The cryptocurrency market is preparing for a new bull run. That’s why it’s more important than ever to identify altcoins that have the potential to skyrocket in value. Fear of missing out (FOMO) has gripped investors, with meme-coins like BONK surging nearly 1,300% in the past month. Crypto expert Bary Rahma has compiled a checklist to determine which altcoin projects have potential.
How to identify altcoin projects for a bull run?
1. Narrative relevance
cryptokoin.comAs you follow from , dominant narratives greatly influence cryptocurrency markets. Altcoins that align with current trends or address emerging challenges in the digital economy often experience rapid growth. For example, tokens associated with artificial intelligence (AI) or tokenized real-world assets (RWA) have gained importance as these sectors have developed.
2. Market value
A market cap below $50 million generally indicates that an altcoin is in the early stages of development. This provides a unique opportunity for investors to take the first steps for the altcoin. A lower market capitalization indicates a higher growth potential with increased risk.
3. Circulatory dynamics
The percentage of tokens in active circulation is a critical indicator of an altcoin’s market health. A high circulation rate means more dispersed and less concentrated ownership, which can reduce the risks of market manipulation and volatility.
4. Caliber of the team
The success of an altcoin project depends significantly on the team behind it. Teams that are experienced, transparent and willing to reveal their identities demonstrate a commitment to the long-term success of the project. It also helps build trust among the investor community.
5. Venture capital (VC) support
Backing from top VCs in the crypto industry, such as Andreessen Horowitz, Coinbase Ventures, Sequoia Capital, and Pantera Capital, is a strong sign of an altcoin’s potential. These investors typically conduct meticulous due diligence before committing funds. Therefore, their participation is a vote of confidence in the future prospects of the altcoin project.
6. Protocol use
Current and anticipated use of the protocol is a vital measure. More promising are altcoin projects that are integral parts of protocols with real-world applications or are expected to be widely used soon. This is because practical benefits increase demand and therefore value.
7. Revenue recognition for token holders
An altcoin’s design should ideally provide benefits to its owners, such as dividends or a share of the project’s revenue. This feature is crucial for attracting and retaining investors. Plus, it provides a tangible return on investment.
8. Liquidity
Liquidity refers to the ease with which an asset can be bought and sold in the market without affecting its price. High liquidity allows for smoother transactions. Additionally, it reduces the risk of price manipulation. Therefore, it is an important indicator for altcoin selection.
9. Community power and marketing
A robust and engaged community, coupled with effective marketing strategies, are indicators of an altcoin’s potential for longevity and success. Strong community support leads to greater adoption. Strategic marketing efforts increase visibility and attract new investors.
In summary, although investing in altcoins carries inherent risks, adhering to this comprehensive checklist can guide investors in making more informed decisions. To maximize investment potential, it is important to conduct thorough research and stay up to date on market trends.
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