Analyst: 90% Of Smaller Crypto Projects Will Result In Complete Loss

The latest news and headlines on our DC Forecasts crypto news site feature one fundamental analyst who picked up steam in the crypto waters for saying that the majority of the smaller crypto projects and not-known altcoins will result in complete losses.

In times when Bitcoin is stabilizing and trading over the $4,100 margin in a slow and steady climb, traders everywhere are rejoicing over the so-called altcoin season that is upon us. Still, before we celebrate the new surge and the start of a new bull run, it is important to see the fundamental statistics.

According to the fundamental analyst who is known under the Twitter handle “Wolf of Qtrade.io” – the vast majority of the cryptocurrencies on the market will result in “complete loss” for investors who are playing the role of venture capitalists by funding projects with little to no use in real world.

The self-proclaimed crypto trader has taken to Twitter to express his concerns in investing in smaller crypto projects.
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He also compared crypto investors to venture capitalists who invest in startups with a high rate of failure.

Failure can be a gradual process, or a sudden one, failure can be complete or partial, but assuming that 90% of your investments in smaller crypto projects will result in a complete loss is a pretty realistic starting point.

— Cryptic Monk (Nyzonian) (@cryptic_monk) March 18, 2019

The trader’s concerns are not that much about investing in cryptocurrencies – but more about the fact that uninformed cryptocurrency investors don’t appear to understand the risk to reward ratio in investing in crypto projects.

The trader also claimed that smaller crypto projects are unproven and often have tiny teams – hence their similarity to startups.

The most common crypto project (by numbers) consists of a relatively small core team, say, one really dedicated person up to maybe 25 core team members, a few hardcore fans, and a somewhat larger, loosely attached community consisting mostly of hopeful "investors".

— Cryptic Monk (Nyzonian) (@cryptic_monk) March 18, 2019

“No matter how these small projects are financed (via an ICO, premine, fair launch, dev reward, self-funded etc.), they are essentially young startups in a completely unproven technological field. Such startups are known to have an extremely high failure rate of about 90%,” the analyst explained.

The “Wolf of Qtrade.io” also said that only Bitcoin, Ethereum and Monero are the coins that have “traction” and ones that should make up core crypto exposure.

“There’s no denying that there’s a realistic chance that somewhere in the 10% of the projects that survive lies a gem that ends up providing a 10x, 100x, or even 1000x return on investment,” he said.

Overall, his thoughts are very much in line with the other traders in the crypto community which now recommend investing only in the cryptocurrencies one can afford to lose and building the portfolio around high-cap coins such as Bitcoin and Ethereum.