How I Spot the Next Winning Cryptocurrency?
The thing about cryptocurrencies or alt-coins, specifically, is that the investor, AKA you, needs to be able to spot the next big thing. This is not always easy!
Nor it is a 100% accurate science.
Nothing is guaranteed or certain and this is very much applicable to cryptocurrencies.
But you could attempt to follow some guidelines to make sure that your effort is put in the right direction. There are hundreds of coins created a day and you should navigate this space carefully.
What is a ‘winning’ cryptocurrency investment?
For me, a winning investment is one where I am able to recover my initial investment + profits. Recovering the initial investment is a must. But the profit can vary from a few dollars to thousands.
I still haven’t struck my luck to win a 1000x coin or a few hundred thousand profits.
So, I will reveal to you some steps I take to make sure my investments aren’t lost.
Disclaimer: like I said previously, none of these are guaranteed ways to win in crypto. These are some steps I make for me to justify my investment strategy. The same may not work for you.
How I Pick Winning Cryptocurrency Investments
Always…always do your own research. And don’t be scared by the word ‘research.’ This could mean something as simple as checking out the project’s social media profiles to see if they are real. It could be just checking out their website and seeing how professional it looks. Have they invested any time and energy into building these platforms? Or have they just slapped on a free theme on a website and call it the next big thing in crypto?
How often does the project team communicate on social media? Telegram is a great place to meet and talk with the development teams behind a crypto project. Ask questions and see if they respond. Do they actually look like they know what they are talking about? Or are they just gaslighting the project?
On Twitter, check out how many followers they have. Of course, the larger the number is, the better. But they could easily buy followers. So, check out their Tweets and see if the likes and retweets correlate to the follower count.
Check to see if the project is audited by a reputable crypto auditor. You don’t really have to learn coding languages. The auditors put green and red flags where necessary and explain what they mean in simple English. So, at least just scroll through the audit report and see what you are getting into.
- Always go for KYC projects
KYC stands for Know Your Customer, a term popularly used in the banking industry. Usually, this is when the bank requires the customers to verify their identities before they do any banking business. In the crypto space, this is flipped.
KYC's are done for the project owners. This is not necessarily done to the public. But they can reveal their identities to a third-party organization under the promise that if they do something illegal or unethical, the third-party organization has the right to reveal the project owners’ identities.
While this is not a sure-fire way of ensuring the security of your investment, people tend to do less evil if their identities are revealed.
So, always try to go for projects with KYC certificates.
- Check the trends
Cryptocurrencies or more specifically, altcoins, follow the latest trends in the crypto space. There are new developments taking place in the technologies behind cryptos almost every day. And each one looks more attractive and unbelievable than the last.
So, naturally, people jump on to the latest project with the most vibrant features and potential.
I use Twitter to keep track of what is happening around the crypto space daily.
Another good place to scour new projects is on Pinksale.finance. This is a cryptocurrency launchpad, and by far, the most popular one. I browse through the upcoming projects and do my research as I’ve mentioned above. Pinksale also has two little flags that say ‘KYC’ and ‘Audit’ next to the project title which tells us that this project is audited and KYC certified. If you don’t see these two flags, you should think twice before investing.
- Check Tokenomics
Tokenomics refer to the allocation of all the tokens of a crypto project. It doesn’t really matter how many tokens are there, but it matters how they are being allocated.
Most projects allocate tokens to presales, liquidity, marketing, development, airdrops, token burns, locked, and unlocked. There are no golden rules to how much of what should be there.
But as a rule of thumb, marketing and developer allocations should be less than double digits, there should be around 25% allocation for liquidity, and there should be a substantial amount of tokens locked.
- Check the Roadmap
Almost all the projects have a roadmap lined up which shows what the team plans to do with the project. A lazy roadmap would be one that only plans for around 6 months ahead or just use filler words like ‘to be decided.’ Then you know the developers have no clear vision for the project. A good roadmap would have clear and concise goals and targets.
Also, when I say goals and targets, reaching Telegram members' goals, Twitter followers' goals, and the number of token holders’ goals don’t count. These are not plans for the project development.
- Don’t follow every Tweet by crypto influencers
While crypto influencers are a great place to look for the next 100x coin (as these people hype projects anyway), chances are you might be too late on the train. These influencers usually promote a project being paid for by the project or if they have a personal bag in the project. Chances are your money will end up in the influencer’s wallet.
- Check the charts
If you are not buying from a presale (where you would not have a chart yet), make sure to check the charts of the project. This will give you some idea of what price action is possible for this coin. If the price is down by about 50% from its all-time high, there is a chance it can bounce back. But at the same time, see if there are active trades happening. Usually, the chart providers such as Dextools, Poocoin, or any centralized exchange like Binance, or KuKoin will show live trades. If live trades are very slow, the project might be already dead. Generally, the more active, the better.
- Only invest what you can afford to lose
Never invest borrowed money or money that you will need for something else in the near future. Nothing is guaranteed in the crypto space, or investments, in general, so be prepared for some wild swings.
So, these are some little things I make sure that I’m putting my money in somewhat secure avenues.
What do you do to discover the next big cryptocurrency? Comment below.