Hello, I'm very new to the alt crypto currency scene and I'm just beginning my research on basically everything so please excuse me if this sounds simple.
My idea is to invest a small sum of money over 5-10 alt coins (no idea which ones as of yet) for the long term say 2-3 years.
If I invest for example $10 in an altcoin with price currently at $0.10 per coin I would have 100 coins in my wallet. If I were to check the price again in one year to discover that the price has increased to $0.20 would I have made 100% percent profit? Is that basically how it works?
What are the risks involved with an altcoin that is really cheap say $0.01 but with potential to increase a lot in value compared with a more popular and well established coin in the top 10 which is worth for example $50.00 per coin?
Thanks.
If I understand your first question, you are correct in what you said. If a coin doubles in price (i.e. $.10 to $20) then you made 100% profit. If it triples in price, then you made 200% profit (although there is technically no such thing as >100%... investors talk in those terms).
As to your second question, there is incredible risk in investing in ANY coin right now. The market is still VERY volatile. You could quickly lose 50% of your investment any given day. So only invest what you are prepared to lose.
As to the logic to your question, don't focus on price of coin. Focus more on market cap. For example, Ripple is currently worth $.24/coin. However, it has a $10B market cap. Thus (in very general terms), its potential of 10x in value in 2 years is probably less likely than something like WAVES or ANS 10xing, because the latter two have much more room to grow without hitting ridiculous market caps. Obviously just because something has a lower market cap does not mean it is more likely to grow (in fact, there's an argument that the opposite is actually true). I only make the statement because I assumed you correlated price to potential. Price has nothing to do with potential. Market cap has more correlation to potential if you want to make that bet.
As anyone else would say, the biggest indicator of success should be based on your own research. My criteria is investing in a product that I think looks promising and has a relatively low market cap (under $400 Mil), with the exception of BTC and ETH. Some interesting projects I recommend RESEARCHING (always do your own research) are Antshare/NEO and Golem (full disclosure, I have a stake in both). Those both fit my criteria of strong potential. I would also recommend always holding a little BTC - I still think it has potential growing significantly. ETH is risky at this point, but it's still an extremely interesting project.
Good luck! Feel free to reach out to me if you have any questions. I'm willing to give my thoughts on things. I'm obviously not an expert, but I'm always willing to spit ball ideas and help where I can!