By now, most people are aware of the multiple Bitcoin bubbles that turned early speculators into crypto billionaires. And, while Bitcoin now sits at a value of around $70,000, making the same 10x profits very difficult to replicate, Bitcoin is just one of hundreds of existing currencies and thousands that are preparing to launch.
In particular, the number of meme coins that are exploding onto the crypto market means that there is still an opportunity for people to make money.
Below, we look at some of the best sources for people who are on the lookout for the next big one to buy. But, before buying, remember that cryptocurrencies are volatile by their very nature. That’s what yields the big profits, but it also means high risks.
According to Mensholong Lepcha, investors need to do their due diligence when considering any coin to invest in, to help avoid significant investment losses.
Look For Celebrity Endorsements
Dogecoin has been one of the biggest surprises of the past few years. Before it became popular as a deposit and withdrawal method at crypto betting sites, it was something of a social media phenomenon. It generated a massive amount of interest on Reddit, and its price rocketed especially after Elon Musk got involved. His tweets about Dogecoin saw him facing a lawsuit for possible insider trading. Musk’s tweets saw upwards of 15% added to the price of the cryptocurrency, which was originally established as a joke, and this is the power of celebrity endorsements. Look for coins and tokens being shilled by celebrities and do your research before considering buying.
Check For Regulatory Updates And Law Changes
For years, crypto buyers have been calling out for regulatory changes. In particular, they have called for ETFs to be allowed. When news finally broke that the SEC would allow Bitcoin ETFs to go on sale, it saw prices increase. Even before that, the slightest mention of a government backing cryptocurrencies would see prices rise.
Conversely, as governments warned against them, or banks prohibited their users from registering with and depositing on exchanges, prices would drop. Keep up to date with the cryptocurrency market and especially listen out for hints that regulations and laws might change when it comes to certain types of coins.
Read Crypto News
As well as scouring the news for changes to cryptocurrency regulations, stay on top of crypto news in general. While cryptocurrency is enjoying a lot more interest than ever before, it is still relatively underdeveloped compared to other investments. This means that even the slightest bit of news can cause a big price swing. However, there is a trading saying that you should buy the rumor and sell the news. This implies that by the time something reaches the news, it has already been accounted for in price changes.
Follow Other Investors
One way to identify potential purchasing opportunities is to follow other investors, and analysts. This has long been popular in share trading, with some of the biggest analysts keeping traders up to date with their rating of shares and whether they believe a stock is a buy, a sell, or a hold.
Cryptocurrency attracts analysts, too, and there are some highly skilled investors out there. If you are considering following an investor, you will need to research them as deeply as you would any coin you are going to invest in. Look at their trading history, determine whether they have a reason to promote or bash a coin, and ask yourself why they are providing this advice.
Check Upcoming ICOs
An ICO is an initial coin offering. When a new crypto or token launches, it initially launches through an ICO. At this time, it is possible to buy some cryptos at a fraction of their likely trading price. And, when the coin moves from ICO to the main market, it could see a big boost in its price.
You can also find some ICOs that offer discounted purchases or other bonuses to early investors. And if you do find a hidden gem in the ICO list, you will get in on the investment before the masses. When the crypto’s value is then spotted and the rest of the market gets in on the action, your investment will increase.
Checklist
However you find potential cryptocurrencies to invest in, you should always do your own research. By all means, use analysis of others and even use other traders as a guide to which cryptos to look at, but be prepared to do the legwork yourself. This will give you the confidence that your potential purchase has less risk of losing you money. During your research, check the following:
Use Cases
Utility coins are those that have some purpose, other than just being a trading coin. Some are designed for sending and receiving money. Some aim to improve the speed or cost of crypto payments. Some are used for healthcare or supply chain management. If you aren’t looking into meme coins, find the use case and determine whether it is viable and valuable.
Tokenomics
Tokenomics, or token economics, is an important factor in determining the success or failure of a new crypto. It includes details like the number of tokens that will be created, how they will be distributed, how many tokens the founders and other stakeholders will receive, and whether the token has a limited or unlimited supply. Cryptocurrencies usually publish these details, but it can take a little digging to uncover the whole truth.
Founders
Who are the names behind an upcoming cryptocurrency? They don’t necessarily need experience in establishing cryptocurrencies, but if they have experience in business or economics, that can be a good sign. Certainly, you should ensure that the founders have not had any failed attempts at launches in the past and they have not been involved in any shady cryptocurrency deals.
Coverage
It isn’t just the founders of a cryptocurrency you need to investigate. Look at other stakeholders. Does the coin have a good marketing team? Is there already a buzz about the coin on social media? Does it have a use case that is currently newsworthy and relevant? All of these factors can point to cryptocurrencies that are most likely to get some leverage when they launch.
Roadmap
A roadmap is basically a timeline of the cryptocurrency’s plans. It will include information on when they plan to launch, whether they intend to create new tokens, and even whether they have any marketing and advertising plans. If the currency has already hit previously outlined milestones, this is a good indication that the team behind the currency is reliable and that they are likely to hit future targets, too. If they’re already failing on early milestones, it might be best to give them a wide berth and look elsewhere.
Conclusion
Cryptocurrency does still hold opportunity for the first investors, especially with the recent surge in meme coin popularity. However, crypto trading is different from stock trading and potential buyers need to ensure they are buying into sound opportunities and that their risk is minimized by choosing a suitable token. Find opportunities in the news, on crypto websites, and from analysts, before doing your own research and ensuring you make the right buy.
