Investors who bought Bitcoin in its earliest days and held onto it when it first started to take off saw substantial profits. The largest digital asset by market cap has performed exceptionally well in the past few years, and those investors who timed it right became millionaires. After Bitcoin started to gain tremendous popularity, more digital assets flooded the market, and right now, there are literally millions of them in existence. This can make it challenging for investors to find out the next big thing in crypto to get rich off of.
Some cryptocurrencies have been performing exceptionally well over the years, but that’s not always the case, and it’s essential to learn how to spot these crypto winners. For example, ADA has seen price appreciation in the past, and this is largely because of the strong team, scientific approach to innovation, and capped supply of the asset. Today, many investors are still keeping an eye on ada price prediction, and that’s because of the potential that this project has been demonstrating throughout the years. But not all crypto projects are worth your attention and money, that’s for sure. If you’re on the hunt for a digital currency that can make you rich, it’s essential to understand what you’re buying. Below, we provide 5 tips on how you can find a coin that has the potential to skyrocket over time, so read on!
Check the cryptocurrency’s white paper
One of the most important things to do when identifying a big opportunity in the crypto space is to check the project’s white paper. This document outlines important details about it, including the problems it aims to tackle, how it works, and its technical underpinnings, known as tokenomics. Tokenomics is essentially a combination of economics and tokens, and they illustrate how the coin’s supply is managed, at what rate the coins are issued, and how many of them. Understanding the tokenomics of a project is critical because it allows you to determine how much it will be worth. For instance, Bitcoin, Dogecoin, and Ethereum have unique rates of issuance and total issuance. More specifically, Bitcoin has an issuance of 21 million coins, while Ethereum and Dogecoin have an annual limit but a total unlimited issuance. A deflationary issuance or limited supply of an asset can contribute to the price growth of a cryptocurrency.
Look for coins with robust functionality
As you’re looking for cryptocurrencies to buy, consider what they can do. A high functionality level can appeal to developers and pique the interest of investors as well, which is often a sign that the project can attract further adoption and development. Some things to consider include:
- The cost of the transactions;
- The efficiency of the network and its scalability;
- The number of projects based on the specific cryptocurrency and how quickly that number is growing;
- The roadmap of the project for greater functionality.
Not all cryptocurrencies have high functionality; in fact, some have little to no functionality at all, so this is an essential aspect to consider when investing in a project.
Consider coins with strong price appreciation
Since cryptocurrencies have high potential, traders can still see considerable profits even if they don’t get involved with a project from the very beginning. For example, Bitcoin traders could multiply their wealth in just the past few years, and the coin has had a long history of price appreciation. While finding the next big thing is something that many investors aim for, there are many coins to dig through nowadays, and the truth is that many of them won’t be winners. So, it’s best to choose projects that have already attracted money and attention and are well-established. By nature, cryptocurrencies are worth only what the next trader is willing to pay for them, which means their value relies entirely on sentiment. This is why it’s essential to take the time to search for the most popular coins with strong trader sentiment and check if they have seen strong appreciation over time. Coins with a robust price history spanning several years are more likely to generate wealth in the future as well.
Find out what experts think about the project
Given the importance of sentiment in cryptocurrency, it’s crucial to find out what experts in the industry believe about existing and emerging projects. So, follow them on Discord and other social media platforms, and look out for their opinions. What do they think about the project you’re interested in? What coin ecosystems are they utilizing for their next project? Do they see any future potential for that specific cryptocurrency? It’s essential to answer all of these questions when relying on experts’ opinions to decide whether a project is worth your attention or not. However, remember that some individuals online can pose as experts, so you want to be aware of that and make sure that you follow only the opinions of well-known authorities in the crypto space.
Choose a project with proven leaders
Whether you’re choosing crypto or stocks as an investment, one of the best strategies is to look for proven leaders who seek to repeat their success with their next project. Pillars of the crypto community often have a good track record, so it’s not hard to find them. However, you will have to do a bit of research for that, and you want to find out what kind of projects those leaders have been involved with before, what the leaders are saying about their own projects, how other members of the crypto community regard them, and whether they’ve been involved with any suspicious projects. If you’re eyeing an early-stage crypto project, understanding the leadership is one of the best ways to determine its potential, as there aren’t any other proofs to guide you, such as price appreciation.
Wrapping it up
Finding the next big opportunity in the crypto space can take a lot of work, but it’s essential to put in this work if you want to navigate this industry successfully and reap profits. Becoming more knowledgeable about the crypto world will help you find out where the hidden gems lie.
