More Tips for Newbie Crypto Investors - Alt Coins and Market Cap

So, some people riding the alt train of late, new to the game, are probably reeling at their 25% drops in the BTC value of their coins. If you're not half in Bitcoin right now, you are at a disadvantage. No, your dollar value might not be dropping, but losing BTC value is losing money, regardless.

If your only trading pair is BTC, what you're actually seeing is a change in Bitcoin price. At this point, all you can do is hold, and hope BTC doesn't run back up to 20K before you can get your position sorted out. Alts are great, until they aren't. Your strategy should be trading to accumulate Bitcoin.

It's great to look for the 'Next Bitcoin'. Profitable, even. But it would take years of maturity and market growth for any cryptocurrency to topple Bitcoin's dominance. Bitcoin is far more than a mere pricy crypto. Dollar value is just one part of the equation.

Which leads me to something else new investors don't understand. Market cap.

The number of tokens issued at an ICO, held in escrow, etc. are an important factor when trying to determine the value of any particular crypto. Hint: scarcity increases value. When no one is selling BTC, value increases. There will be less than twenty million Bitcoin, all told, due to the limit of 23,000,000 Bitcoin ever being issued, with 2-3 million already lost forever.

Now consider a crypto with 100,000,000,000 (One hundred billion) coins created at inception...

There is absolutely no way a crypto like that could be valued at what Bitcoin is. There might not be enough money on Earth for that.

I know of a coming ICO that is issuing, I shit you not, ONE TRILLION tokens. It's Zimbabwe all over again.

So, welcome to the club and all. If you're freaking out a little because your portfolio is way down, you have earned your first Bitcoin merit badge. Hopefully the first of many.