Over the past decade, digital coins have become a part of today’s life. However, since this market is still relatively new, this means that promising cryptocurrencies will continue to emerge.
Those who realized that Bitcoin held a lot of promise early on and have bought it for less than $1,000 were able to make a fortune on it. Today, despite the forecasts which say that the main cryptocurrency will continue to go up in value, not everyone can afford to buy it for $9,000.
As the cryptocurrency market is still at the early stages of its evolution, it makes sense to keep a close watch on the newly-emerging coins that can become the next Bitcoin and result in a high return on investment in the long run.
1. Promising cryptocurrencies: How to spot them
2. Be on the lookout for cheap coins
3. What makes the cryptocurrency unique
4. How popular is the new cryptocurrency
5. Keep close tabs on the price charts
6. Who created the cryptocurrency
Promising cryptocurrencies: How to spot them
We have already mentioned that initial coin offerings (ICO) are still being conducted in the market. Some of the coins are bound to have a long and successful future, while others run their course after a while. Below are a few criteria you can use to evaluate digital coins before you decide whether or not to invest in them.
Be on the lookout for cheap coins
It stands to mention that investing in cryptocurrencies involves certain risks, especially if you are analyzing the digital coins shortly after they appear in the market.
You should keep in mind that there is always a chance that your investment may not pay off. This is the first reason why it makes sense to check out inexpensive cryptocurrencies.
Do not forget that the prospects of cryptocurrencies that have already soared several times can be hit or miss. If the increase in their value was fueled by the hype around them, the price may drop again over time, and you will incur losses instead of seeing your investments grow.
What makes the cryptocurrency unique
The future of the cryptocurrency is often associated with its use as a means of payment or a tool designed to tackle other practical tasks. If the value and uniqueness of a digital coin are evident, it can be considered a promising instrument to invest in. However, if the new cryptocurrency goes up in price only because it sparks interest as a speculative asset, the chances that it will plummet are pretty high.
How popular is the new cryptocurrency
We have already established that undervalued cryptocurrencies that offer a practical advantage in terms of their use can have growth prospects. However, the fact that it is undervalued doesn’t necessarily mean there is a lack of interest in it. Keep in mind that demand is what drives up the price. That means the cryptocurrency should be talked about in the crypto community and beyond.
When hunting for promising cryptocurrencies, make sure to keep an eye on the news feeds of the websites about the crypto world, as well as the forums for crypto traders and crypto investors. That being said, do not treat everything you read there as the ultimate truth.
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Keep close tabs on the price charts
The cryptocurrency rate, or rather, its dynamics, is among the most illustrative factors that must be analyzed if you wish to make a truly informed investment decision.
Carefully monitor the price of the chosen digital coin.
If the way it moves is similar to the general dynamics of the cryptocurrency and Bitcoin market without any major spikes or drops, this instrument can be considered promising. In contrast, the high volatility of the exchange rate points to the fact that cryptocurrency is popular chiefly among speculators, whereas big investors avoid it.
Who created the cryptocurrency
Nowadays, you can regularly hear major companies (e.g. Facebook’s Libra project), and other less-known developers announce their plans to conduct the ICO and issue new digital coins.
The prospects of the cryptocurrencies issued by famous developers are typically higher which is explained by their overall standing and solid reputation gained in the market of other financial instruments. Knowing that the emerging coin has growth potential and will most likely go up in value, a lot of investors are ready to invest in the project even at the stage of preparation for its launch.
What to know:
Do you wish to sell or buy digital tokens profitably?
Read, how to trade cryptocurrency profitably!