How to Evaluate Altcoins Like a Pro (PART 1)
Most altcoin "research" is just hopium disguised as analysis. After making and losing fortunes on alts, here's my systematic approach to separating future winners from expensive lessons:
My Evaluation Framework:
Define Success Before You Buy
Before entering any altcoin position, I write down exactly what needs to happen for this trade to work. Forces clarity on thesis and realistic expectations.
Example: "This DeFi protocol succeeds if TVL grows 3x from current levels due to their yield optimization advantage." Clear, measurable, achievable.
Without defined success criteria, you're just gambling with extra steps.
FDV/TVL Sweet Spot Analysis
For DeFi plays, 0.4-0.7 ratio is the healthy range. Higher isn't automatically bad, but you're paying a premium that needs justification.
Real application: Found a lending protocol at 0.3 FDV/TVL while competitors traded at 1.2+. Same functionality, better valuation. Easy 2x when ratios normalized.
Context matters more than absolute numbers - always compare against sector peers.
Alpha vs Beta Positioning
New narratives create clear hierarchies. Liquidity flows to leaders first, then trickles to followers at roughly 1/10th the performance.
Strategy: For alpha plays, focus on first-movers with network effects. For beta plays, find unique angles or features that differentiate from the pack.
The harsh reality: Most alts are beta plays pretending to be alpha. True alpha projects are rare but deliver life-changing returns.
Part 2 covers team analysis, tokenomics evaluation, and my current watchlist methodology.
What's your biggest challenge in altcoin evaluation?
#AltcoinAnalysis #CryptoResearch #DeFiStrategy
