With all the different altcoins available on the market and the new ones being introduced every day,
finding winners can seem daunting at first. While cryptocurrency investing is not an exact science,
there are some ways that you can identify cryptos with good potential and the ones you should
avoid like the plague. But what differentiates a good cryptocurrency from a bad one?
Try to Look for Red Hot ICOs
Too many new investors spend their energy on finding great new coins when ICOs often have the
most potential for growth. ICOs, or initial coin offerings, work basically the same way as initial stock
offerings and allow new investors to get new coins at a discount during the pre-sale period and
when coins are just made public.
You could use a site like ICOalert to check out a list of upcoming ICOs and get data on them as well.
They will usually give you some crucial information on the ICO including the team’s profile, the coin’s
soft cap, and buy-in price. This will give you the opportunity to do your research and plan your entry.
Look for Great Potential for Use and Growth
When choosing a cryptocurrency, you have to gauge how scalable and useful they are first.
Hundreds of new altcoins have hit the scene lately, and a surprising number have been able to turn a
profit. As a matter of fact, in a recent white paper that was published by Iconomi which followed the
price movement of 100 altcoins in the first quarter of 2016, they found that the average yield for
these coins was a whopping 357% and that only thirteen out of these coins had negative returns.
But not all of these coins will actually have a use or be around years from now. So, if you’re going to
invest for the long term, you really have to look into each cryptocurrency in detail before you invest.
Does the coin have an actual use or solve an actual problem? On which technology will it be running
and how scalable will it be? How many competing coins are competing in the same space and are
they actually better? Will this service even be needed years from now? These are all questions those
who are in it for the long haul need to answer before they make their pick.
Invest Based on a Platform, Not on Features
One of the easiest ways to pick the right cryptocurrency is to bank on platforms instead of coin or
token features. Few people truly understand that hundreds of coins are released on the same
platforms and that creating a new coin is extremely easy. So instead of investing on a coin, why not
invest on the platform instead?
While new coins might lose some of their value or have none at all in the future, the platforms that
make them possible won’t, and the coins that power them will always have some intrinsic value to
them. This is why cryptos like Ether are less likely to become obsolete. So, before you pick a coin, try
to pick those who are banking on a specific platform first and try to gauge its potential for growth. If
you’re looking for great platform-based altcoins, cryptohead.io is a great place to start.
As you can see, finding winners is all about knowing what to look for and having the right set of data
at your disposal. Whatever you do, make sure that you understand any crypto you invest in before
you make a move and never make a decision based on hype alone.