The little-known cryptocurrencies can bring more substantial profits than the popular ones, due to the greater growth potential. Finding a promising currency among all the unpopular varieties is difficult enough, but possible. What is special about investing in unpopular cryptocurrencies? How to choose the most promising of them and by what parameters to evaluate them? We will describe in this article!
The unpopularity of most cryptocurrencies is most often natural. Some currencies were created as forks of the leading ones, but they did not bring in anything new and would not bring them in, respectively, they would not grow. Others have technical innovations, but they are so useless or uncomfortable that no one needs them. Others are generally released by scammers.
There is among this set another type of cryptocurrency – undervalued. Undervalued cryptocurrencies are coins that were created with serious intentions, but due to certain circumstances have not yet “soared”.
Popular cryptocurrencies by 10,000%, and even less by 100,000%, are unlikely to grow. That was their initial growth potential, but over the years of their development they have spent a significant part of it. Cryptocurrency potential is a loose concept, but not limitless.
Having the initial potential of 100,000% and rising to those 100,000%, the coin can grow by another 100%, 200%, but not 100,000%, because it already costs as much as it should cost according to the market. It is already appreciated by the market.
Undervalued currencies are called that way, because they are not properly valued by the market yet. The growth potential of the little-known cryptocurrencies is from 1000% – and this is the minimum, because any cryptocurrency, including the popular ones, can grow by 100-200%. It is for the profit of 1000% that investors pay attention to the reservoir of lesser-known currencies.
Among the undervalued there are both currencies that have appeared long ago and recently entered the market. Both categories have a chance to grow, but when looking for it is worth considering that the coins that entered the market a long time ago will grow more slowly.
The lack of growth immediately after the coin enters the market at best entails a lack of investors. Investors will not come quickly, at least at the beginning. Only when the currency more or less rises and this process is noticed, will people begin to buy it and thereby accelerate its growth.
In the worst case, the lack of growth of cryptocurrency immediately after the release could be due to factors that lowered the level of confidence in it. Such a currency will grow even slower, since the level of trust will have to be raised not from scratch, as in the previous case, but from negative values.
The potential for rapid growth is mainly in newly released currencies. The market did not have time to evaluate them, so they, like any cryptoactive in the beginning of existence, cost a little. However, this situation can not last for a long time, and they take off in a very short time, so you need to invest in them quickly.
This does not mean that you only need to buy coins from the latter category. However, the prescription of appearance should be taken into account when calculating the return on an asset for a certain period of time in the future.
Also, when searching for a little-known cryptocurrency, you need to take into account that the coin, profitable in the future, must in the present either show growth or follow the market.
Exceptions are a coin that can fall in a growing market, and then suddenly grow. However, the growth of such coins is provided not by undervaluing, but by other factors (for example, pamping). In addition, no wonder cases – exceptional. Basically, little-known coins falling in a growing market never bring anything to investors.
A little-known currency, which is growing regardless of the state of the market, should also be assessed carefully. A sharp rise in a falling market for no apparent reason also points to an artificial appreciation. However, slow growth in a falling market indicates the likely prospects of a currency. The same indicates rapid growth in a growing market.
Following the market movement is a normal state for undervalued cryptocurrency, but there are some nuances. With the growth of the market, such a currency will grow a little faster than another, otherwise it will most likely be no better than the neighboring ones. On a market downturn, it should not decline much more than most other little-known ones. Otherwise, we can assume that there are reasons for its rapid decline, and when a coin has reasons for decline, it is not worth investing in it.
Also, the potentially profitable little-known cryptocurrency should have reasons for growth. Their absence indicates the unpromising asset of their absence with signs of growth – the presence of a manipulator on the market and the unpromising asset.
Guided by the above, an investor can choose a few dozen or even a couple of hundred of the most promising, in his opinion, little-known assets. Buy all at once, of course, you should not evaluate each.
In other words, it is the reason of creating of cryptocurrency. For example, the developers wanted to create a currency that is protected from an attack of 51%, more secure in terms of de-anonymization, and so on. Objectives may not be global, the currency may be hardfork, in which it was planned to improve minor trifles as compared with the progenitor. Perhaps it was created to be used as an internal means of payment in a certain project. There must be a goal different from the intention to “make money” – then it is advisable to invest in it. If the creators put earnings at the forefront – investing is dangerous.
Some ideas of developers may be well implemented technically, but they are not interesting to most cryptographic users. For example, a cryptocurrency can be created for a project that is being launched, but clearly doomed to failure. It is little known because of the failure of the project and will not become more popular due to the unpromising idea. Other ideas may be interesting and promising, but technically poorly implemented – so that it is impossible to use currencies. They will not grow without improvement either. However, interesting, but slightly flawed and refined currencies have significant chances for growth.
It is risky to invest in overly volatile, little-known cryptocurrencies in assets where trading volumes and other market indicators change rapidly and for no apparent reason. The activity is initially weak in the markets of little-known cryptocurrencies and its sharp jumps indicate the presence of manipulators, otherwise they are not justified. Such a currency will probably also grow for unnatural reasons, so you should not invest in it.
The seriousness of the developers is determined by the seriousness of their approach to product development. The seriousness of the approach is evaluated by the quality of the work of each of the team members. The professionalism of the team increases the level of investor confidence, therefore, the more qualitative its work, the greater is the chances of growth for cryptocurrency. It is worth considering the fact that a high-quality website to order is not a problem for fraudsters, so this criterion can not be fundamental.
Cryptocurrency creators must interact with crypto users. If the cryptocurrency has significant technical characteristics, then, most likely, the interaction will occur on technically oriented resources like GitHub, Reddit and others. If the project is social, investment, focused on the average user, then the activity should be noticeable in social networks, instant messengers, on forums. Little-known, but promising cryptocurrencies rarely cover all possible channels – that is why they are also little-known. However the more communication methods there are and the more each of them becomes, the more investors will get involved and the faster the currency will grow.
A cryptocurrency with a good idea and a good implementation can be targeted to users of a particular country. If a country does not have a significant influence in the cryptosphere and / or in the world economy, the currency will naturally remain little known. For example, a cryptocurrency oriented towards Malay users is unlikely to grow by 10,000% — a maximum of a few hundred percent if it spreads among Malays. Cryptocurrency, targeted at US users and well implemented, is more likely. However, even more likely the currency is oriented to the whole world, all other things being equal, of course.
It is difficult to estimate little-known currencies correctly. There is too little information about them in the network. For example, the documentation on currencies that entered the market through the ICO and remained unpopular is still available. A business plan, development strategy, or similar data regarding cryptocurrencies that were issued to bypass the ICO, often can not be found.
Investors need to communicate directly with the creators and evaluate the directly communicated information and the indirect information. This seems too difficult and unrealizable to many people, especially if the investor does not have technical knowledge about blockchain technologies or business knowledge that will allow him to request relevant information from the creators.
The general information about the cryptocurrency from the creators, as many reasonably believe, can be equally true and deceiving.
However, with a competent, thoughtful approach, a thorough analysis can reveal promising currencies. So, the idea of cryptocurrency, its prospects and implementation can be estimated from the words of other users in various world crypto forums. The technical characteristics of it are incorporated, the refinement or “dampness” is obvious in the process of use, so there are usually reviews.
Projects, if a cryptocurrency is created for them, can also be rated “from the outside”, like ordinary companies in a traditional business. Charts of market indicators are always in the public domain. Everything is usually clear with geographic location, because this is one of the main characteristics of cryptocurrency.
Some problem for a beginner can only be the criterion of professionalism. Scammers today have learned how to competently interact with cryptographic users and are able to imitate the professional development of a currency for the uninitiated potential investor.
If an investor has not previously encountered such a type of evaluation, is poorly able to read non-verbal information and is not sure about the currency (there are no obvious technical or other reasons for growth) – you can advise him to contact expert agencies or professionals who can conduct a qualitative fundamental analysis of cryptocurrency.
However, the experience of self-investment relatively quickly develops the skill of analyzing all the features of a currency. Therefore, it may be worthwhile to start developing this skill — just be careful not to invest large amounts in questionable, little-known cryptocurrencies at first.