This is one question that continually bugs a lot of crypto investors, especially the noobs. Each class of investment comes with their own risk and inherent benefits, but the question is which would you go for and what? To answer that question let’s do a dive into these 3 asset classes and see what they are about;
Large Cap coins: These are the coins you see mostly in the top 10 or sometimes outside of that on Coingecko. These tokens usually have over a billion in market cap and can be described as the top dogs. Some examples include; Bitcoin, Ethereum, Solana, BNB, Polkadot, Avalanche, Chainlink, Matic, Algorand, Litecoin and the likes. Investing in these coins can be classified as safe because they are already established names and the risk of them crashing or their founders pulling a rug pull is little or non-existent. However, the set back with these is that you cannot expect them to pull in the same gains like the low and mid cap pull. A 10% increase in the price of large cap coins is celebrated, and a 20% increase in a day is seen as a big win. So in a way you could say that buying this makes you settle or less, but they can also be classified as safe assets.
Mid Cap coins: These are a more risky asset class than the large cap coins, but as expected they also come with more rewards as well. While the large cap coins give you a 10-20% increase in a day, you could easily be getting anywhere from 50 to as much as 200% increase in a day from mid cap alts. Another beautiful thing with these coins is that their market caps still have room for growth and so you can most definitely expect good returns. Some examples of mid cap coins are; Raydium, Hive, Star Atlas, AllianceBlock, PolkaStarter and a ton of others. These coins have huge chances to grow and while they are slightly more risky than the large cap coins, they can still be classified as safe assets when compared to the low cap coins.
Low Cap coins: As can already be predicted, these are the most risky asset class. It is in this category that the most scams and rug pulls happen, and anyone looking to invest in low cap coins must have a high risk tolerance. We see a lot of these coins today, from memecoins which are blatant scams with no utility, to shitcoins which are quick money grabs for their founders, low cap coins require the investors to be very smart and know when to get in and out.
The choice of which asset class to go up depends on the individual's risk tolerance and what they hope to achieve. For rich investors looking for safe assets and seeking to safeguard and maintain their wealth, large and some mid cap coins are the way to go. But for small investors with higher risk tolerance looking to exponentially grow their wealth, low cap coins are definitely the best way to do that.
