It’s always exciting to hear stories about how someone spent a few thousand dollars in a cryptocurrency and made millions. Two New York brothers spent approximately $7,900 in Shiba Inu (SHIB), a coin established as a spinoff of Dogecoin (DOGE), and their initial investment grew to nearly $9 million.
What exactly are cryptocurrency gems?
Crypto gems are undervalued and obscure cryptocurrency coins and tokens that have the potential to offer significant returns. These new coins frequently have a very low price, frequently less than a cent per coin, and offer the chance of high profits.
Because these coins have a lower overall market capitalization (commonly referred to as a market cap), increasing their value by 100x needs far less market involvement and volume.
What to watch for when purchasing crypto gems.
There are numerous variables you can use to decide whether the risk/reward ratio of purchasing a particular coin is worthwhile.
A crypto gem does not need to have all of them, but the more the merrier, as this increases the likelihood of it being a crypto gem. The following are the most critical ones:
The coin’s creators (The Team)
The best place to begin investigating a coin is through the project itself. Visit the website and learn about the team who created it.
Investigate their previous endeavors, their ability to keep promises made, their presence on social media networks, and whether they consider community ideas. Additionally, consider the coin’s positioning within the crypto ecosystem, its potential use cases, and the project’s roadmap.
While you’re studying the team, you should also look into the project’s funders. Crypto venture capital firms frequently fund many projects, and you can research to determine their legitimacy and the performance of previous coins they have funded.
The coin’s value
In the world of cryptocurrency, it is critical to consider a coin’s entire market cap, which is computed by multiplying the number of coins in circulation by the coin’s price.
Number of Holders
It is feasible to keep track of how many different wallets have the coin and how much each wallet holds using blockchain explorers such as Etherscan for the Ethereum blockchain and BscScan for the Binance Smart Chain.
In an ideal world, particularly for new coins, the number of holders would increase as the coin gained popularity, and no single wallet should hold an excessive amount of the coin.
Next post, we will look at some red signals to watch out for when searching for crypto gems.