Steemit Crypto Academy Task 6: Types Of Crypto Assets Capital, Risk Capital In Penny Cryptocurrency, Importance Of Watchlist | lecture by @stream4u
The week 6 of the Steemit crypto academy is going strong. I’ve
attended yet another lecture by professor @stream4u and it is indeed a great lecture. I will be solving the task associated with the lecture.
Differences in Large Capital - Mid Capital - Small Capital and how they will affect to the Investment?
It is important to understand Large capital, Mid-capital and Small
capital assets to properly make the right decision for investment. The major differences will be highlighted individually in their definitions below.
Large Capital: These are the companies or assets with more
than $10 billion market capitalization, in addition, the assets fall under the top 10 assets and for this reason , they are considered as Large Capital. It is evident that investment in Large capital is safe which might not necessarily bring much profits. With the characteristics safety of investment in large capital, note that not much profits is to be expected from this assets’ type.
Mid Capital: Mid capital has slight difference from the large
capital assets. Mid capital are the companies/assets with a market capitalization between $1 to $10 billion and have the assets fall under the rank of top 10 – 50. Mid capital is more risky than the large capital but also comes with good profits on investments. Volatility in mid capital is often caused by the differences in the price of assets on exchanges. Mid capital tends to bring bigger profits on investments in the nearest future.
Small Capital: These are the companies/assets with market
capital which is below $1 billion and they are out of the top 50 assets in the market. Investment in small capital is risky but as such also returns high profits on investment. In small capital, the assets might be greatly affected when there is high volatility in the market such that, the value of one’s asset greatly depreciate. And also bigger profits can be expected from the investment in the soonest time with patience.
Tabular Differences of Large Capital, Mid Capital and Small
Capital
| Asset Type | Market Capitalization | Rank | Risk Level | Volatility | Return on Investment |
|---|---|---|---|---|---|
| Large Capital | >$10 billion | Top 10 | Safe | Low | Low |
| Mid Capital | $1 - $10 billion | 10 – 50 | Slightly risky | Higher than Large capital | Slightly higher |
| Small Capital | <$1 billion | <50 | Very high | High volatility | Very high |
Your view, Which type of Asset capital can be more profitable? Why? Advantages and Disadvantages. (Explain only 1)
From my own point of view, Small Capital asset type is the most
profitable when it comes to investment because of their low price which tends to multiply in the
soonest time. There is high possibility that the price of assets under this category can blast and
pump so hard to give up to 10 – 100x return on investment.
Merit of Small Capital
- Small capital asset type is characterized with high profits return on investment - Bigger profits are realized from the assets that falls under this category as they are capable of giving someone 10 - 100x of the initial investment if they experience a slight pump.
Demerit of Small Capital
- Many projects from Small capital assets/companies are not always constant and this increase the tendency of high volatility experienced with assets in this category - The risk of assets under this category is so high and if care is not taken such assets can have their price completely dumped at 0 which means a total loss for an asset holder.
Thoughts on Risk Capital and Penny Cryptocurrency.
In my opinion, Risk capital is the type of capital that does not affect
my finances as I can forget about it after investment, if the price of the asset bought with the risk capital greatly increase in the nearest future, it would be a benefit but initially, the capital used has no effect on my finances while Penny Cryptocurrency is an asset with a very low market price which can be around $0.0004 or $0.02, such assets are greatly undervalued because they are so cheap but Penny cryptocurrency tends to give back your investment in 5 – 10x if it experiences a slight pump.
Risk capital have no effect on your finances because you can easily
forget about it after investment but it can turn out to be a plus to your finances if the assets
bought with it pumps hard while Penny cryptocurrency, despite it been undervalued can give you fortune when you least expected as you can get back multiple times of your investment when the asset pumps.
What is the Role of Watchlist? Best way to set Watchlist. Additionally, For Example, show your watchlist if you have configured it and give a short description of it.
The role of watchlist in cryptocurrency can’t be overlooked, it keeps
one closer to the assets that is worth investing in. It is not possible for a human to monitor all crypto assets but watchlist brings you closer to the assets that you specially selected for tendency of investment thereby ease the monitoring of assets.
The Best way to Create Watchlist
The best practice to building up your watchlist is by selecting 2 – 3
assets from the following assets category; Large capital, Mid capital, Small capital and Penny
Cryptocurrency. This is a good practice to selecting assets to your watchlist although, the lists are often required for removal/modification but the basis of 2 – 3 assets selection should be done from the categories I’ve listed above.
In conclusion, it is important to know the assets capital classification before making a decision of investment to be on a safer side. My article has said a lot about the risk and profitability of each category. And remember the watchlist is for easy monitoring of assets you have selected based one or two preferences. I appreciate the lecture of professor @stream4u as it has widened my knowledge in the crypto ecosystem. Thanks professor and to all that read this.
Special regards;
Cc: @steemcurator01
Cc: @steemcurator02
Cc: @steemitblog
Cc: @stream4u
Written by; @fredquantum
Hi @fredquantum
Thank you for joining Steemit Crypto Academy and participated in the Homework Task 6.
Your Homework task 6 verification has been done by @Stream4u.
Thank You.
@stream4u
Crypto Professors : Steemit Crypto Academy
Thank you, sir. I appreciate your kind review and I look forward to learning more from you subsequently.