Liquidity vs. Hype
In 2020, I dove into crypto, satisfied I had discovered the way forward for finance. Like many, I made early errors — throwing 80% of my funds into one altcoin, solely to look at it crash. That painful lesson taught me that hype isn’t sufficient — liquidity and actual worth matter.
Immediately, many altcoin buyers really feel the identical sting. The widespread perception is:
“There are too many altcoins, and that’s why they’re underperforming.”
It is smart. 40 million tokens have been created since 2021, flooding the market. However right here’s the reality — most are nugatory. The true concern isn’t simply provide; it’s the place the cash goes.
Sure, the variety of altcoins has exploded. However after we filter out the junk, solely a number of thousand have actual liquidity and buying and selling quantity. The overwhelming majority of tokens have zero financial worth.
If provide was the true concern, we’d see all altcoins crashing equally. As an alternative, the market is diluted, which means cash is unfold too skinny throughout too many tasks.
When new altcoins launch, they take liquidity from current ones. As an alternative of some sturdy tasks getting a lot of the funding, capital is split amongst a rising variety of tokens. This makes it tougher for strong altcoins to draw sustained investor…