The earliest cryptocurrencies have performed well in recent years, leaving many investors who bought and held them early to be very wealthy. This has inspired more people to invest in new crypto projects, hoping to be lucky enough to invest in a project that will become the next big thing. In addition, many investors are also looking for new projects to invest in for diversification purposes.
Whichever category you fall into, here’s how to find new cryptocurrencies to invest in.
4 ways to find new cryptocurrencies to invest in
Now let’s take a look at some of the ways you can use to find new crypto investment projects.
1. View crypto exchanges
Where else should you look for new cryptos to invest in, if not the platform you want to invest on? Exchanges have sections where they list new cryptos available for investment. You must visit and check the exchanges. Examples of these exchanges are Binance, Coinbase, Crypto.com, etc.
2. Social Media Channels
Developers use social media channels to raise awareness about their currency or communicate changes. For example, there are many Telegram channels, Twitter pages, and Discord groups for spreading information about current and upcoming projects.
You can also get information about trending cryptos to invest in through these channels. Some are not necessarily new; they may just be experiencing a bullish move right now or have strong potential to do well in the future.
You should also follow the social media pages of exchanges; they usually update their followers about upcoming projects and new releases. Exchanges usually post the links to their official channels on their websites. If you don’t find any helpful links, chat with support for help.
3. Beware of Initial Coin Offerings (ICOs)
An Initial Coin Offering works like an Initial Public Offering. It is a way to raise money for cryptocurrency related projects and services. ICOs also provide opportunities for investors to invest early in a crypto project.
Platforms like Icodrops and the CoinMarketCap ICO Calendar can help you stay informed about upcoming ICOs. They provide useful information such as token price, fundraiser goal, white paper, team profile, soft cap, and so on.
4. Crypto Data Aggregators
Crypto data aggregators help you combine crypto-related data from the largest exchanges into a single real-time price field. These aggregators also usually have a list of new coins and more information that you can use to analyze your crypto. Examples of crypto data aggregators include Coinlib, CoinMarketCap, CoinGecko, CoinStats, and Kraken.
4 Precautions to Take When Trying to Invest in New Coins
Investing is risky and being involved in new crypto projects is even more risky. Therefore, there are certain precautions that you should take before parting with your money.
1. Don’t believe everything you see on social media
Social media can help you learn more about crypto and discover new cryptos to invest in. However, if you’re not careful, you’ll get poor results from social media suggestions.
Some cryptocurrencies you see on social media are pushed through sponsored ads. Often, even the marketer or influencer promoting them doesn’t know anything about it; they are only paid to promote them. As a result, such coins have no credibility.
There are many scammers on social media and you will have to take the time to filter them out and take a good look at every detail. Someone can easily replicate an account or post on social media and spread fake news. Therefore, we recommend that you follow only reputable accounts and websites as it can reduce the chances of being scammed.
2. Don’t follow the herd
Discussing crypto projects can help you come up with ideas that you might not think of if you keep them to yourself. However, you should be able to draw the line between following what everyone else is doing and discussing crypto investment ideas with people.
The herd instinct is characterized by a lack of decision-making and a willingness to behave or follow like others. While this can be a good thing in some cases, following the crowd usually has some consequences when investing, and they are often not good.
Make sure you have specific reasons for investing in a cryptocurrency – you should not invest in crypto because others do.
3. Beware of suspicious projects
When looking for new cryptocurrencies to invest in, you will also be faced with the hassle of verifying if some projects are real or if they are just bothering to steal your money.
You will see many so-called investment managers promising consistent profits and even many crypto tokens that you have never heard of. In all these cases, you should be on the lookout for suspicious projects.
4. Understand your risk appetite
Some issues associated with cryptocurrency include the price volatility of the market, issues with hackers and cybercriminals, and regulatory uncertainties related to crypto. These issues require you to consider how much risk you are willing to take when investing. Before buying a token, consider how much money you can afford to lose. Never invest more than you can afford to lose.
Some crypto trading strategies can help you reduce risk when trading. One is arbitrage trading, a scalping strategy that requires you to buy a token at a low price on one exchange or market and sell it on another almost immediately.
Always invest carefully
While investing in new cryptocurrencies isn’t a bad idea, it can be a sad decision if you’re not careful. We expect many more cryptocurrencies to be introduced in the coming days. Needless to say, there will also be many fraudulent projects, which will require you to be extra careful when trying to invest.
Before investing in a crypto project, you should check important information such as who the developers are, important contact details, the date the domain was created and the country in which it was registered. You should also check the project community on social media to see how active they are, what they are talking about and how many people are involved. You can also check how long the cryptocurrency has been around as you may prefer to invest in crypto projects that are months and years old rather than going for projects that are days or weeks old.
Remember that new cryptocurrencies are only projects with profit potential; there is no guarantee that they will yield anything significant in the future. Many new crypto projects have seen a rapid rise in price due to the hype surrounding them. However, they usually don’t last long and end up as failed projects. Therefore, do not invest everything you have in a project because you are confident in it, and never invest more than you can afford to lose.
The information on this website does not constitute and should not be considered as financial advice, investment advice or trading advice. MakeUseOf does not advise on trading or investment matters and does not advise that any particular cryptocurrency should be bought or sold. Always conduct your own due diligence and consult a licensed financial advisor for investment advice.