5 Tips For Finding The Next Bitcoin, Ethereum And Ripple!
Bitcoin, Ethereum, Ripple and a few other high visible cryptocurrencies have made early investors very rich, very quickly. They could make many more investors rich if they continue to rise at the recent feverish pace.
But that’s unlikely, as these investments cannot defy the numbers game. This means that would-be rich investors must look for the next lucky coin elsewhere on the cryptocurrency list, while the hype for the digital currencies lasts.
Still, picking up the next winners in the cryptocurrency space is a very difficult thing for a couple of reasons. One of them is that there are more than 1,000 cryptocurrencies to choose from. Another reason is that there are no fundamental metrics to appraise the intrinsic value of each coin, as is the case with conventional assets. The only thing available is a site with a promise the coin holds to change the capitalist world, should it be adopted to replace national currencies in day-to-day transactions.
Bitcoin has some of the attributes of a headless currency. Nevertheless, it has no intrinsic value ‒ not even as a collector's item because it is intangible. Nor is it a financial asset like a stock or bond because it has no returns. Its only investment value lies in the possibility of appreciation bestowed on it by those who hold it: it is an asset with no underlying.
Behavioral finance and technical analysis can provide a few tips to sift through the cryptocurrency maze for lucky coins.
Here are the 5 tips that should help you find the next big cryptocurrency:
Look for cryptocurrencies trading at less than a dollar. That’s important for a couple of reasons. One of them is that a price below a dollar creates the illusion that the cryptocurrency is “cheap,” especially for investors with little funds to invest. Another is that smaller numbers can more easily double and triple than larger numbers can, adding to the hype that could eventually create a cascade. That’s consistent with the astronomical gains we have seen in cryptocurrencies trading a couple of decimals behind zero.
Check cryptocurrency websites to assess which coins are most promising. In terms of their potential to be adopted as a currency, that is. In fact, this method can be used to estimate the “intrinsic” value of each coin, once it reaches a certain level of adoption, by using the quantity theory of money.
Check Reddit to find out which coins have a community following. Reddit communities consist of “innovators” and “early adopters.” Though small, these groups help spread the buzz to a larger group the “early majority,” stimulating demand for the coin. And that means higher prices when coupled together with a fixed supply.
Look for cryptocurrencies with a high circulated supply versus the maximum supply. For an obvious reason: these cryptocurrencies are more likely to rise in price with rising demand, as there’s little supply left to match it.
Check cryptocurrency volume and price charts. You want to consider cryptocurrencies with a chart of accelerating price and volume growth, as this kind of chart is a confirmation of momentum for these currencies.
Thanks, these are quite helpful.