Finding the crypto diamonds in the rough – how to spot the winners 

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When Bitcoin was created over a decade ago, no one could have foreseen the meteoric rise in popularity that this little cryptocurrency was about to experience in the years to come. Those who had the inspiration or the sheer luck to purchase bitcoin in its early days, when the prices were accessible enough for anyone to jump onboard the project, and hold onto it until the crypto reached its peak, have become millionaires in their own right. Those who dismissed the initiative as a scheme that was destined to fail, regret they haven’t seen the signs early on which caused them to miss such a unique opportunity.  

Today, Bitcoin is the largest and most popular digital currency by market capitalization and the undeniable leader in the cryptocurrency space. But it’s definitely not the only crypto to come from humble beginnings and gain amazing popularity over time. In fact, that’s the story of every digital currency that has managed to capture people’s attention at some point and climb the crypto ladder. Ethereum offers another great example of that. The project started small and gradually evolved into the world’s second-largest cryptocurrency as the ETH price continued to rise. 

The success of Bitcoin and Ethereum is repeatable and there will always be cryptos emerging from the shadows, giving investors the chance to expand their portfolios and substantially increase their incomes. So, if you’ve missed the bitcoin and Ethereum train, you shouldn’t worry too much about it. You can still catch the next ride if you’re clever enough to spot the signs and know when to jump on the bandwagon. 

But that’s exactly where the problem lies. There are surely plenty of brand-new cryptos making their debut on the market, so how can one distinguish between the winners and the losers? While the volatility of the crypto ecosystem makes it difficult to give accurate predictions, there are certain factors you should watch out for in your quest to find the next big cryptocurrency. 

The team behind the project

If you’ve come across a cryptocurrency that seems worthy of your attention and want to evaluate its chances of success, you should start by doing more in-depth research and find out who the people working behind the scenes are. A crypto project is only as strong as the team that’s working on its development. Get to know as much as you can about the founders, partners, and developers by checking their backgrounds – inquire about their studies, professional experience, most notable achievements, past projects they’ve worked on, media coverage, etc. 

Its’ also recommended to keep an eye on their activity and see how involved they are in the development of the project, whether they’re implementing regular updates, engaging with their community, responding to feedback, and so on. 

Roadmap

It’s just as important to understand what the team is trying to achieve with their crypto project. For that, you’ll need to have a look at their roadmap, which lays out their vision and documents all the steps and stages in the process. If you can’t pinpoint any clear goals or see no signs of progress after checking the roadmap, it can be a sign that the project is not built on a solid foundation, so its chances of thriving are quite slim. 

Price movements and trading volume

Price and trading volume are some of the most important markets to consider when assessing a cryptocurrency’s popularity. You can easily check prices for any active digital asset by accessing reputable trading platforms that offer up-to-date information in this respect. New entrants on the market will have lower prices which means you can purchase more of them and reap the rewards when the price goes up. A rising trend in price can be an indicator that the cryptocurrency is starting to gain momentum. 

Similarly, the amount of trading activity on a digital currency offers important clues to its popularity. It shows how often the crypto is being traded in a specific period of time. The more it’s being used, the higher the chances of rising above other players. 

Use cases 

Anyone can create cryptocurrencies. That’s quite obvious from the large number of cryptos in circulation at the moment – over 10,000 digital currencies, to be more precise. But not everyone can create cryptocurrencies that actually stand a chance to compete in the market and attract investors. That takes a lot of time, effort, commitment, and plenty of other resources that not everyone disposes of. 

That highlight the necessity to focus on a token’s use cases before deciding if it’s worth investing in it or not. The way the crypto can be used in real life will have a determining influence on its success. 

Adoption opportunities 

Cryptocurrencies that mimic what others have done in the past have lower chances of making it to the top. The crypto ecosystem is constantly evolving, with new features and functionalities enriching it. Investors and traders have no interest in digital assets that don’t bring anything new to the table. If that were the case, all cryptos would have more or less the same potential.  

But as it is, the cryptos that have the best odds at succeeding are the ones that come with a different proposition than the rest and thus secure an advantage over their competitors, making them more likely to be widely adopted. 

Supply 

The supply-demand ratio is another essential aspect to keep in mind. While most digital assets have a fixed supply, others are limitless (such as Ethereum or Dogecoin). The basic rules of the economy state that higher demand and lower supply lead to higher prices. Therefore, it’s necessary to check the cryptocurrency’s maximum supply, how new coins are being mined and how many coins are already in circulation. That’s not a set-in-stone rule, but it can give you a rough idea of how likely it is for a crypto to go up in price.  

It’s also worth checking the project’s following and the discussions it has triggered in the crypto community. The bottom line is you should do thorough research and learn as much as you can about a cryptocurrency before diving in. That’s the best way to spot potential successful ventures before everyone else does. 

 

   

 

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