It is always thrilling to discover tales about how someone invested a few thousand dollars into an underrated cryptocurrency (Crypto gems). And which after that turned into millions of dollars. Just like that, two brothers from New York invested roughly $7,900 into Shiba Inu (SHIB), a coin created as a counter for Dogecoin (DOGE). And their initial investment inflated to nearly $9 million. Unreal right?
Dogecoin itself was already created as a joke and have become widely successful with the assistant of Elon Musk’s tweets. So many millionaires have been made overnight from these so-called meme coins and altcoins. But as you know, by the time you move your eyes on them, it’s too late.
And after that, when the profits have happened, if you jump in only due to fear of missing out (FOMO), there is a high possibility that you may end up in a considerable loss.
The gist is to find these Crypto Gems before crypto enthusiast does. And there are several strategies on how one can find these gems. This article will talk about the most effective strategies to find the next 10x, 100x or even up to 1000x crypto gems.
What are Crypto gems?
Crypto Gems are those cryptocurrencies and tokens which are undervalued and out of the public eye. However, they carry the potential of delivering massive profits. These new gems usually have a low price to start with (under a cent). With the possibility of providing significant returns. However, it requires a lot less volume and market anticipation to boost the value of these gem coins.
As far as Bitcoin or Ethereum are concerned, it would require hundreds of billions if not trillions of dollars to do a 100x.
Therefore, it becomes more important to be able to spot the scams out of those many coins. Even with the investment of legit coins, there is a great deal of risk involved.
Spotting Crypto Gems and Blockchain Projects
- Coin Market Cap – Recently Added coins/tokens
The most vital resource which you would keep in mind is the Coin market cap. There are many tools available such as CoinMarketCap, which will provide you all the information such as: cryptocurrency price, charts, volume and many others. You can easily find what are the top coins with their respective market cap and which coins are freshly added in the crypto space. Comparing and considering the market cap helps understand the coin more better.
- The Team behind the coin/Backers of the project
Researching about the coin’s beckground and the team behind it is always important. VIsit the coin’s official website and find out who are the backers, investors and the working team behind it. Also look for the other projects the team is involved with, just to get an idea of the legitimacy of the project and the core team involved. The number of investors an the quality should be good so that we can get the idea that this project has some serious backing.
- Analyzing the Smart Contract
Almost 90% of these coins are made as tokens on the blockchain like Ethereum or Binance Smart Chain. They are created through Smart Contracts, Which cannot be altered or controlled. And they set all the parameters and functions of the coin. It is important to understand on what technology the coin is made.
For instance, if the owner of that particular smart contract can mint new tokens, How the distribution is baing made and how many tokens does he hold. It always helps to check if there are any exploits fue to bugs in the code.
- Number of Holders
Using the kinds of advance blockchains mentioned above, it is made possible to keep the record of the number of holders and wallets; and the amount each holds. It is specially in the case for new coins, the number of holders would gradually inrease as it gets more popular. And no single holder should hold more than the considerable amount of the coin.
- Reddit, Twitter and Discord Groups
As we all know news travels faster on social media than in the newspapers. Platforms like Reddit, Twitter and Discord groups can provide vital insights about the cryptocurrency communities. There people can discuss upcoming altcoins, ICO’s and even blockchain pojects. And the majority of crypto projects have groups on discord and telegram where they provide the first hand information about the project in order to attract people. Keeping an eye on these platforms one can surely understand and observe the roadmap and the potential the coin holds.
Note: Being listed on several exchanges doesn’t mean the project is legit so completely analyze the crypto before you get in.
Red Flags to look out for in a Crypto Gem/project
Now that we’ve talked about what to look for in the undervalued coins. Let’s talk about the red flags you should avoid.
High Promises. If the team says, the coin will jump up to 50x or even 100x in a week, never blindly trust random guarantees and predictions. They often pump the price of the coin just to attract investment and increase popularity. So that they can unload their bags into these new users.
Possible Exploits/Bugs in the code. As cleared earlier as well, it is quite hard to read and identify smart contracts. And to know whether there are bugs and if exploits are possible. So people usually just rely on the notion that someone other than them has already done the due diligence and inspection. Some projects to increase the legitimacy of their coin hire popular firms to do the research work. They perform smart audits and then publish the results. These results are published publically to provide a higher sense of reassurance. That the smart contract cannot be exploited and is safe.
Inactive team and Community. In a few words, the team that actively understands their customers’ market strategy is better than the team only focusing on their project. And doesn’t bother having a social face so that the public can know what is going on.
Bad Tokenomics. Tokenomics is a crypto term usually used to describe the study of cryptocurrencies. It includes questions like how the coin distribution is made, the use case of the token. The number of coins to be circulated and their total supply in the market. Coins or projects with bad or unpleasant tokenomics are less appreciated and usually have founders holding quite a considerable amount of the coins to dump and attain their profits.
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