How to Find the Next Big Cryptocurrency that will Skyrocket in Value?

Since the price increase in Bitcoin surged in 2021 there has been a significant increase in cryptocurrency and the rise of interest in the cryptocurrency from the general public. Launched in 2009, Bitcoin is the first and remains the most successful blockchain-based cryptocurrency in the world. The graph below will give you an idea of how volatile Bitcoin is and how much it has grown in value over the past years.

For individuals that have held on to the cryptocurrency that they owned when the cryptocurrency took off, they have now become extremely wealthy. Those that sold the cryptocurrency before the price rose in value unfortunately missed out on a huge opportunity.

Laszlo Hanyecz, one of the early adopters of the cryptocurrency that had just been coded into existence, purchased a pair of Papa Johns pizzas using 10,000 bitcoins. You can’t blame Laszlo Hanyecz, at that time, the purchase equated to roughly $41 back in 2010, based on the going rate for bitcoin back then. This has been widely viewed as the first time a virtual currency had been used to buy anything in the real world.

No one ever heard of cryptocurrency back then, and it pretty much seemed like a scam with no real value. I’m sure most people were wondering, a digital currency that is unregulated and using cryptography, is this legitimate?

Then there are some other people that have made significant money by holding on to the cryptocurrencies. These people most likely didn’t expect the value of Bitcoin to soar through the roof when they held their investments.

The 5 of the World’s Top Bitcoin Millionaires include:

• Sam Bankman-Fried
• Tyler Winklevoss
• Cameron Winklevoss
• Barry Silbert
• Brian Armstrong

These are the early adopters who recognized a lucrative opportunity and started accumulating or mining in the early days and held on. They might have seen the potential but they probably would not have expected the price of Bitcoin to go through the roof.

In light of the bitcoin’s price explosion and as more digital currencies flood the market, investors are looking for the next digital currency to get rich off. The tricky part is knowing which cryptocurrency will take off. No one can know for sure, however, some of the things you can look into as part of your research include:

1. Price
2. Prospects
3. Supply & Demand

1. Price

You always want to consider the price of the cryptocurrency.

If you want to get the most bang for your buck, you will want to get the most affordable pricing that is still a legitimate cryptocurrency with huge potential.

Similar to stocks, I am sure most people wished that they bought Amazon stock when it was $20 in 2001 compared to when it is close to around $3,000 in 2021. Or for eg buying Tesla stock in 2018 when it was only $60 compared to when it became $900 in 2021.

You should be able to diversify your cryptocurrency investments with a variety of low priced coins.

2. Prospects

In general, cryptocurrencies can be grouped by utility: What is the purpose of the cryptocurrency? What is its value proposition? What is it for?

Leading cryptocurrency news outlet CoinDesk maintains a Coindesk 20 list of the most popular cryptocurrencies currently being bought and sold.

CoinDesk 20 filters from the larger universe of thousands of cryptocurrencies and digital assets to define a core group of 20 which is:

• Based on verifiable dollar volume and
• Trustworthy exchange listing

The core 20 cryptocurrencies include:

1. Bitcoin
2. Ethereum
3. Solano
4. XRP
5. Tether
6. Cardano
7. USD Coin
8. Polkadot
9. Stellar
10. Polygon
11. Dogecoin
12. Chainlink
13. Internet Computer
14. Litecoin
15. Algorand
16. Bitcoin Cash
17. Cosmos
18. Filecoin
19. Ethereum Classic
20. EOS

Note: This list was last updated — using the Coindesk 20 — on Dec 19, 2021.

How do you look for potential cryptocurrencies?

For example at the beginning of 2018, XRP had a huge spike. This is because there was a strong potential for adoption outside of the cryptocurrency speculation world. Ripple, the company that founded XRP has system settlements with underlying technology in efforts to collaborate with central banks and other financial institutions.

3. Supply (Scarcity) and Demand

Supply

When looking at a cryptocurrency you want to consider the scarcity of a cryptocurrency. You will want to consider if there is a

• pre-determined maximum supply or
• if it has a limitless supply.

If interest is maintained while the supply is fixed, the price could go up. Conversely, if a cryptocurrency does not have a capped limit, its value could dwindle and drop-down given it could generate an endless supply with limited demand.

It is always wise to consider the:

1. total supply and the
2. current circulation of any cryptocurrency before you invest.

Bitcoin has a capped number of 21 million Bitcoin. As of August 2021, 18.7 million bitcoins were available, leaving roughly 2.3 million to be mined.

Conversely, Doge and Shiba Inu both have unlimited supplies of tokens that can be mined indefinitely.

Demand

You can always check the cryptocurrencies movement on the cryptocurrency exchange, Coindesk and other online sources. It is always good to keep up to the date on the current pricing, and the volumes of trade especially if you are particularly interested in a cryptocurrency that you believe could go up in value.

For eg in Feb 2021, Elon Musk announced that his electric car company Tesla had invested $1.5 billion in Bitcoin. In March 2021, Tesla began accepting Bitcoin as payment, which contributed to the spike in Bitcoin value. However, when Musk reversed course in just a short time in May 2021, saying that Tesla would stop accepting Bitcoin because of the potential environmental damage this caused Bitcoin to fall below $50,000. Additionally, this set a big pullback for other cryptocurrencies.

Nevertheless, there is no guarantee that the cryptocurrency prices will maintain given its volatile nature and the price may swing exponentially. Significant news, company changes, acquisitions, mergers, new policies and other factors could swing the market value of a cryptocurrency.

It is important to note that cryptocurrencies also trades 24 hours, 7 days a week, unlike the stock exchange that trade during business hours (NYSE 9.30- 4 pm) or (LSE 8 am-4.30 pm).

Conclusion

Always remember to do due diligence before investing in any cryptocurrencies and only invest in amounts that you feel comfortable with and can afford to lose, given the volatile nature of cryptocurrencies.

Staying up to date with the cryptocurrencies news can be very beneficial to you finding a promising cryptocurrency.

Lastly, focus on price, prospects and the supply & demand of a cryptocurrency before deciding whether it is worthwhile to invest in a cryptocurrency.