If you’ve ever considered how to find the next big crypto trend, there’s a good chance you may have looked to historical events to try and determine a recurring theme or trend. However, there are methods for picking hidden gems that don’t rely solely on the next NFT platform, meme coin, crypto game, DeFi protocol, or metaverse token.
In this article, we explore the best ways of learning how to find the next big crypto project. We’ll discuss some of the essential areas of research you should consider before investing in digital assets. Plus, we look at what gives a crypto project value and potential. Additionally, we’ll look at some of the best tools to help you formulate effective trading strategies.
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How to Find New Crypto Projects?
The widespread adoption of blockchain and Web3 has prompted a global shift in attitudes towards crypto. Not long ago, the portrayal of Bitcoin and crypto by mainstream media outlets was negative. It suggested that crypto was a hoax, a scam, destined to fail, and only suitable for illegal activity. Fast forward a few years, and the feeling is quite different. From the introduction of Bitcoin as legal tender in El Salvador to the advancements in regulatory policy, global attitudes are considerably warmer towards crypto than ever before.
Technological advancements and real-world use cases are propelling crypto projects into the public eye like never before. However, high-utility technologies are not the sole driver of successful crypto projects. To learn how to find the next big crypto project, it’s essential to understand what makes a project successful. For now, we’ll forget about intraday price movements and social media explosions. More often than not, a successful crypto project will share several things in common. Below, we look at some of the most important considerations when figuring out how to find the next big crypto project.
Before investing in a coin or token, most successful investors take the time to research the technology underpinning the asset. Many investors like to understand the vision and track record of the team behind a project. Also, it is often wise to look at the use cases for that specific technology.
A ground-breaking innovation or advancement of an existing high-utility project could suggest that an asset bodes well in the current climate. Additionally, the token distribution model and maximum supply are topics that investors will benefit from observing.
Another factor to consider is the scarcity of a crypto asset. The circulating and maximum supply of a crypto asset give investors an indication of how the asset could perform in the future. For example, there is only around 20% of the total Bitcoin supply left to mine. Conversely, some coins and tokens have an unlimited supply. As such, it is often wise to consider the supply of any crypto asset before investing in it.
For better or worse, the success of a crypto asset relies heavily on the hype around the project created by the marketing team and the broader community. A token can have all the utility in the world, but if nobody is excited to buy it, it likely won’t reach the moon. Likewise, a token with little to no utility can pump like crazy, given the right amount of hype in the community.
Another consideration for upside potential is the historical price of an asset compared with its current price. For example, if an altcoin has made significant gains in previous bull cycles and is currently down 80-90%, there could be a chance that other investors see the high upside potential. History rarely repeats, but it often rhymes. As such, a crypto asset with no inherent floors or reasons for investors to lose confidence in it could perform well in the short term if it is significantly underbought. Furthermore, the success of a crypto asset can depend on current trends and narratives.
Trends and Narratives
A good indication of a project’s potential for success is how well it fits into current narratives. For example, crypto gaming, non-fungible tokens (NFTs), layer-2 scaling solutions, and decentralized finance (DeFi) have all been strong narratives in recent years. During the peak of these trends, several projects emerge that simply imitate the top-performing project. Although these spin-offs can perform well in the short term, few manage to sustain any kind of momentum without an element of innovation or originality.
Despite this, it’s always worth looking at trends and narratives to see what is popular. Don’t forget, crypto prices are driven by supply and demand. As such, strong trends can drive serious short-term price action. Some investors think it’s worth hedging a bet with strong trends even if they don’t believe it has long-term potential. Regardless of personal biases, many believe that “the trend is your friend, until the end!”.
The crypto market is heavily correlated with traditional markets like stocks and commodities. Accordingly, any major global event or phenomenon can rock the crypto world. Furthermore, macroeconomic effects are often amplified in the crypto realm. For example, a market crash of 20% in the stock market could seem like a significant correction for traditional investors. However, the crypto markets are likely to drop by much more after the same news.
The volatility in crypto is a double-edged sword, making many winners and even more losers. However, understanding what events can trigger a crash or a bullish reversal could help you find the ideal opportunities for your next investments. Consider studying how different events play out in various markets. Markets like certainty. Accordingly, any major announcement that affects a lot of people could help to change market sentiment in either direction.
Furthermore, a significant market correction is often a time when speculators look to capitalize on diminishing market confidence. A chain reaction of sell-offs can trigger market-wide panic. However, the discerning investor often uses this as an opportunity for buying high-utility assets at a reduced price. Conversely, when the entire world order hinges on a single announcement from a global leader, it is difficult for any investor to be confident in the face of widespread uncertainty. As such, keeping an eye on global news and events could help you make well-informed investment decisions.
Any project that advances the blockchain industry and solves real-world problems is something to consider when investing in crypto. Significant announcements can trigger market-wide excitement when delivered in a timely fashion. Accordingly, many projects issue announcements of announcements to keep the ball rolling and engage within the community.
Technical updates, feature rollouts, and protocol upgrades can suggest that a project is working hard to meet the shifting demands of the industry. As such, a strong roadmap with achievable milestones is a common attribute for a successful crypto project.
Conduct Your Own Research
Since you’re reading this article, it’s safe for us to assume you already carry out your own research. Finding reputable media outlets is one of the best ways to figure out how to find the next big crypto project. Anyone on Twitter or YouTube can tell you what their favorite coin is for that particular week. However, sourcing high-quality content from a variety of verifiable sources will put you at an advantage over your peers.
There’s no doubt that social media has driven insane price action for low-utility meme coins. Regardless, following the trend and chasing the pump is often not a sustainable investment strategy. At some point, you might want to take the time to learn what makes markets move so that you have the edge over the competition.
Multiple websites provide high-quality data and analytics covering various areas of adoption throughout the industry. For example, Lunar Crush is a website that collates social media trends for digital assets. Using multiple sources of information, Lunar Crush gives each project an overall score according to how popular a project is on social media. Other essential tools include DeFi Pulse, an aggregator that ranks decentralized finance (DeFi) protocols according to the total value locked (TVL) in any given protocol.
For those who view crypto as nothing more than an investment vehicle for turning a quick profit, technical analysis is a crucial tool for learning how to read market movements. Technical analysis is a methodology for forecasting future price movements using historical data. By combining trading patterns with technical indicators, traders can remove emotions from their trades. Instead, they use probability to determine the likelihood of success in their trades.
Popular indicators include trading volumes, simple moving averages (SMAs), exponential moving averages (EMAs), Bollinger bands, and stochastics. Also, many crypto investors combine technical analysis with fundamental analysis (FA) and on-chain analysis to gain a broader perspective of the markets. Whereas FA considers broader macroeconomic implications, on-chain analysis looks at activity on the blockchain. This includes several factors, such as the average holding time of an asset and the number of active wallet addresses.
If you want to improve your crypto investment strategy, the best place to start is by investing in yourself and your education. There has never been a better time to learn a new skill in an emerging tech field. Also, understanding how blockchain and Web3 operate on a technical level enables you to see the real value of novel technologies.
How to Find the Next Big Thing in Crypto - Summary
At Moralis Academy, we can’t offer financial advice. However, we can provide tips to help you learn how to find the next big crypto project. If you find a project with a strong team, solid fundamentals, high utility, and an excited community, you’re already ticking most of the boxes. Understanding current narratives and recurring themes could put you in good stead for finding that next gem in the altcoin forest. Hopefully, next time someone asks you how to find the next big crypto project, you should be able to answer confidently.
Also, you should now have the correct tools to further your understanding of the crypto industry. Many investors agree that the best way to learn how to find the next big crypto project is to keep learning and challenging your understanding of blockchain. At Moralis Academy, we make it our mission to help people just like you to understand the complexities of blockchain and Web3.
To truly understand what the future of finance could look like, it’s essential to look at where we’ve been. Check out the Bitcoin Monetary Revolution course at Moralis Academy. Here, we dive deep into the history of money and currency. Plus, we teach students about gold, bartering, and how the current monetary system operates. Take your blockchain education to the next level and become blockchain certified with Moralis Academy. Also, don’t forget to follow us on Twitter @MoralisAcademy! We’d love to hear your thoughts about how to find the next big crypto projects! Also, be sure to check out our “Ukraine & Cryptocurrency” and “Top Gaming Tokens” articles to further expand your Web3 and blockchain knowledge!