4 Tips for Recognizing the Next Big Cryptocurrency

0
330
views

The entire world is looking at the Bitcoin right now. Those who managed to get a hold of it early on are celebrating, while those who missed the opportunity are drowning in regret. Either way, cryptocurrencies are a new trend for investors with a potential to become a huge return on investment. However, investors are now turning their gaze toward other cryptocurrencies on the market, in order to identify the next big hit they can capitalize on.

The fact of the matter is that no one can know for sure which cryptocurrency is next in line for success. The only thing that’s for certain is that some will succeed, while others will inevitably fail. The key is to identify those with highest chances of winning on the market and invest in them before the opportunity passes. Here are a few tips on how to recognize the next big cryptocurrency.

Look at the price

The main characteristic of cryptocurrencies is that they’re highly volatile. That means that the price of a single token can skyrocket or diminish in a matter of days. Even Bitcoin reached its peak in December last year to an amazing $19.783, while now it’s priced a bit over $10,000. What’s more, the other cryptocurrencies that have seen significant increase recently, such as Ripple, Ethereum, Litecoin and others are also experiencing 30 to 40% decrease in value.

That’s why you need to look at the prices of various currencies on the market. The safest bet would be to invest in cryptocurrencies that are priced below a dollar. The main reason is that you can diversify your portfolio by investing in more currencies at the same time. That way, you can boost your investment if a currency increases in value and not lose everything if the currency fails.

Assess the opportunity

Cryptocurrencies are built on blockchain technology. The purpose and the intended use of that blockchain is a good estimate of how the currency might perform. For instance, Bitcoin’s purpose was to introduce a decentralized public ledger, which means there are no banks or governments to regulate transactions or additional fees and approval periods for transactions.

Now, currencies are all built with the same functionality, but those that copy Bitcoin’s purpose are simply not interesting. Instead, look for a new revolutionizing idea that can solve an important problem or add value with its purpose. For example, reputable sources such as the Blockchain Review can offer valuable insight into the latest cryptocurrencies and their performance on the market.

Coin supply

The maximum supply of coins or tokens available for the cryptocurrency will also determine its price. You need to carefully consider this aspect before you make any long-term investments. For example, there are only 21 million Bitcoins that can be obtained and 16.8 million have already been mined. That means that there’s only 20% of Bitcoins left and after the last one is obtained no more will be produced.

Instead, the price will vary based on the demand. Ripple also has a predetermined limit of 100 billion coins, while Ethereum has no supply limit at all. The thing you need to look for is cryptocurrencies with high supply circulation. The main reason is that they have good chances of increasing in value if the demand increases due to a supply limit.

Research the currency

There are over a thousand cryptocurrencies nowadays and either one of them has the potential of becoming the next Bitcoin. However, a lot of currencies will ultimately fade away due to lack of vision or functionality. That’s why you need to research the currency before you make an investment. For example, you might find a currency that will most likely manage to solve an important problem and thus reach success.

On the other hand, there might be a currency that also has the same intent, only it will probably manage to do it better and faster. That’s why you need to see if the team behind the currency is experienced and professional. Also, read the whitepaper to determine their goals and how serious their project is. In addition, try out their software and see how it performs.

Spotting the next big cryptocurrency is no walk in the park. Every investor is closely monitoring the market in order to find the next Bitcoin. That’s why you need to do your research well and carefully plan out your investments.

LEAVE A REPLY

Please enter your comment!
Please enter your name here