There are over 4900 cryptocurrencies on the market right now and this number is rising. What should you do?
The best analogy we can make about the cryptocurrency market is when at the turn of the 20th century, there were over 1000 automobile companies in the U.S.
Back then, everyone was making cars. Now everyone is making their own cryptocurrency. New ones are created every day!
About 99.9% of the automobile companies went bankrupt due to over-saturation and now there are just a few big ones in the U.S.
We anticipate that the same thing will happen with cryptocurrencies. Only a few big ones will remain. There is way too much saturation in the market and it is hard to really differentiate coins now because there are so many similar ones.
Why would anyone need 4900 different cryptocurrencies? Even if you get rid of 99% you're still left with about 50, which is a decent amount.
Here's a list of bankrupt automobile companies from the early 1900's...Just starting with the letter "A"...
The point we're trying to make is that history repeats itself, especially when it involves over-saturated markets. The same thing that happened with car manufacturers can happen with cryptocurrencies. We're not crypto bears, but this is something to consider when investing in a cheap altcoin since it is unsustainable to keep creating more currencies.
If you're going to invest in an altcoin, we think you should stick to the well-known ones with good track-records that have been around for some time. This will increase the chances that they'll still be around in the future. But if you want to invest in a cheap altcoin for the potential return, make sure you only invest money you are willing to fully lose; because the odds are against you. Also, ask yourself if the currency has a scalable, unique, and useful model that is hard to replicate by other cryptocurrencies.