How To Find the Next Good Coin Before It Moons

If you are anything like me, a believer of the blockchain technology and the power of decentralization. You must be tired of not knowing which coins have true potential, and actually utilizes the blockchain to solve real problems.

What this article would NOT do, is to tell you what you should invest in. However, it should hopefully give you some idea or inspiration on how you can start your own research on what coin to invest in next.

Being a tech and crypto enthusiast myself, I have been determined to only invest in things that I believe in from day 1. After countless hours spent looking for true gems in the sea of shit coins, I eventually developed a system that I use while learning about a project, to decide whether it’s worth my time.

I will share with you the questions that I ask, and the things that I look for while researching a project, as well as why I ask or look for them.

Fundamentals:

Does the project have a nice and professional looking website/landing page?

Why: Call me shallow, but I think if the team can’t even bother to develop a nice looking and user friendly website, it really doesn’t give me much confidence for the project. It is trivial amount of work compared to the actual blockchain project itself.

After briefly going over the website, does it at least give me a clear high level idea of what the project is trying to do? or what problems it’s trying to solve?

Why: There are so many projects (cough TRON cough) that are just filled with buzzwords, and after reading about them you feel like you know everything and nothing at the same time. Even worse, some teams make their projects intentionally difficult to understand, in order to seem mysterious and impressive. To me it could imply that the project itself actually doesn’t have much to offer, and the team is just trying to create hype so more people would FOMO in

Does the project give you an idea of why it needs to be decentralized or on the blockchain, as well as why it needs a coin/token? Does or will the token/coin actually have any value?

Why: Many people (including myself) tend to overlook this, but there are some projects (with really high valuation) that literally don’t even benefit from being on the blockchain. Sometimes the answer might not be clear straight away (since there are many industries that we are unfamiliar with), but I think it’s important to ask this question as part of the fundamental analysis since it could determine whether this project would have real value in the long term.

Sometimes everything about a project is amazing: great idea, amazing team, wonderful vision, tackling industry that desperately needs decentralization. However, the actual tokens/coins of the project might not necessarily have any real value! That's right, sometimes it's hard to tell without a little bit of digging, but many projects only have a token to raise capital by ICO (either for personal gain or development)! In this case, we have to be extremely cautious, because if the token doesn't have real value, it's much more difficult to have market appreciation (rise in price) no matter how good the project itself is.

Does the project have a good team? Do the developers/advisors have experience in the cryptocurrency/blockchain space?

Why: I think most people probably don’t realize this, but these crypto projects that are claiming to solve all sorts of problems (e.g. helping unbanked people) are extremely difficult to develop. It takes much more than just money and a white paper, since the blockchain technology itself is so new and the teams would have to overcome countless technical issues and problems. Thus I think only a really great team with great leaders, can really see the project through its development

As to the projects that don’t even show their team members’ real names. Personally I think you shouldn’t waste your time. I would never feel safe investing my money into a project where the CEO of which has a picture of some anime character and has a name that is a reddit username. For the team members to at least put their real names down for a project, it tells me that at least they are confident about the project and they are willing to accept the responsibility and accountability.

Does the project have a good plan/vision and whitepaper? Is there any roadmap in place or in the works?

Why: A good whitepaper tells me that the team has gone through the necessary research to propose solutions (at least on paper) to the problems that they are trying to solve.

A bad whitepaper, in my opinion, is one that 1) has Arial font (seriously ) 2) is unnecessarily long and filled with unrelated contents, data, as well as empty promises and imaginary financial outlooks. A bad whitepaper tells me that it’s more than likely that the team doesn’t really have a plan in place yet they put one out there so more people would believe them (since no one reads them anyway amirite).

Conclusion:

At this point if a project satisfies all of above, it would be deemed “one of the good ones” and added to list of coins to look out for. However, whether I would actually invest in it still depends on the following financial/profitability criteria.

Financial/Profitability:

Is it currently overvalued or at all time high?

Why: As we all know, the hype in crypto right now is unreal, and frankly, unhealthy. As a result, the good projects that have been discovered by people are probably already at a very high valuation, even though they are still at very very early stage of the development (cough Cardano cough).

So you can probably tell that thing keeping the valuations at such high level is just HYPE. This is very dangerous, because if you chase the hype and buy in at this kind of levels, when the hype blows over or the market starts crashing/correcting (weak hands pulling out) you will be left holding the bags or have to sell at a loss (ouch).

Does it still have much room to grow?

Why: Though obvious, a LOT of people probably still don’t know what determines the potential of growth for a cryptocurrency. What determines the price is the circulating supply and the market cap (circulating supply * price per coin = market cap, or price per coin = market cap/circulating supply). In other words, the price per coin (face value) DOEAN’T MEAN SHIT!

For example, Ripple was priced at about $3 per coin with a market cap of 120 billion dollars, and some people would say “Yo bro it’s still so cheap! It can moon and hit $1000 easily!” WRONG! As you can tell with the above formula, for a coin’s price to rise 10 times (+1000%), it would need the market cap to also rise 10 times. For ripple, it would need a market cap of 1.2 TRILLION dollars, and yeah I don’t think that’s happening anytime soon (aka ever).

Also you have to remember this: the larger the market cap, the harder it is to grow. It is much easier for a 50 million dollar market cap to grow 10x to 500 million ($450 million difference), than a 5 billion market cap to grow 10x to 50 billion ($45 BILLION difference).

Please leave a like if you enjoyed this article or think this helped you in your journey of crypto investment.

If there is any coin that you would like me to cover please leave them in the comments, I would love to share my research on crypto projects (using the guideline I shared above) and hear what you guys think!