Low Cap altcoins are in vogue again.
But are we too early?
And have we learned from our past mistakes?
Defined
I don’t think there is a hard-core definition out there for what constitutes a low-cap altcoin like we have in Trad-Fi.
Let’s just say under $100,000,000 in market cap for now, or reasonably close to that.
Why So Popular?
Well, they’re not by definition, hence their low market caps. At least not until they moon.
But the prospect of them is alluring to just about everyone not in that 1% wealth tier.
I admit, as much as I preach staying in higher cap plays, I will admit, there is an appeal for me here too.
An appeal I am resisting.
But I know some of you succumb to the siren song of degeneracy more than I do.
Just remember, like I reference often here, this isn’t 8-Mile. You don’t just get one chance to make millions off of one token.
There are many, and there are cycles which come every couple of years or so in this market.
……..at least for now before the law comes down on these things.
But that’s another topic for another time.
For now, you just want to play the asymmetry of the low caps, and you (at least think you) have the capacity to take profit at the right times, unlike most of the dumb little kids who play in this space.
I have some tips for you, and some general things to remember.
1 – Content Creators Matter
Especially this time. Everyone is talking about gaming, and it’s because of Alex Becker.
By the way, Alex Becker is a national treasure. Self-made, very high IQ, hilarious, and just gets it. I’ve been following him since the orange Lambo days. One of the best Twitter accounts on the planet.
But just know, if Alex puts his blessing on something, it’s likely to do well, or at least pump.
I think we are going to see a consolidation as far as crypto YouTubers mentioning low cap gems. We’re about to become very top-heavy.
Sure, most of the crypto YouTubers will still make low-cap videos (because the rich take from the poor as usual), but this generation of degens has, believe it or not, learned a thing or two by getting destroyed over and over again.
I won’t put anyone on blast, but go to ANY video from a few years ago titled “1000x Altcoins to the Moon LOL” or whatever those dipshits used to title their videos.
They made money off of your pain.
Seriously though, go watch the video, and see if a few years later, you can still recognize any of the tokens they mention in the video.
You probably can’t. They all tanked.
And now this time is going to be different? You’re going to take these people seriously again?
It can be different this time, but only if you follow the top guys in the space.
Find out who they are, and follow nobody but them.
It’s going to be hard, because the YouTube algorithm is going to assume you’re a moron and show you everyone else’s dumb little altcoin video too. But keep it real.
I really think we’re going to see a consolidation here, and the top guys will have ultimate power as far as being able to play kingmaker with these tokens.
But a lot of good that does unless you have prior knowledge of what they’re going to talk about, which you don’t. So instead…
2 – Play the Sector
Gaming/Metaverse isn’t the only exciting low-cap sector out there. A lot of new businesses are in the works on the blockchain, and they include new and existing sectors alike. Check out…
Real World Assets (We will definitely be hitting this sometime in the future)
New DeFi
Storage
Launch Pads
New Layer 2s
New Layer Zeroes
AI
Decentralized Social Media
Yo Momma
Now this is going to take some real due diligence to see which tokens in the sector have a chance at becoming the leaders in their space, which is the real treasure for us investors.
But we’ve seen this movie before haven’t we? When a sector gets hot, every token in it generally gets a boost.
So if you’re going to be lazy (and most degens are), I would take profit sooner than you normally would.
I would even go into how you should have a spreadsheet and have levels of multiples mapped out in terms of your take profit points, but you’re a degen, and you don’t want to do what successful people do, so I’ll skip this part.
3 – General is Better
Back to gaming for a moment.
I would take a gaming studio over an individual game any day.
Much MUCH higher chance of success, with similar gains I would imagine.
Yes, I invest in ILV, and I did a blog on Star Atlas, but these projects can and often will (and often have already) run out of money.
And even if they don’t, they’re likely going to be launching in an ocean of other Web3 games (Illuvium should be earlier, hence the investment), and the winners will be the ones where people can make the max amount of money first, then have fun second IMO.
Too much can go wrong, despite the hype. At the end of the day, hype is just hype.
Don’t play the horse, play the entire race.
4 – Governance Over In-Game
If you absolutely insist on investing in individual games, remember this.
Some games have two tokens — The in-game token you will be earning, then a governance token.
The in-game token is going to be constantly sold for stablecoins every singe day.
The governance token will not be.
I know which one I’d rather have.
ILV is not an in-game token btw.
5 – We May Still Be (Too) Early
Almost none of these games are coming out anytime soon.
Are we really going to repeat the same mistake we made in 2021?
Alex Becker even said it himself.
Now there is a chance people will diamond hand some of these tokens, but waiting is probably the more high-percentage play.
Or at least go half in now, and average down later.
I know in low-cap world, people can often band together and degen these things into prosperity, but are you willing to risk this being true?
6 – Set Yourself Up Correctly
You will need a place to buy and store these tokens. Most places don’t allow it.
I can’t help you here since this isn’t my circus, but fumbling with new software here is something I’m sure you want to avoid.
Regardless of when you purchase, get yourself set up now and get used to trading and sending with your new degen-monkey set-up.
Conclusion
I’ve said it before, this is like a father talking to his dopey teenage kid.
We know you’re going to go out and do dumb things.
Just keep the car in between the ditches when you do, won’t you please?
— VP