#JCT Why do I prefer researching small-cap altcoins?
Because for large-cap tokens to rise a few more multiples, the amount of capital required is extremely large. In addition to the overall market trend, it may also require new narratives, a super IP, major news, or even coordinated capital flowing together across the entire sector.
There’s only so much money in the market. For large caps to continuously absorb a large amount of newly added capital is, by itself, very difficult.
But small caps are different.
To generate swings of several times—or even dozens of times—the required capital size is relatively much smaller. As long as there is capital, liquidity, and market sentiment to cooperate, a very significant repricing can happen.
This is also a feeling that has become increasingly clear to me after doing altcoins over the past few years:
Large caps compete on capital size; small caps compete on capital efficiency.
Of course, small caps also carry higher risk—sometimes even a higher probability of going to zero. So I’ve never believed that “a small market cap means it will definitely go up.” Instead, I think it offers higher odds.
What I do isn’t predicting which coin will definitely pump. I’m looking for opportunities where, within risks that I can tolerate, once capital moves in, the price could change dramatically.
That’s why I’m more willing to wait with spare money and smaller positions, rather than putting all my capital into betting on one outcome.
Because for large-cap tokens to rise a few more multiples, the amount of capital required is extremely large. In addition to the overall market trend, it may also require new narratives, a super IP, major news, or even coordinated capital flowing together across the entire sector.
There’s only so much money in the market. For large caps to continuously absorb a large amount of newly added capital is, by itself, very difficult.
But small caps are different.
To generate swings of several times—or even dozens of times—the required capital size is relatively much smaller. As long as there is capital, liquidity, and market sentiment to cooperate, a very significant repricing can happen.
This is also a feeling that has become increasingly clear to me after doing altcoins over the past few years:
Large caps compete on capital size; small caps compete on capital efficiency.
Of course, small caps also carry higher risk—sometimes even a higher probability of going to zero. So I’ve never believed that “a small market cap means it will definitely go up.” Instead, I think it offers higher odds.
What I do isn’t predicting which coin will definitely pump. I’m looking for opportunities where, within risks that I can tolerate, once capital moves in, the price could change dramatically.
That’s why I’m more willing to wait with spare money and smaller positions, rather than putting all my capital into betting on one outcome.