Altcoin Indexes Outperform Bitcoin and Small Caps Lead the Market
Crypto markets are on a roll and it is the altcoin indexes and small cap coins that are outperforming Bitcoin. You might be asking yourself, why? Well, there are a number of reasons, but let’s take a look at some of the most noteworthy ones.
Why Altcoin Indexes are Outperforming Bitcoin
1. Low correlation – One of the primary reasons altcoins have been able to outperform Bitcoin is because of their low correlation with the top cryptocurrency. This means when Bitcoin takes a dip, altcoins are less likely to follow, allowing for the index to remain relatively unaffected.
2. Diversification – Altcoin indexes track a basket of different coins, with low correlations to one another. This makes it easier to spread your risk across different coins, while still benefitting from the gains of the entire market.
3. Smart Investment Strategies – Many altcoin indexes employ strategies such as rebalancing, which helps to capitalize on different coins’ strong performances. This helps to maximize gains and minimize losses, making it a smart investment for any crypto enthusiast.
Why Small Cap Coins Perform Well
1. Smaller circulating supply – Small cap coins, by nature, have a smaller circulating supply and can often experience higher rates of appreciation than the larger cap coins.
2. Higher volatility – Small cap coins often experience higher volatility than their larger counterparts. This means they can potentially magnify gains and losses, which can be great when done right.
3. Lower fees – Smaller market caps generally attract less institutional money, resulting in lower fees when buying or selling. This means you get to pocket more of the gains when investing in small cap coins.
Overall, altcoin indexes and small cap coins are outperforming Bitcoin because they are less correlated, provide great diversification opportunities, employ smart investment strategies, and benefit from higher volatility and lower fees.
So if you’re looking for a way to make the most of this bull run, altcoin indexes and small cap coins are definitely a great place to start. Just remember to do your own research before investing and stay away from the FOMO – Fear Of Missing Out!
