The dilemma associated with investing in altcoins

[JaanusRaim]

There is a clear schism in my altcoin investment plans.

In the long run, I believe that the market capitalization of cryptocurrencies will reach more than 100 trillion US dollars in terms of USD current purchasing power and that, in a couple of decades, there will be many many Bitcoin-like cryptocurrencies with market values ​​reaching a trillion dollars. (Of course, there is a significant probability that I am mistaken and cryptocurrencies will disappear or remain marginal.)

In the short to medium run, I predict that the prices of cryptocurrencies (and especially altcoins!) will fall remarkably, as a stock market crash is likely in the near future. I estimate that the probability of a stock market crash - a decline of at least 50% in the Standard & Poor’s 500 index from its all-time high - is somewhere 20-30% per year. (The March 2020 mini-crash showed that Bitcoin fell much more than the stock market, and altcoins much more than Bitcoin.)

Therefore, my long-term and short-term forecasts regarding altcoin prices are in sharp contrast.
One solution to this dilemma would be to use DCA, but set aside half of the funds for a stock market crash era ? 

[Dunamisx]

If DCA strategy is very effective in Bitcoin investment but I don't know that of altcoins, so you have to be very more careful so as not to invest on any coin or token that will later turn a liability or scam, just be specific with your criterias that will be used in choosing which one to invest and also engage more thorough research, this will help you, I also like the fact that you diversify your investment at the same time not to go to a trade on a single asset.

[TastyChillySauce00]

In the long run, I believe that the market capitalization of cryptocurrencies will reach more than 100 trillion US dollars in terms of USD current purchasing power and that, in a couple of decades, there will be many many Bitcoin-like cryptocurrencies with market values ​​reaching a trillion dollars. (Of course, there is a significant probability that I am mistaken and cryptocurrencies will disappear or remain marginal.)

What if the future of cryptocurrency is consolidation of capital that were fragmented across altcoins? as the market matures people will prefer to invest into something that actually have strong fundamental and have working business model like Ethereum? from every cycle we've seen that altcoins come and go except very few.

In the short to medium run, I predict that the prices of cryptocurrencies (and especially altcoins!) will fall remarkably, as a stock market crash is likely in the near future. I estimate that the probability of a stock market crash - a decline of at least 50% in the Standard & Poor’s 500 index from its all-time high - is somewhere 20-30% per year. (The March 2020 mini-crash showed that Bitcoin fell much more than the stock market, and altcoins much more than Bitcoin.)

Therefore, my long-term and short-term forecasts regarding altcoin prices are in sharp contrast.
One solution to this dilemma would be to use DCA, but set aside half of the funds for a stock market crash era ?  

Bitcoin and stock has shown some notable periods of divergence, I personally don't believe if stock were to go down, crypto will go down as well because crypto is already heavily undervalued especially bitcoin. Altcoin, has already shown about 90% decline for majority of them. If it goes down even further it will be the doom of altcoins.

I'm guessing that since there are tokenized stocks on the blockchain, the fall of stock price will be the cause of capital flight from the stock market and rotate to crypto. It is possible after the tokenized stock is a thing and good amount of traditional finance capital is moving on the blockchain.

[JaanusRaim]

In the long run, I believe that the market capitalization of cryptocurrencies will reach more than 100 trillion US dollars in terms of USD current purchasing power and that, in a couple of decades, there will be many many Bitcoin-like cryptocurrencies with market values ​​reaching a trillion dollars. (Of course, there is a significant probability that I am mistaken and cryptocurrencies will disappear or remain marginal.)

What if the future of cryptocurrency is consolidation of capital that were fragmented across altcoins? as the market matures people will prefer to invest into something that actually have strong fundamental and have working business model like Ethereum? from every cycle we've seen that altcoins come and go except very few.

In the short to medium run, I predict that the prices of cryptocurrencies (and especially altcoins!) will fall remarkably, as a stock market crash is likely in the near future. I estimate that the probability of a stock market crash - a decline of at least 50% in the Standard & Poor’s 500 index from its all-time high - is somewhere 20-30% per year. (The March 2020 mini-crash showed that Bitcoin fell much more than the stock market, and altcoins much more than Bitcoin.)

Therefore, my long-term and short-term forecasts regarding altcoin prices are in sharp contrast.
One solution to this dilemma would be to use DCA, but set aside half of the funds for a stock market crash era ?  

Bitcoin and stock has shown some notable periods of divergence, I personally don't believe if stock were to go down, crypto will go down as well because crypto is already heavily undervalued especially bitcoin. Altcoin, has already shown about 90% decline for majority of them. If it goes down even further it will be the doom of altcoins.

I'm guessing that since there are tokenized stocks on the blockchain, the fall of stock price will be the cause of capital flight from the stock market and rotate to crypto. It is possible after the tokenized stock is a thing and good amount of traditional finance capital is moving on the blockchain.

Of cause, many scenarios are possible. The abovementioned is just the one I find the most probable similar to https://medium.com/@johncpalmer/what-if-everyone-had-their-own-cryptocurrency-551ea2f9aa1d

I agree that many altcoins are already remarkably attractive (strongly undervalued).

Why do you think Bitcoin is undervalued at the moment ?

[Ruttoshi]

Only invest with what you can afford to lose because altcoins have short life span in the market as the dump overtime. It wouldn't make any sense to DCA on altcoins and watch your portfolio dump gradually. You DCA to build and grow your bitcoin investment.

I don't see any connection with stock market and crypto market in terms of price movement only if it involves Fed. I will advise you to think of investing in bitcoin.

[asriloni]

There is a clear schism in my altcoin investment plans.

In the long run, I believe that the market capitalization of cryptocurrencies will reach more than 100 trillion US dollars in terms of USD current purchasing power and that, in a couple of decades, there will be many many Bitcoin-like cryptocurrencies with market values ​​reaching a trillion dollars. (Of course, there is a significant probability that I am mistaken and cryptocurrencies will disappear or remain marginal.)

There will be no bitcoin like crypto that will worth trillions of mcap in the next decades. Even if there will still altcoins can still survive until next decades. it can be considered as a luck. I meant almost all of crypto have no revenue. So they're only relying upon the pump and dump.

It means when they have no money, so they will be shutdown their service. We have hundreds of altcoins shutdown their service due to their operational cost. The fact that 99% of alts ain't a company who have proper product and they struggled in getting the revenue to keep themselves alive.

In the short to medium run, I predict that the prices of cryptocurrencies (and especially altcoins!) will fall remarkably, as a stock market crash is likely in the near future. I estimate that the probability of a stock market crash - a decline of at least 50% in the Standard & Poor’s 500 index from its all-time high - is somewhere 20-30% per year. (The March 2020 mini-crash showed that Bitcoin fell much more than the stock market, and altcoins much more than Bitcoin.)

This scenario may possible to happen, but most of altcoins already traded at their newlow. So i don't think the next dump will give a significant impact to the alts because they already reached their lowest.

Therefore, my long-term and short-term forecasts regarding altcoin prices are in sharp contrast.
One solution to this dilemma would be to use DCA, but set aside half of the funds for a stock market crash era ?  

DCA ain't always a solution. May you take a look at a thread made by JamesDaniel? He's regularly doing DCA to alts, yet he's still in huge floating loss. I'd rather prefer to time the market instead of DCA.

[Abiky]

There is a clear schism in my altcoin investment plans.

In the long run, I believe that the market capitalization of cryptocurrencies will reach more than 100 trillion US dollars in terms of USD current purchasing power and that, in a couple of decades, there will be many many Bitcoin-like cryptocurrencies with market values ​​reaching a trillion dollars. (Of course, there is a significant probability that I am mistaken and cryptocurrencies will disappear or remain marginal.)

In the short to medium run, I predict that the prices of cryptocurrencies (and especially altcoins!) will fall remarkably, as a stock market crash is likely in the near future. I estimate that the probability of a stock market crash - a decline of at least 50% in the Standard & Poor’s 500 index from its all-time high - is somewhere 20-30% per year. (The March 2020 mini-crash showed that Bitcoin fell much more than the stock market, and altcoins much more than Bitcoin.)

Therefore, my long-term and short-term forecasts regarding altcoin prices are in sharp contrast.
One solution to this dilemma would be to use DCA, but set aside half of the funds for a stock market crash era ? 

DCA on altcoins would be a risky move. Especially when most altcoins have failed to rebound in market price (as in, rising to previous highs). You're better off DCA on Bitcoin. In altcoins, it's either a win big or lose all scenario. Just like gambling. Their problem stems from the fact that they lack mainstream usage/acceptance.

Instead of being driven by utility, altcoins are driven by speculation/hype. With "meme" coins, the situation is worse. It's a "free market" (as in liberty), anyways. Investors will ultimately decide which coins stay afloat and which ones will fade away into oblivion. As simple as that.

[DanWalker]

DCA on altcoins would be a risky move. Especially when most altcoins have failed to rebound in market price (as in, rising to previous highs). You're better off DCA on Bitcoin. In altcoins, it's either a win big or lose all scenario. Just like gambling. Their problem stems from the fact that they lack mainstream usage/acceptance.

Instead of being driven by utility, altcoins are driven by speculation/hype. With "meme" coins, the situation is worse. It's a "free market" (as in liberty), anyways. Investors will ultimately decide which coins stay afloat and which ones will fade away into oblivion. As simple as that.

I'd still encourage folks to invest in alts rather than focus too heavily on Bitcoin. Sticking mainly to Btc might be safer approach , but we'd miss out on a lot of big opportunities that way.
That said, I partly agree with you, long term DCA into altcoins is not a smart move.

With altcoin, I'd keep it to a small slice of portfolio and stay selective with the project. Altcoin market is brutal and super risky. Things change fast, and a project that looked like a winner last cycle is not guaranteed to hold its spot in the next one.