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October 22, 2024

Which Altcoins Trade Based on Market Capitalization (Rather than Price Manipulation/Illiquidity)?

Discover mid-cap altcoins that trade based on market capitalization, offering a safer and more profitable alternative to meme coins.

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In the past two months, excluding memecoins, some mid-cap altcoins have performed exceptionally well, showing strong growth based on market capitalization. Here's a breakdown of some of the best-performing altcoins:

  • $SUI ~5x increase (from a market cap of $1.2 billion to ~ $6 billion)
  • $TAO ~3.5x increase (from a market cap of $1.3 billion to ~ $4.6 billion)
  • $HNT ~2.25x increase (from a market cap of $623 million to ~ $1.4 billion)
  • $AERO ~2x increase (from a market cap of $266 million to ~ $818 million)

Key Takeaways:

  1. Easier to Track than Memecoins
    These altcoins are much easier to follow and analyze compared to the thousands of volatile memecoins. They offer better predictability in terms of price action and market behavior.
  2. Lower Risk of Scams
    The chance of encountering a scam project in this mid-cap range is significantly lower, with an estimated fraud risk of less than 5%. This translates to a higher win ratio for traders.
  3. Easier to Execute Trades
    These altcoins offer better liquidity and make it simpler to set buy/sell targets. Since these coins trade based on market capitalization rather than speculation or manipulation, determining entry and exit points is more straightforward.
  4. Higher Sharpe Ratio
    The Sharpe ratio, which measures risk-adjusted returns, tends to be higher for these altcoins. This indicates better returns with lower risk, providing a more balanced investment opportunity.

The Middle Ground Between VC-Backed Coins and Memecoins

While many traders believe that significant gains, such as doubling your investment in two months, can only be achieved by trading altcoins with a market cap under $100 million, this isn't always the case. The mid-cap altcoins mentioned above show that substantial returns are possible in a safer, more liquid market space.

If you're skilled at trading memecoins, that's great. However, for most traders, memecoins come with high risk and require constant attention. There’s a “safe zone” between VC-backed coins and memecoins, where traders can find projects that offer both high returns and a good win ratio.

Benefits of Trading in the Safe Zone

This safe zone includes around 20 projects, like the ones mentioned above, that provide a good balance of high returns and low risk. Trading in this zone is generally less stressful than chasing memecoins, leading to better mental well-being, more consistent trading results, and potentially higher profits.

🌟 In Conclusion: Trading in the mid-cap altcoin “safe zone” is a less risky, more predictable way to achieve high returns, making it a better alternative to the often stressful and volatile memecoin market.

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