Topic: Trading an Expensive Coin vs a Cheap Coin (Read 334 times)

I will do step by step like this:

• Check total supplies (on coinmarketcap or official website of each project).
• Check current circulating supplies.
• Check total premined/ instamined/ hidden-mined coins, shortly called as premined ones by using explorers. Remember that given specifications on ANN threads or whitepapers might be incorrect and you must check it. See my guide below.
• Calculate the percent of circulating/total supplies, left/total supplies, premined amount/total supplies.
• Look at price chart to see the current price is at all time high range or peak. If price currently stays at all time high range or peak, it is never good to jump in, no matter how expensive or cheap one coin is.

Steps 3 and 4 help us to know how greedy developers are with premined coins and how many percent of total supplies have been already mined.

If one coin has exponential pattern of circulating supplies in early period, it is risky because developers and early investors can get profits and dump their coins, that will wash the coin price down like toilet paper.

If developers hide details on premined coins, it means they are too greedy and they are not good developers because of their lack of honesty and transparency.

[3] [Guide] Identify scam projects by hidden premined coin indicator via explorer

Your question is valid and many beginners fell in the trap of buying coins because they were thinking they were "cheap".
In fact there is a catch here. It is the total supply of the tokens. Multiply this number with the current price and you will get a number that informs you of the current market cap of this token, which you can consider the current valuation of this coin (just as the valuation of a company).
Now try and make sense with these numbers. Is for example the coin ICON correctly valuated at 100m USD today? To answer that, you have to ask more questions as: Does it have a working product? How many people use it? Are the developers creating anything new? Has it solved the problem it claims to be solving after 3-4 years of activity? (ICON was an example here, I have no idea what it does to be honest).
It is hard to figure if a coin is expensive or cheap. Marketing is making this process harder as it inflates prices. I usually try to look into projects that use less promotion and try to figure out if they have any decent chance. Most of them have another 95% to lose from their current price.

Another question to talk about is whether you are investing or just trading. i see it this way. coins with little cap and circulation tends to be expensive and make huge market movement but coins with huge market circulation and little market cap are cheap and doesn't make much profit while trading.

This post explains it best.
In the end, they are both equal except the one which has more volatility which can yield more percentage points for the same amount of investment.

I think the altcoins are more volatile compared to BTC. Would you agree?

JH

It's a timing-based of selling and buying.

The 'buy low and sell high' strat of all time.

All altcoins are pure speculation, they add no value on top of Bitcoin which they copy-pasted and change minor things.
They could change supply so from 21 000 000 they could make only 2 100 000 or even 999 999 999 999 999 999 as total supply, so value will be dependant on that too.

Summary of that is, if you planning on trading based on price of altcoin, you doint it wrong. You don't understand technology that you investing in. Because of that you would have similiar results trading sea shells or beach sand sadly. Its maybe harsh words but thats reality, first go back to basics. Read about Bitcoin, why its special as new technology, what are altcoins, but not in 2 words but more detailed explanation.

Good luck and have fun during learning

The price of a coin is irrelevant to that, there are coins that cost hundreds of dollars and they are still shitcoins and even Dogecoin, which is priced in satoshis is better than them.

And you think about trading in a really wrong way, it's not a get rich scheme, it's a get poor quick scheme because shitcoin markets are rigged, tons of shitcoins are just scams or have no fundamentals. This isn't a 2017 anymore, when you could invest in any altcoins and see huge profit.

Stop being greedy and buy Bitcoin, it's the only coin that is worth investing for a newbie.

What altcoin has a higher volatility rate than BTC? You did not mention volatility in the OP.

I have your point because I used to agree with you, but it was not entirely like that (specifically altcoin top 50 CMC).
Say you have a capital of $10.000 to buy:
- 1 BTC in the price of $10.000, or
- 1000 BNB in the price of $10
then BTC prices went up by 10% followed by BNB which also 10%, so the latest prices are both:
BTC = $11000, you profit $1000
BNB = $11, you profit $1 each times 1000 BNB = $1000

If in your case you find an altcoin that has a higher volatility rate than BTC (eg, 2x), then it is clear that altcoin is recommended but still has a greater risk of loss. In fact altcoin follows the price of bitcoin with a difference that is not too significant.

How do you get a better profit with bitcoin when its price is higher and the quantity you get is lower, and it moves in less percentages compared to a cheaper coin?

JH

Depends on the cheaper coins that you are about to choose. Not all of them are good investments even they are cheap.

Like bitcoin as an expensive coin, this depends on how much you will invest. It's likely to be the same amount invested to the cheaper coins. You can get a better profit with bitcoin although it's cheap and the quantity you'll get is lower.

Bitcoin has a great volume unlike the possible cheaper coins you will buy, they might have drop their volume as soon as you buy.

Let me re-phrase the question in another way.

Do the cheaper coins have a greater chance of doubling my investment (because of more volatility) than investing in a more expensive one which takes ages to move even 10% of the cheaper coin?

Furthermore, if I invested in the more expensive coin, I would be purchasing less coin with the available BTC I have, and thus the profit would be lower compared to the same move on the cheaper coin - right?

Would it be better making 5% on a cheaper coin or 5% on a more expensive coin?

JH

You can put your funds in cheaper priced coins but the terms of the expensive coins you will get more profit at the long team. For example, BTC, if you will put some of your investment in this also you will be always at profit side because its value is always in peak and also next month BTC halving will occur so you may see the difference in its price.

It makes absolutely no difference which one you pick.

If you have 1 bitcoin to put into trading:
Coin 'A' costs 0.01BTC.
Coin 'B' costs 0.1BTC.

You can buy 100 of coin A or 10 of coin B. The price per coin is irrelevant. In either case you have still bought 1 bitcoin's worth of the new coin. If you sell immediately, you still end up with 1 bitcoin.

If coin A increases 100% to 0.02BTC and coin B increases 100% to 0.2BTC, and you sell, again it makes no difference which coin you bought, you still end up with 2 bitcoins, and a 100% profit.

Don't look at price per coin, it has no meaning in itself as a single value. Instead look at trading volumes on that coin, and its price history. Low volume coins are a huge gamble because a) they are more prone to manipulation, and b) there is often a big gap between bottom sell order and top buy order, which means you are at an instant loss that you'll need to recover in order to just break even.

You guys are being confused between trading vs buying. Buying is like when you buy popcorn or soda, you tend to choose a more affordable brand to get more. But trading is different. The ultimate purpose of trading is to gain profit, i.e to increase your bitcoin (or USDT or any other stable coin) so it does not matter if you choose a cheap or an expensive altcoin. If you buy a coin at 1000 satoshi price, a few days later it increases to 2000 satoshis, you double your investment. Reversely, if you buy a cheap coin at 4 satoshis, next day it plunges to 2 satoshis, you lost half your fund.

The more important thing you should pay more attention is market cap. Marketcap = Price X Circulating Supply. Two altcoins with different prices and different circulating supplies can have the same marketcap. Cheaper or more expensive logic does not make any sense in this case. That said, do not ever take a look at shitcoins with tiny pathetic marketcaps.

Generally, I choose altcoins with decent market caps (top 100 CMC). They are mostly well-known altcoins and have acceptable volumes. Why volumes? Investing is taking risks. Good volumes result in high liquidities. It help you cut losses easily when the market goes against your will.

P.S: If you are serious with trading, it is recommended to take a technical analysis course. It is still dangerous to blindly put your bitcoin into some well-known, decent market cap altcoins. Entry, take-profit and stop-loss are much more important but it is too difficult to talk about them in a post.

First, a short look at the coin prices on CoinMarketCap is not enough to make a sensible investment decision. Before investing in a project you always should do your own research. That means you check the projects website (1), read the whitepaper (2), observe the projects social media accounts (3) and read several articles about the project you want to invest in (4). Ask yourself: Does the coin really has a usecase? Or is it another shitcoin with no purpose (Or even worse: Is it a scam)? Can the promises made be kept? Are there competitors that are better?

When you checked all of the above and you are still confident to invest in the specific coin the next step should be to check the coins current price. When checking the price you should always keep the total coin supply in mind. If the total supply is comparatively low, the coin is usually priced higher and if the total supply is high the coin is usually priced lower. Nevertheless, these prices say nothing about whether it is a good or bad coin - only your own research will.

I think its better to invest in cheaper one. If you invest in cheaper one, you are able to buy more coin than the expensive one. So when the market is up, you can make more profit due the the amout of the coin.

Before invest in a coin, you must know some information about the coin.
1. Total supply of the coin
2. How many exchange the coin is tradable.
3. Price graph of the coin
4. 24 hours Volume of the coin etc.

Price is not really important while choosing coin for investment, if you are buying a coin which is worth of 100 bitcoin per unit but you are the only one bought it for that price and there is no demand for that coin means its simple waste of your money.

So investing in high market cap valued coins vs low valued coin will give some idea towards about which to investor.

My practical answer is that you would be able to invest more on the cheaper ones, a matter of quantity over quality perhaps. The disadvatange will not depend on the price of the coin wether it is cheaper to the other coins or more expensive, but its potential to have a market price increase. No matter how little its price is, if it is really a good coin, then profit will be earned same thing with investing to a quite expensive coin, if its price will go downward, no profit will be earned.

The total token supply would be a good basis indeed,  to determine whether its price has a chance to go up or not.


But in my opinion, the market situation is a huge determinant of such thing. Its influence is that it can drag down or push a market price of crypto or market prices in general.

Choosing between a more expensive coin than a cheaper one to trade would seem to be a matter of picking your own poison, because there's no hundred percent assurance that the coin you would engage yourself with, would result to profit, since the market itself is unpredictable. Just my opinion.

Look at total supply in particular.

Put it this way. There will only ever be 21 million bitcoins. How many XRP are there currently?  

From: https://coinmarketcap.com/currencies/xrp/

Max Supply:

100,000,000,000 XRP

Some altcoins are priced at 0.00001000 BTC (1000 satoshis), and then...
some altcoins are prices at 0.00010000 BTC (10,000 satoshis).

What are the advantages and the disadvantages for investing in one over the other?

Why should I trade the more expensive one when there is a cheaper one?

Trying to get my head around it.

JH