If you were one of the people who bought Bitcoin in the first half of 2017, you’re probably enjoying the reward from your investment. There have been no other investment in the world that have performed the way that Bitcoin did in the past few years. Those who were able to forecast the success of Bitcoin are now multimillionaires.
With the rush and hype around cryptocurrencies, more traders are searching for their Bitcoin moment. The cryptocurrency market offers an opportunity for people to make thousands of percent worth of return within just a few years, or even a few months. Hence, we are going to give you some pointers on how you can spot the next Bitcoin.
Where should you start?
Finding the next Bitcoin isn’t going to be easy. It will take some time because you have to study the market intensively. The level of complication when researching will also increase because new alternative cryptocurrencies are coming in the market every day. Not all of these coins will be successful and it is up to you to determine which one that you want to invest in.
With cryptocurrencies, there are still several apparent risks, which includes regulation. In 2018, investors and cryptocurrency enthusiasts can expect regulations to be a hot topic. Whichever country that you may be based in, make sure to take a look at the regulation or else it will be worth nothing once the government outlaws it.
The following are our top tips on how you can find the next Bitcoin in 2018.
When searching for the next the cryptocurrency, take a look at new cryptocurrencies that are priced below a dollar. If you are an investor with a limited budget but you are interested in cryptocurrencies, this is a great tactic that can consider. To add diversification to your portfolio and reduce the risk of losing all your money at once, you can spread your risk by investing in several cryptocurrencies. You will have plenty of choice in the market as they are over 2000 alternative coins.
As you are purchasing these cryptocurrencies at a very low price, there is a possibility that this value can increase over time. The potential with cryptocurrencies is very apparent. However, keep in mind that their value is mostly based on speculation.
- Mainstream adaptation
When searching for the next big cryptocurrency, you need to consider which ones are most likely to be adopted as the currency. Essentially, you need to do in-depth research to understand the specialties of the cryptocurrencies over others. Many cryptocurrencies today imitate Bitcoin’s blockchain and spend a lot of marketing it as the next big thing. Hence, search for a unique feature of the cryptocurrency.
It’s essential that you investigate the real case users of these cryptocurrencies. For instance, Ethereum has a high potential of having an increase in valuation because it has an active platform and its blockchain is highly popular.
- Popularity and community
Another important factor that contributes to a successful cryptocurrency is the amount of popularity surrounding the cryptocurrency. After all, for a cryptocurrency to be successful, it must be backed by a large number of cryptocurrency investors. To begin your research on the popularity of upcoming cryptocurrencies, you can visit cryptocurrency blogs or forums which are popular in the community. At times, these communities will release information about coins that come before it is released by a larger news outlet.
By following these social media pages, it enables you to stay ahead of other traders as you constantly monitor the development of cryptocurrency news. Keep in mind that it should only function as a guide to point out which cryptocurrencies are worth investing in. Ultimately, do your research before putting your money into a cryptocurrency.
- High supply of coins in circulation
Once you have found a cryptocurrency you’re interested in, identify the maximum amount of tokens that it circulates. Keep in mind that the maximum amount of tokens that a cryptocurrency has does not mean that it is in circulation.
Like Bitcoin, these cryptocurrencies have to be mined before it is available for circulation. There are some exceptions to this which are the privacy cryptocurrencies which are not pre-mined before an ICO. For other types of cryptocurrencies, you should choose a cryptocurrency which has a highly circulated supply because the price is more likely to go up if the demand increases as the limited supply signals scarcity.
- Price and volume charts
Take a look at the price and volume charts. You must have fundamentals in reading charts to understand the movement of these cryptocurrencies. When you know how to read charts, you will be more well-versed in reading abnormal patterns in the volume charts. Also, you get a rough idea of the general momentum of the cryptocurrency.
Important things to remember
There are plenty of things to keep in mind when investing in cryptocurrencies. Firstly, remember that it is a high-risk investment. Secondly, always do your research. Thirdly, try to diversify where possible. That said, predicting the next Bitcoin in the cryptocurrency market is a challenging task. It is anything but easy. It seems like everyone has an opinion on what is going to be the next Bitcoin. However, you need to develop your analysis and be confident with your decisions. After all, not everyone believes that Bitcoin was going to be the next big thing even at the start of 2017.