How times have changed for cryptocurrency – the digital coins hardly caused a stir with investors a decade ago but now feature regularly in financial conversations.
Coin prices have surged as investors seeking growth in a zero-interest global economy ploughed their cash into Bitcoin, Ethereum and the rest.
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Early cryptocurrency adopters have seen their faith in cryptocurrency rewarded many thousands of times over despite a wild, roller-coaster ride of peaks and troughs that could make a fortune in a day and strip that untold wealth away just as quickly.
But finding the next new thing in cryptocurrency is not that easy. Bitcoin reigns supreme over a kingdom of almost 20,000 digital currencies. So knowing where to look and evaluating the prospect is a definite advantage in working out if following a crypto coin is worth the bother.
The first task is to draft a hit-list of places to look for new cryptocurrencies.
Unearthing a new cryptocurrency is fraught with danger. Fraudsters, hackers and other scam artists take advantage of the unwary in the unregulated cryptocurrency environment.
Cryptocurrency is a powerful investment that can improve portfolio diversification and generate decent returns.
Where To Look For Crypto Info
If you are hunting for a new crypto opportunity, you must set up a monitoring system covering reliable news and data sources.
Which sources you pick depend on personal preference, but here are a few pointers:
- Exchanges – Crypto exchanges abound across the US, Europe and Asia. Most have a data feed for the coins they accept, a blog feed with educational articles and a news feed with the latest cryptocurrency news.
Many exchanges list new coins, but some ask users to sign up for enhanced, paid-for accounts to access the information.
- Data aggregators – Websites like CoinMarketCap and CryptoCompare give up-to-the-minute information about coin values, market capitalisation, trading volumes and performance.
- Social media – Twitter, Telegram, Discord and Reddit, are a few of the dozens of sites that have vibrant discussions about cryptocurrency.
- Early warnings – PooCoin Charts, Tokensniffer, TopICO and ICO Bench, offer information about new coins, likely scams and market trends.
- NFT platforms – Mint and buy non-fungible tokens from platforms like OpenSea, Rarible and SuperRare. The market went from zero to hero in 2021 as celebrated auction houses like Christie’s and Sotheby’s sold NFTs worth millions of dollars.
- DeFi platforms – DeFi, short for decentralised finance, are apps based on smart contracts that carry out transactions. Popular platforms include MakerDAO, PancakeSwap and Aave.
- ICOs – Initial coin offerings that launch new cryptocurrencies are listed by exchanges, data aggregators and platforms like TokenSniffer.
- Airdrops – Marketing stunts to raise awareness of a cryptocurrency by offering free coins and tokens
Another popular method for investing in cryptocurrencies is an exchange-traded fund. ETFs are indirect investments, which means investors hold shares in the fund, but the fund does not own any cryptocurrency.
Watch Out For Rug Pulls
Cryptocurrency generally comes as a method of payment and store of value, like Bitcoin, or utility tokens that allow access to a blockchain, like Ether.
Because crypto is an unregulated market with no central bank or government oversight, the risk of losing money to scammers is high. A con-trick to watch for is the ‘rug pull’, when a coin developer advertises a new project and collects money from investors only to disappear with the proceeds to leave the investors holding a worthless cryptocurrency.
DeFi projects in particular have suffered from rug pulls.
Investors can protect their stakes by backing established projects, checking code and verifying the developer’s identities.
The risk of scams comes with every cryptocurrency, but older coins, such as Bitcoin, have passed years of scrutiny, whereas newer projects have not. Some coins started off as a joke but became serious contenders, such as Dogecoin which is now in the top 10 for traders.
One tip is only to invest in cryptocurrencies listed on mainstream exchanges as they check out new coins and tokens before offering them to customers.
Scammers depend on the fear of missing out (FOMO), but c cryptocurrency investors must take their time to investigate new coin offerings.
Faking The Numbers
Liquidity is an important element of an investable cryptocurrency.
Liquidity means the market has enough trading volume for investors to sell their cryptocurrency quickly when needed. Crypto with a low or no trading volume has few investors interested in trading in large amounts.
This can lead to a problem with exchanges making money from transaction fees when users buy and sell their cryptocurrency holdings.
Some exchanges were caught faking their trading volumes. Substituting a higher for lower volume encourages trades. As the exchange takes a slice from each deal, it increases their incomes and makes them seem a larger business, and attracts more users who fall into the same trap as the cycle starts again.
Scammers massage the figures by opening multiple accounts in an exchange to trade between the accounts.
Some exchanges that record low visitor numbers to their websites report billions of dollars of trades daily that cannot possibly arise from a few website hits.
That’s why it’s always important to check out web traffic attracted by exchanges before investing.
Finding A New Cryptocurrency FAQ
How can I buy new cryptocurrencies?
It’s easy to buy cryptocurrency once you have a digital wallet to buy, store and sell them through. Most exchanges have branded wallets, or you can pick an off-the-shelf product designed for the job, like Mycelium or Trezor. The wallet should link to the coin or token you want to buy. Then, exchange your pounds, dollars or other currency and load your wallet. The last step is making a cryptocurrency purchase through the wallet.
How do I become a new crypto early bird?
First, accept unless you are lucky that you will never beat the media to the news because they have direct contact with the movers and shakers in the cryptocurrency industry. The fastest way to access the news is through an aggregator like CoinPanic, CoinMarketCap or CryptoCompare. Next comes a coin website like Bitcoin.org.
CoinMarketCap has a list of new cryptocurrencies updated daily – search for the term ‘regular presale’, click on the market button and scan the list for coins paired with ‘REGU’, like REGU/ABCcoin.
How does an ICO work?
An ICO – an initial coin offering – lets a developer raise funds for a new cryptocurrency. A developer issues a white paper describing the new crypto and requests investors to fund the project, much like crowdfunding a business opportunity. In return, the developer sends the investor some of the new cryptos.
For investors, the important point is that their stake does not buy any ownership of the company behind the crypto, just an amount of the new coin or token. The gamble is if the new crypto will dive and become worthless or grow in value so you can sell and make money.
Can I make money from an ICO?
Investors do make money from ICOs. However, the market is not regulated, and the risks of a scam are high. ICOs are the cryptocurrency equivalent of corporate start-ups, and many end in failure.
How do I set up a cryptocurrency wallet?
Download a digital currency wallet to a smartphone, tablet or computer, fund the wallet and connect to an exchange – from there, you can buy, store or sell cryptocurrency. Before downloading, check the wallet and exchange you select can hold the cryptocurrency you want to invest in.
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