By now you are probably aware that cryptocurrencies are being traded like fiat currencies. As they gain legitimacy, more and more people are looking to invest in the next big crypto. But how can you work out what will be the next big one?
Look for Currencies Trading Below a Dollar
This is an important piece of advice for a number of reasons. One of them is the simple fact that, with prices so low, the cryptocurrency is easily accessible for traders with limited funds. If you are looking to break into the world of cryptocurrencies for the first time, you probably don’t want to dive right in with something as expensive and volatile as Bitcoin.
Another advantage to choosing a currency that is currently valued so low is that those small numbers can easily multiply by many amounts. This is what has drawn so many people to cryptocurrencies as investment tools, the potential to earn a return that is exponentially greater than the initial investment. If you are able to identify and invest in the right cryptocurrency, such great returns are your potential reward.
At any one time, you should be able to find a number of cryptocurrencies being traded a few decimals behind the zero. For example, at the time of writing, there is one currency trading at $0.038/coin, an increase of 522% in the last week! If you are able to identify a future smash hit cryptocurrency this early on in its development, even a small investment could be worth a great deal in the near future. Once it becomes too obvious that a new currency is going to break out in a big way, it triggers a cascade effect whereby lots of new investors try to pile in while there’s still time.
Keep an Eye on the Right Websites
There are plenty of websites out there now which are dedicated to the world of cryptocurrencies. As well as facilitating the trading of currencies, many of these sites also exist to provide up to the minute information, news, and advice for new and experienced traders alike. For an example, check out a list of best exchanges for cryptocurrency here. If you want to get serious about crypto investing and speculating, you will need to have a number of good sources lined up to refer to.
It is important that you look for variety in your sources. Remember, there may be websites or individual analysts whose conclusions you disagree with, but who provide stellar information. In such cases, it is important to recognize the value of alternate views and other ways of thinking. You can’t expect to get things right all the time, and sometimes those people you usually disagree with will present arguments you would otherwise not have considered.
Of all the social media sites out there, Reddit is the most useful for cryptocurrency traders. If you need a crash course in how Reddit works – Reddit is organized into communities, known as subreddits. There are subreddits dedicated to every subject you could think of, from photos of bread stapled to trees, to gardening, to investment tips. Reddit has it all!
As well as encouraging users to share things they find from around the internet with the relevant Reddit community, the platform also puts the average person, or enthusiast, in contact with experts in their field. You will find plenty of people who trade stocks for a living dispensing their advice on Reddit. You would be crazy not to use this resource!
In particular, the cryptocurrency sub-reddits are worth monitoring for new tips and info. When a new currency starts to emerge and show promise, Reddit is one of the first places you will hear about it.
Check the Current Circulation Against Maximum Circulation
When you are looking for new cryptocurrencies to invest in, you want to prioritize those that have a high current circulation when compared to their maximum supply. The reasoning here should be pretty obvious, cryptocurrencies are most likely to rise in price when there is also rising demand. If there is little supply of new coins left, there’s a good chance the value will continue to increase.
Check Volume and Price Charts
Poring through data isn’t exactly fun (well, it is for some of us), but it can make your foray into the world of cryptocurrencies a hell of a lot smoother. You want to look out for those cryptocurrencies which are showing the highest growth rates. This metric, when considered along with the others on this list, will give you a strong indication of whether you can expect a cryptocurrency to perform well in the near future.
If you manage to find a golden goose amongst the ever-growing list of cryptocurrencies, it could change your life. Remember to be diligent at all times, and never invest what you can’t afford to lose.