend on the altcoins you choose, but one rule that shouldn’t fade is never to make decisions on impulse. Coins that never take off can prove hard to sell, cluttering your portfolio as reminders of bad luck, poor decisions, or both.

Still, less popular coins are the nest of blockchain innovation. Every coin that steals the spotlight now used to be among that crowd, and many of the most successful investors ended up where they are because they mastered the altcoin game.