The biggest winners in the world of cryptocurrencies by far are those individuals who were able to buy into Bitcoin at the earliest opportunity. For the earliest adopters who bought into this experimental, but no less revolutionary, project at this preliminary stage, the rewards have been profound. In fact, one of the common features of the world’s richest crypto investors is that they all bought in at a relatively early stage — which just proves that in the world of finance and investment, the early bird really does catch the worm!
Because of this, the desire to be an early adopter of the next big crypto project has become a defining feature of the world of cryptocurrency investment. This has helped to embed a strong sense of ‘FOMO’ — or ‘fear of missing out’ — among crypto enthusiasts, which often leads to them investing in a wide range of digital assets in the hope that they will be the first to catch the next big wave.
For those of us lacking the foresight to have bought into Bitcoin before it exploded, all is not lost. While you might not be able to replicate the massive return on investment that the original Bitcoin investors have achieved — which in reality is a once in a generation investment payoff — you can nevertheless still manage to score some early adopter gains.
With that said, in this short article, we will give you a few quick tips that will help you to keep your ear to the ground in the crypto world, which will hopefully help you to identify the projects with the most investment potential. While these tips might not necessarily allow you to predict with accuracy what the ETH price will be in a year from now, they will still help you to keep abreast of the latest developments.
When you are trying to figure out whether a particular cryptocurrency project will skyrocket ‘to the moon’ or fall flat on its face a year from now, ask yourself the following questions to help guide your decision making.
What are its prospects for adoption?
An important element of whether a particular cryptocurrency will ‘moon’, is whether or not it has strong prospects for adoption and actual usage. After all, how can you expect it to increase in value if it has little hope of actually being used?
With that said, if you can identify a cryptocurrency which is more likely to be widely adopted, this is a good sign your investment might pay off in the future.
Projects such as Ethereum are a good example of this, as they were decently hyped at an early stage while still having tangible real-world value in terms of potential applications.
What is the price now and what is the price potential?
Although pricing is not everything when it comes to securing early adopter gains, it is still incredibly important.
An important thing to remember, however, is that the final price a crypto achieves is not the most important factor. Rather, it is the price it sells for relative to what you initially paid for it. As such, the aim is to buy as low as possible while selling as high as possible relative to this figure.
A strategy that takes account of this might result in you building up your portfolio with smaller, lower priced coins that have strong pricing potential, rather than investing in bigger, more expensive projects.
Are the fundamentals good?
Another important data set to consider when scoping out crypto projects with potential, is the information gained from undertaking fundamental analysis.
The cryptocurrency world is, unfortunately, filled with many ‘pump and dump’ schemes that often lead to investors pumping money into lackluster projects. To avoid this, and to put yourself in the best position to identify the next big thing, you should never overlook fundamental analysis.
This involves trawling through the whitepaper, checking out the founders, scouring the website and doing some calculations to see if the project is financially sound and viable. Be careful also not to just focus on the Ethereum price, for example, and look to the fundamentals of the project itself.
Is it being talked about?
Another strong indication that a coin is set for big things, is how much it is being talked about.
There is a risk here, however, as previous crypto projects that came to prominence and then never made good on their potential were often talked about frequently in the crypto world. With that said, you need to find a balance between those projects that are gaining recognition from trusted individuals in the crypto world, and those that are simply being overhyped.
A good way to check this is to trawl the news websites and Twitter feeds for mentions of the project that you are interested in. You can also combine this information with information about any increases in daily active users, which will indicate that a project is growing healthily.
