Post
Topic
Board Beginners & Help
Re: I'm having difficulty seperating % gain from $ gain....advice appreciated
by
odolvlobo
on 26/01/2018, 20:28:42 UTC
However, I favour a very aggressive trading strategy (possibly not a wonderful idea, but hey, my money Smiley ), and I'm being draw to the idea that it's much easier for a $0.01 coin to go to say $0.05, than it is for a higher market-cap asset like BTC to go from 10K to 50K.

That is somewhat of a fallacy, of course. You are making some hidden assumptions. You are assuming that the alt coin will eventually be as big like Bitcoin. You are assuming that the supply of the alt coin is the same.

Well, I wasn't assuming that any coin would ever get as big as Bitcoin (although I have good feelings about Eth), but you are right about the supply - I still have a lot to learn.

My main point (which I unfortunately neglected to make) is that you can't judge the potential of a coin by its price. The price is somewhat arbitrary. For example, does Bitcoin have more potential if 1 BTC is $10,000 or if 1 satoshi is $0.0001?

What matters is the discounted future value adjusted for risk compared to the current price. If the discounted future value adjusted for risk of BTC is $100,000, then buying BTC is smart, even though the price is high. If the current price of a coin is $0.0001 and the discounted future value adjusted for risk is $0.00001, then that coin is crap even though it is cheap.