What you need to know about Low-Cap Cryptocurrencies

Last Updated on April 13, 2021

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In the early days of Bitcoin, many passed up on the opportunity to invest, missing out on a life-changing amount of money if they had bought and sold at the right time. Now, a new generation of crypto-hungry investors are looking for the right answer, and many wonder; Are low-cap cryptocurrencies it?

Low-cap cryptocurrencies have a few definitions. The market cap of a cryptocurrency is dictated by its current value per coin and the amount of coins in circulation, and therefore many should keep a careful eye, not only on what the coin is trading at, but on the total circulation supply of a coin to determine if it is a low-cap crypto. An easier way to look out for these low-cap coins is to scrolls down Coinmarketcap’s list until you hit the second page, as any below the top 100 cryptocurrencies could be defined as low-cap.

The bottom line is that low-cap cryptocurrencies are still in development and don’t quite have a fully conceived or executed use case yet.

Now that you can identify low-cap cryptocurrencies, how do you know if you should jump on board? If so, how do you choose which one is right for you?

Well, like any product in its initial phase of development, there can be huge rewards for investing in a low-cap cryptocurrency. Think of it like a Shark Tank bid. By investing early, you get the biggest chance at maximizing the investment return. If you invested in Bitcoin tomorrow, you might only get a small percentage in return, with a much smaller risk. With low-cap coins, though, you might just see massive gains as the coin explodes. The issue is, since most of the coins are only a proof of concept backed by promises, there is also a chance the coin will trip over its feet and come crashing down.

One example is Bitconnect, a cryptocurrency launched in 2017 that hit the top 10 with zero use case, backed only by shallow promises and claiming high yields in return for BTC. At its height, the coin was trading for $500 and then, since its use case was unsustainable, the founders claimed the Bitcoin deposited to their platform and investors saw massive losses.

If investing in low-cap cryptocurrencies proves that the reward is worth the risk, the next step becomes finding a project that you want to back. There are over 4000 cryptocurrencies listed on Coinmarketcap, and only a few of them may yield impressive results.

While the mother-of-all low-cap cryptocurrencies can fall from the sky, deemed an unstoppable money-making machine by experts, there is more to uncovering the hidden gems in the market than just following the herd.

When deciding on a low-cap Cryptocurrency, you have to remember that they are low-cap for a reason. The proof-of-concept can be promising, but that’s all it really is at the moment. Therefore, find a low-cap cryptocurrency that is not only recommended but has a use case that speaks to you. If you like meme-fueled coins, maybe Dogecoin is the right choice. If gaming is more your speed, research Axie Infinity. Perhaps Tron or Stellar look promising because they are creating decentralized nodes for currency transactions. The bottom line is that to know the incoming value of a coin, you need to value the project and the people behind it.

  1. Follow the developers on all platforms.
  2. Stay up to date on the development of the low-cap cryptocurrency.
  3. Know the use cases that the finished product is offering (And learn what value that holds)
  4. Investigate, don’t just take blind advice.

Ultimately, you have to believe in the idea, if you don’t, then others probably don’t either.