Are Big Market Cap Altcoins or Small Market Cap Altcoins Better for a Portfolio? Analytics Company Shares Its Strategy

Cryptocurrency analytics firm Alphractal has released a new report offering insights into Bitcoin’s market dynamics and broader trends in cryptocurrency investment.

Alphractal’s analysis points to increasing selling pressure in the market, but claims that buying pressure is strong enough to potentially push Bitcoin’s price higher.

However, the analytics firm compared the performance of low-cap tokens with high-cap tokens in the cryptocurrency market. According to the analytics firm, high-cap altcoins tend to move away from their 50-day or 200-day moving averages more. Although crypto users prefer smaller and newer assets for further upside, Alphractal argues that the data points elsewhere.

According to the analytics firm, large-cap cryptocurrencies are better at:

• Performance and stability: High-capitalization and consolidated altcoins show more stable performance when examined over time.
• Large community: Large-scale projects are supported by well-established investors and supporters.
• High liquidity: Thanks to high liquidity, volatility decreases, trading becomes easier and a safer environment is created for traders.
• Solid projects: Typically have more solid developers and clear goals.

While Alphractal analysts ultimately acknowledge that smaller altcoins can offer the opportunity for high returns, they believe that a balanced portfolio of large-cap cryptocurrencies with sufficient liquidity and strong fundamentals can yield better results in the long run. According to the analysts, portfolio diversification can provide the upside of both sides.

*This is not investment advice.