The best way to identify, invests in, and cash out the next big cryptocurrency
The best way to identify, invests in, and cash out the next big cryptocurrency
Bitcoin investors, who were fortunate enough to purchase the cryptocurrency before it rose to prominence as a major cryptocurrency, are now reaping the rewards of their risky investment. In addition, as the cryptocurrency industry continues to grow at such a rapid pace, investors are looking for the next big coin to invest in.
Cryptocurrencies are here to stay and are quickly evolving into something more than just virtual assets. The legalization of Bitcoin has taken place in countries such as El Salvador and Ukraine, with the former accepting it as legal tender.
While the space environment is still evolving and experts are still trying to gain a better understanding of it, the presence and vocality of major players such as Elon Musk is fueling public interest in the space environment in general. Even local players, such as Don Jazzy, who occasionally displays his cryptocurrency chart, have influenced people to follow the trend.
Bitcoin is the most widely used cryptocurrency, and it has complete control over the entire cryptomarket. According to Statista, there are nearly 6,000 coins available on the cryptocurrency market, so you must be selective when deciding which one to invest in and which one not to.
According to Oobit, the top five fastest-growing coins are Cardano, Ethereum, DOT, LINK, and Bitcoin, with three of them ranking among the most frequently purchased cryptocurrencies.
With this in mind, the following are some things to keep an eye out for before making a cryptocurrency investment.
The value of the coin
The majority of newcomers to cryptocurrency are people who have disposable income that they wish to invest in cryptocurrencies. Because they are still uncertain, it is likely that they will not bring a large sum of money with them. The most cost-effective way to get started is to purchase inexpensive coins.
As of August 2021, the total value of the cryptocurrency market is approximately $2 trillion. Bitcoin accounts for approximately half of the market capitalization. Dogecoin, for example, can be purchased for as little as N100 ($0.24) and Bitcoin can be purchased for an average of $30,000/N12.3 million.
You can purchase a variety of low-priced coins and hold onto them in the hope that their value will increase over time. It was impossible for those who are Bitcoin millionaires today to have predicted that their initially risky investment would turn out to be so profitable.
The public's interest
The volume of trading on a particular coin indicates the level of interest among investors in that coin. If there is a coin with a high volume of trades, that is the one you should be looking for.
Due to the uncertainty surrounding cryptocurrency, this is regarded as a long shot. Due to emotional reactions to market changes, public interest may increase or decrease depending on which direction the markets are swinging in one direction or another.
The disadvantage of piqued public interest is that it can be easily manipulated. Recently, the price of Litecoin increased as a result of an announcement that Walmart would accept the cryptocurrency as payment in the future. The announcement turned out to be a hoax, and the price of the stock dropped once more. A “pump and dump scheme” is what is referred to as this. In layman's terms, this is referred to as market manipulation.
All of this goes to show that public interest or hype does not always translate into viability of a cryptocurrency project. To determine whether the public interest rate is normal or an inflation pump, you must first observe price and trading activity for a period of time.
Available supply
Coins are created through the use of technological methods. As a result, coins are mined into the system rather than being extracted. It is estimated that approximately 18 million bitcoins have been mined so far, out of a total of 21 million bitcoins that can be mined. There are only 3 million bitcoins left to be mined as a result of this. According to economic principles, utility and scarcity are the factors that determine value.
Even though it will be a long time before Bitcoin's bull run comes to an end, what will happen when the supply is depleted? When choosing a cryptocurrency to invest in, look for one with a limited supply, as this corresponds to a fundamental law of economics: the lower the supply, the greater the demand.
Cardano, Stellar, LINK, and other cryptocurrencies are examples of coins with a limited supply. It is important to note that having an infinite supply of a coin does not imply that the coin has no value, as demonstrated by Ethereum, the second-largest cryptocurrency by market capitalization. What it comes down to is that certain economic principles remain true regardless of how much disruption technology causes.
Identify a coin that can be used as a currency.
Significant developments have occurred in the cryptocurrency space, primarily the entry of traditional financial institutions into the market. A number of well-known traditional financial institutions have begun to offer crypto-related services to their clients in the form of investment funds to complement their existing offerings.
Jamie Dimon, the CEO of JP Morgan and an outspoken critic of cryptocurrencies, has nonetheless permitted the bank to include cryptocurrency investments as part of its investment offerings, despite his opposition. Because the bank recognizes that its customers are interested in digital assets, it has introduced six new cryptocurrency investment products.
Bitcoin was selected as the official legal tender in El Salvador because it is a long-standing cryptocurrency that has demonstrated its longevity as well as its ability to thrive in the traditional banking system. Because it is the most valuable coin, it has a significant influence on the market.
This was not accomplished overnight. Other coins must demonstrate that they, too, are capable of withstanding the test of time. Bitcoin, Bitcoin Cash, Ethereum, and Litecoin are among the cryptocurrencies that have been approved by PayPal. The decision of the firm to trade these coins indicates that they may be eligible for eventual adoption as a form of payment or legal tender..
Binance, Coinbase Exchange, FTX, Luno, and other leading cryptocurrency exchanges are among the best platforms on which to conduct your cryptocurrency transactions. Yellow Card, Bundle, and Dan Holdings are all good places to start when looking for opportunities in Africa.
No matter what anyone says, always remember that there is always a risk associated with investing in any type of venture. Consequently, it is critical to be reasonable and to develop other financial strategies.
