Bitcoin (BTC) leads the crypto space and has influence over other digital tokens in the market. When its price drops, other cryptocurrencies immediately follow, and it’s safe to assume that the inverse is also true. When the price of Bitcoin rises, we can expect other digital tokens to increase in value too. BTC is the most familiar and talked about crypto in the market, yet there are many other cryptocurrencies out there, most of them released in the last couple of years. It’s, therefore, a good idea to look into others and find out which ones are doing well. You’re in the best position to know your own investing goals and make an informed decision about what coin is the best addition to your portfolio.
How To Identify the Next Big Crypto in The Market
Cryptocurrency continues to make headlines, and the race for digital asset supremacy shows no signs of slowing down. There are a few ways for investors to diversify beyond Bitcoin. The most significant crypto after BTC is Ethereum (ETH), which was developed to expand its capabilities. If you’re interested in buying crypto, you might be wondering which digital token will bring the best possible return. In a market with lots of coins, it’s more than challenging to pick the next crypto that will take off in the future. You should try, at least. Glance at these factors below.
Pay More Attention to Industry News
News sites supply vital information, helping you make the right move at favorable times. You have the latest news at your fingertips, yet you might miss what’s worth paying attention to. Consider trading volumes, current market prices, and market capitalization, to name a few. Moreover, you should explore on-chain data and metrics sideways concerning popular blockchains. It’s straightforward to sign up for a newsletter. Better yet, you can use a news aggregator to follow topics important to you, such as technology, blockchain, etc. Only relevant articles will be included in the newsletter.
See what everyone is talking about on social media if you’re wondering how to buy crypto. Twitter is a good source of news, discussions, and thoughts, so you’ll know at all times what’s going on in the crypto world. Find your favorite investors or news outlets and turn on notifications. Reddit is another powerful resource should you seek the best crypto projects or the latest trends in the market. There’s very little you can’t learn, as valuable, crypto-based content has been developed. Content creators are rewarded with Bitcoins and other digital tokens, so it’s in their best interest to post high-quality content.
Take Into Consideration Prospects for Adoption
It’s no secret that an increasing number of businesses, retailers, and merchants are accepting crypto as payment in exchange for their goods and services. Factors influencing the adoption of cryptocurrencies are social influence, transparency, price value, traceability, and attitude. It’s up to you to discover which coin has the edge over the other and which is more likely to be adopted. The push factors are closely linked with limitations or issues with conventional money (or the current financial system), which encourages people to adopt cryptocurrencies. New companies are announcing on a daily basis that they will accept BTC and other digital tokens, which will make crypto more mainstream.
Check The Maximum Supply
When doing your homework, you’ll no doubt come across various figures relating to the supply of a token. It’s recommended to invest in coins that have a high supply in the market. While most cryptocurrencies have a predetermined maximum supply, that’s not the case for Ethereum. There’s no upper limit for how many ETH can exist, even if millions of them can be minted each year based on the actual block discovery times and rewards. If a digital token’s supply is far off from its total supply, that means there’s a dilution risk. When more coins are added to the circulation, the coin’s value decreases, particularly if demand is weaker than the price.
To calculate the maximum supply, add the total amount of tokens that have been mined with those that haven’t been mined yet. Once the maximum supply is reached, generally through mining efforts, no new coins will be produced, which in turn creates scarcity, leading to deflation conditions. Acquiring crypto with a limited supply is a surefire way to make a profit from its future value. Nevertheless, there are additional factors to consider, such as the time when the coin will exhaust its supply. It must have a feasible halving cycle. You should invest in cryptocurrencies that have a better chance of preserving their value, and the final decision should be based on due diligence.
Don’t Ignore the Real-World Utility
It’s estimated that more than half of cryptocurrencies on the market have no real-world utility, which translates into the fact that they don’t create value beyond speculation. With countless new cryptocurrencies popping up, it’s become difficult to distinguish the valuable players. Utility should prevail over speculation. One example of a project worth mentioning is VeChain (VET), which solves real-world economic problems. It’s deployed by major corporations to monitor everything from wine production to vehicle manufacturing. The system is efficient, but attention must be paid to the fact that it’s not severed from third-party influence.
Bitcoin is the pioneer in the crypto industry, bringing about a radical shift in the way society is organized. Countless other coins followed, but BTC remains the best known. It’s hard to say what cryptocurrencies will be the next big crypto gainer. Think about the prospects for adoption, verify the maximum supply, and consider real-world applications, among other things. The number of transactions will give you a pretty good idea of how liquid the market is and how much interest it’s gaining among investors. Given that every person is really unique, a professional must be sought before making any financial decisions.
All in all, do your own research and seek professional advice prior to making an investment decision. Nothing is guaranteed when you invest, so loss is a reality you need to understand.