According to CryptoPotato, the crypto market has seen significant growth, with Bitcoin and other top assets experiencing dramatic surges over the years. However, not all altcoins have been as fortunate. XRP, for instance, has not posted a meaningful surge compared to its price six years ago.
Pseudonymous crypto analyst 'Cyclop' noted that if an individual had invested $10,000 in XRP in September 2018, they would still have approximately $10,000 today. This stagnation highlights a common issue in the crypto market: many altcoins fail to deliver substantial returns over the long term. Cyclop believes that 99% of these altcoins are doomed to dump or never grow significantly, emphasizing the need for investors to recognize and distinguish valuable projects from less promising ones.
Cyclop identified three main types of altcoins investors should avoid. Firstly, many old projects are outdated and overvalued, having lost their competitive edge and innovation. Secondly, artificial tokens, where the supply is controlled by the team or venture capitalists, pose significant risks due to value manipulation. These tokens can be pumped and dumped, leaving unsuspecting investors at a loss. Lastly, projects stemming from past trends, such as dead play-to-earn (P2E) games or those with high fully diluted valuations (FDV) but low market capitalization (MC) and constant sell pressure, are often unsustainable and typically face massive sell-offs, further devaluing the token.
In contrast, Bitcoin has attracted renewed investor interest this year. An individual who invested $10,000 in Bitcoin in September 2018, when it was trading near $6,700, would see their investment grow significantly, with the asset currently trading around $67,221. This represents an impressive increase of over 900%, highlighting Bitcoin's relative stability and growth potential compared to many altcoins. This comparison underscores the risks associated with altcoin investments and the importance of careful project selection.
