When I first got started in crypto, there weren’t really many Altcoins (aka alternative coins, pretty much anything that is not Bitcoin). Bitcoin was first released in 2009 and then the first recognized Altcoin was released in 2011. I got into the crypto space with my first buy of Bitcoin in mid 2012 and the only crypto coins that I can remember being around at that time were: Bitcoin, Litecoin, Namecoin, Swiftcoin, and Peercoin.
The funny thing is that in 2013 the Altcoin community literally exploded with six major new coins being released that year onto the crypto market. I guess I chose to get in at a good time!
Fast Forward to Now…
Now, there are over 900 active coins on the crypto market so the world has caught the crypto bug and many new investors are wanting to get into investing. This is great! Because this increases the visibility of this investment more in the public eye and will drive up prices similar to the way the stock market goes up when something new is first released.
Governments are changing the game
The problem with the increased visibility is that world governments are starting to take notice and increase their regulations, which can be a good thing and a bad thing for those of us that have been involved in crypto for a number of years. We are used to doing things a certain way and have gotten used to doing things that way.
As much as we need governments and laws, history has shown us that governments getting involved in finance can limit the transactions that small time investors are allowed to make. However, this can protect the small investor from getting involved in many scams that they may not be financially educated enough to avoid.
Educating oneself when choosing investments is key, but many new investors buy into the hype of the market and want to make the quick money right away. And there is a lot of money to be made still in Bitcoin and crypto, at least that is what current trends are indicating.
To buy or not to buy, that is the question
Photo by Elpasoseoservices on Pixabay
So are AltCoins something that you should be putting your money into?
Or are they a black hole that will just suck your money in and you will never get it back?
The answer to that is…. Both.
If you have not heard of the term “pump and dump” then let me tell you what it is. To pump and dump a cryptocurrency is to gather up your friends that have some money to blow and you all focus on one altcoin that is at bottom and maybe has been for a little while. Depending on how much money you have, you may choose to put your money into a coin that is only a few cents, but usually no more than one dollar per coin.
This leads others outside your group to think that the coin is going nuts and they catch the hype so they buy in as well. The value of the coin skyrockets and everyone in your group sells their coins at the same time, reaping the profits and simultaneously dropping the value of the coin.
Sounds like a great strategy, right? Well, technically I believe that it is illegal, but even if it wasn’t illegal, it is still risky. Because there is always the possibility of a much larger group with a lot more money coming in and pumping and dumping the coin before you do and then you and your friends are the ones left holding the bag.
Advice from someone that has lost money in AltCoins
For those new to the crypto space, you need to learn how to read the market trends especially those of AltCoins and monitor how the coin has been performing in the recent past. If the trend is pretty much sideways then this indicates that there really isn’t anyone buying and selling that coin so you likely should not get into it.
And whatever you do, don’t roll with the emotion of the marketplace or you will get steamrolled and likely lose all of your money. Don’t jump into a coin just because it looks like what everyone else is doing at the time. Be smart and be patient. Learn to read the trends and charts.
And don’t put in money that you cannot afford to lose. I have seen too many people lose their rent money to the marketplace because they did not know what they were doing and didn’t take the time to learn.
AltCoins are a beautiful investment and I have made a lot of money investing in them! But, I lost a lot of money in the beginning too because I was cocky and didn’t learn to read the trends first. I have learned that patience is the best way to go and learning before diving in is definitely the way to go.
Iwould love to hear from you if you have invested in AltCoins or are thinking to! What has your experience been like thus far in crypto? Leave me a comment!
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