Can Beaten-Down Altcoins Still Deliver Strong Returns?
Altcoins can render great returns, but they can also shrivel up and die. I pointed this out in a recent article. Even though Litecoin is still ranked quite high and has MimbleWimble coming up, its performance wasn’t that great in the recent bull run. LTC only managed to peak at its previous all-time high, which means that HODLing LTC from the last cycle peak to the 2021 cycle peak was a waste of time.
However, buying the bottom would have yielded a 10X return. This still isn’t a good return for crypto, but it’s acceptable. What I am pointing out is that even if you buy the bottom of a coin that barely performs, you can still do well. If the coin goes on to perform well, then it’s a win/win. So, these are coins that I am not particularly bullish on but find increasingly attractive at current market valuations.
A coin or token that has dropped significantly, especially relative to the broader market, and has strong fundamentals, real utility, and strong community support is often a good buy. However, a project that lacks these characteristics is more of a gamble. Even if a project appears to meet these defining points, the investment remains risky. This should be considered regarding the following list of coins.
Cardano: Is ADA Worth Accumulating After A Major Correction?
I had a bag of ADA that I picked up for approximately two or three cents, which I chose to sell prematurely some time ago. I’ve believed the coin was way overpriced above $3 and mentioned it a few times to my readers. Dropping below a dollar has recaptured my attention, and I would ideally like to begin accumulating a small position if the price falls below $0.60.
I will start to utilize smaller passive income models to buy small allocations of Cardano at this point. A move below $0.60 would see me looking to increase this somewhat. A return to the previous all-time high from $0.60 would imply a return of approximately 5X, which is acceptable, considering ADA is a staking coin and ultimately a small business.
Polkadot: Why DOT Remains A Strong Staking Investment
DOT still has a lot going for it in my opinion. I still have some DOT that I picked up in the early days. This is another coin that is great for staking and subsequently creating another income stream. Ensuring that a coin or token has an income-generating slant is always part of my process. Sure, almost anything can be staked nowadays, but often through centralized or DeFi entities.
I find authentic PoS the safest option and prefer to have it as an option. I think Gavin is exceptionally talented. My optimism regarding Polkadot is largely due to Gavin Wood. There are many ways to weigh an investment opportunity. You can look at the tech, the use case, and in this case, the man behind the project. Even though Elon Musk is not the man behind Doge, he is an outspoken supporter.
Chainlink: Is LINK Undervalued At Current Prices?
LINK at $10 is already a 5X to the previous all-time high. Given that the price can easily fall much lower if the stock market continues to edge lower, it’s a good buying opportunity. At some point in the price action, fresh accumulation makes sense. It may not be the bottom, but if you keep accumulating from a certain point, you have a fairly good chance of being rewarded.
How to Build An Altcoin Position Without Trying To Time The Bottom
Buying just once is a foolish strategy in my opinion. I look for projects that enter a good zone and then schedule consistent accumulation. For instance, readers will know I began accumulating SOL when it first hit $80 a few months ago. I have been buying this zone consistently and will continue to do so. When the price recovers, I will be well-positioned to capitalize on it.
There are a lot of views currently surrounding Solana. However, there is way more to take away from these events than what is being addressed. I will expound on this in another article. At the end of the day, Solana is well positioned to be a future dominant player, especially regarding Layer1s which are essential for future project development and the expansion of the crypto sector as a whole.
Where Should You Store Your Altcoins? The Safest Options
For long-term altcoin holders, the safest storage solution is a reputable hardware wallet. For altcoins, you want a hardware wallet that supports multiple coins and ecosystems. Ledger wallets are well known for their wide coin and token compatibility. Another strong option is Tangem, a card-based system that also supports multiple chains and ecosystems. SafePal is another consideration, as this air-gapped wallet provider also supports an extensive list of altcoins.
Final Thoughts
There are, however, other projects I am currently buying, but those are perhaps more high risk/reward-based. These selections are primarily top-tier projects. Avalanche is another one that I like at $50. I am already accumulating AVAX, albeit slowly. Bitcoin is also always in the accumulation zone for me via passive income models. I no longer invest with my own capital, but rather with the fruits of what I have built over the past few years.
Many are giving up now, but this is when the money is made. I love bearish seasons! Without bear markets, wealth cannot be created. This is the sweet side to the bitter coin of brutal bear markets. Wishing you well in your crypto journey. See you next time!
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