Are Cardano, XRP, Litecoin, and Binance Coin the ‘low-investment, high-return’ alts you should have in your portfolio?

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While the major coins, Bitcoin and Ethereum, surged dramatically during the recent rally, there were other altcoins that fared well in terms of both network growth and price. Notably, certain major altcoins, like as Cardano and XRP, provide market participants with a low-investment choice.

This is in contrast to other major players such as Bitcoin and Ethereum, as well as some altcoins such as Litecoin and BNB. Understanding their metric-driven data will help you determine which of them is a good investment.

High investment alts vs. low investment alts 

Market participants are more concerned with the ROIs, network strength, usefulness, long-term growth, and risk associated with the asset than with the price. But who doesn’t like low-investment, high-return opportunities? In fact, low-valued leading alts like Cardano and XRP provide a solid entry point for newcomers to the space.

At the time of writing, Cardano was trading at $2.9, while XRP was trading at $1.28. In comparison, several of the major altcoins, such as BNB and Litecoin, traded at far higher prices than ADA and XRP. Binance Coin was worth $488.97 at the time of publication, while Litecoin was at $212.54. On the back of the recent Bitcoin rally, almost all of the top alts rallied but the question remained whether the under $5 alts gave better ROIs than more valued alts.

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An altcoin portfolio

This meant that if the same amount of money was invested in a high-valued alt like LTC or BNB, the ROIs generated would be significantly lower than those generated by Cardano and XRP. But ROIs aren’t everything; what about the risk? It is commonly stated that the more the profits, the greater the danger, but is this true?

I that case, over the last three months, profits would have skyrocketed on the back of some of the low investment alts. If someone bought ADA at $1.4 and XRP at $0.72 a month ago, their ROIs vs. USD would be 110.84% and 74.96% respectively. On the other hand, the monthly ROI for BNB was at 45.76% and for LTC it stood at 54.20% at press time. Plus the low price of alts under $5 also offers exponential growth and ROIs vs higher valued alts.

This meant that if the same amount of money was invested in a high-valued alt like LTC or BNB, the ROIs generated would be significantly lower than those generated by Cardano and XRP. But ROIs aren’t everything; what about the risk? It is commonly stated that the more the profits, the greater the danger, but is this true?

Higher ROIs, higher risk?

That is, until now. The Sortino ratio calculates an investment asset’s risk-adjusted return. Consider Bitcoin, which had a Sortino ratio of 0.1181, while Cardano had a ratio of 0.1638 at the time of writing. Furthermore, despite its 14 percent daily gains, Litecoin’s Sortino ratio at the time of writing was 0.0617, far lower than ADA’s.

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On the other hand, Binance Coin’s Sortino ratio was 0.0767 while the same for XRP was 0.0861. When looking at two similar investments, in this case, altcoins, a rational investor would prefer the one with the higher Sortino ratio. That is because, the investment would earn more returns per unit of the bad risk that it takes on.

Thus, it’s always better to have a balanced portfolio, even if it’s an altcoin portfolio. Looks like in the crypto-verse diversification is the key to success.

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