Want To Invest In Crypto? It's About Time To Consider 'Alt Coins'

If all the indications bear out, you could be hearing a lot more about crypto - and soon.

That's because it's beginning to look a lot like alt season. This happens - or is supposed to happen - every four years, about 18 months after the Bitcoin halving slows the growth of supply. The last one was in 2021; the previous, 2017.

Alt season happens when investors chasing bigger returns rotate their profits from Bitcoin into alt coins. The macro backdrop for all this is aligning, too. At the Jackson Hole Symposium last week, US Federal Reserve Chair Jerome Powell flagged a possible cut in US interest rates as soon as September, thanks to mounting risks in the labour market despite lingering inflation. Rate cuts would put more liquidity in the system, classic fuel for risk assets.

All that suggests we are back on schedule, and everyone who is invested is on the edge of their seats. If you find yourself moved by the possibility of 100x gains, understand those are hard to come by - especially when you are new to the game.

If you still want to give it a try, here are a few basics I wish I knew starting out - and that I'm keeping in mind for my first alt season, too.

Bitcoin isn't crypto, altcoins are alternatives

Bitcoin is a digital asset - scarce, capped at a 21 million supply - mostly used for storing and transferring value. The Bitcoin blockchain is the network that records and secures its transactions. I still think it's one of the soundest investments around at the moment, alt season or no alt season. This might be obvious, but altcoins refer to anything that isn't Bitcoin, even Ethereum, the original alternative and second to Bitcoin by market cap.

First, Focus on one ecosystem

Ethereum introduced the concept of smart contracts, which lets developers build decentralised apps on top of it - known as Layer 2s. Ethereum powers a huge ecosystem of tokens associated with those apps. You'll never figure everything out about crypto, or understand all that is going on. Narrowing the focus and tuning out the noise is essential to operating in a space this new and overwhelming.

Accept the fees

Crypto“gas” fees - especially on Ethereum - can feel scandalous at first, when you're used to charges in the traditional banking system. In the beginning I drove myself crazy worrying about them and trying to track them. I couldn't figure out why people weren't talking about them more. Eventually, I realised it's because there is far more money to be made in crypto than in traditional banking. Once you've made some of that upside, those higher fees melt into the cost of doing business on the blockchain.

Drama-free entries and exits

Taking profits is not that complicated - in theory. I've learned to log the date I bought something and the cost of the coin. Then I keep those entry points in mind when - hopefully -it becomes time to take profits. The plan is to take 10 or 20 per cent off the top if I am fortunate enough to hit at 2x, then rinse and repeat at each 'x'. That's happened a few times now, and I've forced myself to take profits, even when I didn't want to. Will I be able to do this, emotionally, if things get as crazy as people say they will? Let's hope so.

Buy this for stability

I'm not sure I'll ever be able to stay away from the allure of a new, promising project with a solid plan, great use case, and team behind it. But the truth is, most altcoins are super-risky. None of us needs all of our investments to be hyper‐speculative moonshots.

You don't need a lot of money to be an investor

If there is one thing that's frustrated me consistently for the last 18 months it is that I don't have more money to invest. Then I realised: pretty much everyone feels that way. (We can't all be whales, right?) The important thing is that we are planning, saving and investing.

In the group I pay attention to the most, there are people who have made millions in crypto and others who are clearly just getting by doing this. One fellow who has impressed me works all week, then moonlights doing food delivery on Saturdays and Sundays. Sometimes, he shares his tallies, and he's always so excited when he shows us the $200 or $300 (Dh734 or Dh1,101 ) he made and tells us where he's investing it. It's infectious. That kind of mindset and hustle is rare - and inspiring.

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