fbpx

Crypto Gem Hunting: A Beginner’s Guide

  • Crypto gems are coins and tokens with massive growth potential.
  • To win big, you must find them until they are super cheap.
  • Hunting for crypto gems is not rocket science.

Whoever gets in early, wins big. We’ve all heard the numerous stories of people who invested a few thousands in the early-stage cryptos and ended up being millionaires.

Who wouldn’t want that?

In this beginner’s guide, we’ll take you through the basic steps for where to find the next crypto gem and how to recognize it.

So let’s jump in.

What is a Crypto Gem?

Cryptocurrency gems, or just crypto gems for short, are the coins or tokens with unbound potential for growth. Typically these are cryptos that are either in the early stages of development, or that are somehow undervalued. In most cases, these assets are off the public radar as well.

Such gems are always low, or even microscopic, market cap cryptos that have room to increase in price by 10x, 20x, or even 100x.

They are generally not listed on major crypto exchanges, and so they have low trading volumes and, accordingly, low market capitalization.

So, if thousands of new buyers discover these gems and start buying them, their trading volumes shoot up, and so do the prices.

The key thing is that small market-cap cryptos require much lower amounts of volume to make a big difference than large-cap cryptocurrencies.

Because of their microscopic market capitalization, crypto gems have the highest potential to explode, and therefore generate plentiful rewards.

On the other hand, they are also the riskiest. This is what makes the process of hunting for crypto gems so thrilling.

Where to Look for Crypto Gems

To win big from micro-cap cryptos, you have to buy them while they are EXCEEDINGLY cheap. That’s the key.

Unfortunately, this also means finding gems before they attract massive attention. If you heard about some great new coins from news media, it’s already too late.

So then, that means it must be better to become some kind of crypto detective and start your own research. Isn’t this fun?

Here is the list of most promising places to search for cryptocurrency gems:

Crypto Launchpads

One of the best initial places to begin your quest for early-stage crypto projects are cryptocurrency launchpads.

They are like decentralized fundraising platforms, where anyone can find data on upcoming token sales, Initial Coin Offering (ICO), and Initial DEX Offering (IDO) listings.

Experienced crypto gem hunters use launchpads as a starting point for identifying promising projects, and to participate in their presale rounds.

This means investors can buy cryptos prior to their public ICO launch. They buy coins at a fixed price, providing the developers with the money necessary to finalize their projects. Investors meanwhile, get one of the lowest possible price points for their trust in the risky early-stage projects.

There are multiple crypto launchpads to find on the internet. PolkaStarter, DuckStarter or ICO Drops are the most common.

New Listings on Crypto Exchanges

Cryptocurrencies rise in value due to growing demand. Naturally, to generate demand, they have to be available publicly or, in other words, listed on crypto exchanges.

Crypto exchanges unlock entirely new horizons and possibilities than simply presales or ICOs. Receiving a listing on them often comes with huge spikes in price for the token in question.

The centralized and most prominent crypto exchanges like Coinbase, Binance and Kraken are constantly announcing new, upcoming coin listings on their websites.

However, they also apply strict policies to their new listings. Therefore many early-stage crypto projects start from more liberal decentralized exchanges (DEX).

The most popular DEXes like UniSwap, dYdX and PancakeSwap don’t have stringent requirements for new coins.

Crypto Price Tracking Sites

Major crypto price trackers, like CoinMarketCap and CoinGecko, follow thousands of cryptocurrencies.

They provide data regarding prices, market caps, circulating and total supplies for all of these coins, even the micro-cap ones.

Such platforms also provide information for which exchanges each crypto is listed on. In addition to this, they also publish calendars for upcoming cryptocurrency airdrops and ICOs.

Here’s where the first phase of your crypto gem hunt comes to an end. Whenever you find promising coins, you have to complete the next step; double-checking.

How to Research Crypto Gems After You Find Them

Experienced crypto hunters say there are no shortcuts to identifying gems. If there were, we’d all be rich, they add. The only verified way is proper research.

To evaluate if a coin has growth potential and whether it is a scam or not, you have to check information such as the project itself, its team, key metrics, and the community behind it.

The ID of the Project

Research the idea, the uniqueness and the characteristics of certain crypto. Why was it created, what does its project do, what problem does it solve? And most importantly, HOW?

Examine how a given crypto project is different from the competition. How does its whitepaper look? Is it credible, and does it explain itself to you enough? Or is it just being fancy and technical simply to draw you in?

Then check out the project’s roadmap. It should show what stage of development the crypto startup is at, and how its future is planned.

Finally, go to the official website and the associated social media. If they look incomplete and feature a lot of grammatical errors, or broken links, then it’s likely a scam. Serious projects care about their reputation and invest in how they appear.

Team behind

Nobody likes to entrust their money to an anonymous, or inexperienced team. Thus the people behind any project are of key importance.

To begin your research here, check the social network accounts of the project’s founders and developers. What are their experiences and reputations? Have they worked with crypto before? Do they have the required skills to make a crypto project successful?

You can even consider using Google image search to check if they are real people and not nice faces from stock photo banks. No matter how crazy it may sound, scammers often mask their identities with fake pictures.

Then analyze the size of the team. Startups with several leaders and a few developers should raise a red flag. Creating a successful project requires much higher resources, from lawyers to marketing and PR.

Finally, check if the project has any venture capital backing. Investments from solid, reputable firms are always a good sign.

Community

Crypto ad capabilities are limited and fall under multiple regulations. Therefore social media platforms and internet forums are critical tribunes for cryptocurrency projects. They hold huge power to move coin prices.

Crypto projects put lots of effort into building and keeping their communities. Thus projects with small (under 20k users) and inactive follower bases are atypical.

Social media can also be a perfect indicator of how transparent a given project is and how much it shares with its audience.

Metrics

Investigate token metrics. Usually, the key ones are: market capitalization, supply, price and trading volume.

  • Look for coins that have low, small, and even micro market capitalization. Micro-cap cryptos are usually those with market values under $50 million, and they have the biggest potential to grow.

Then check the circulating and maximum supply numbers. A fixed maximum supply suggests that the asset is scarce, which typically leads to price growth over time.

  • Skip projects with billions of tokens in supply. It’s best to search for projects with fewer coins as they have the most potential to grow in price and keep the market cap realistic.

If possible, check how many wallets already hold a certain coin. Websites like Etherscan and BscScan share such information.

New coins will probably not have a huge number of holders. But if only a few owners hold a major part of supply, then it’s better to avoid such projects.

  • Further, look at the price chart to see how the coin has acted in the past.

There are thousands of pump-and-dump coins that unexpectedly rise and then crash just as suddenly. If you see major spikes in price charts, check if there were any fundamental reasons for it.

  • Finally, look at the trading volume. This is the total number of coins that were bought and sold on crypto exchanges.

A high volume indicates that the market is more liquid, giving more chances to buy and sell coins without drastic price swings. Check on the 24h volume to get a good impression.

On The Flipside

  • Crypto gem hunting is rewarding, but risky. It’s a goldmine for scammers too, so be wary.
  • If you are totally new to crypto, it’s better to start with established, and thus less risky coins with higher market caps.
  • Social media data is easy to manipulate. Whenever you see an unknown coin suddenly storming the internet, first dig deeper to be sure that it’s not a pump and dump.

Why You Should Care?

You can apply the same crypto gem hunting rules to any cryptocurrency. Exclude market-cap nuances, and they’ll become generic. So if you’re planning to learn how to research cryptos before investing in them, this is also a solid guideline for your future in the space.

EMAIL NEWSLETTER

Join to get the flipside of crypto

Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.

    You can always unsubscribe with just 1 click.

    This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed to be financial legal or tax advice. Trading Forex, cryptocurrencies, and CFDs poses a considerable risk of loss

    Rate This Article
    In order to improve, we give you the opportunity to rate DailyCoin content
    Author

    Simona is a fintech journalist and content editor at DailyCoin Academy, which focuses on educating new crypto investors. She entered the crypto space in early 2018, got burned, but discovered a passion for trading, and now it’s her hobby. Simona covers crypto and blockchain-related topics and takes a deeper look at what lies behind the latest industry trends.