TL;DR Breakdown
- Identify the current market trend
- Check the category of the current market trend
- Use a cryptocurrency data aggregator to find more information on the token
- Choose a token with a use case.
It is every trader’s dream to find promising new crypto projects and ape in before they hit the big time. As the famous crypto trader’s saying goes,
Buy the rumor, sell the news – Unknown
Sporadically, we hear about traders who bought in on good projects at the early stages and made a fortune off them. This market phenomenon is attributed to the hype and attention these projects generate when they whitelist for initial coin offerings, Initial DEX offerings, airdrops, etc.
However, not all new projects are rewarding for investors, and every active trader has had their fair share of investing in scam projects. Malicious developers and scammers go as far as starting new projects with the intent to rug pull and flee with investors’ money.
Luna Yield was one of the projects that launched on the Solana launchpad a few weeks ago. They attracted alot of attention as a project on the Solana network. However, post-launch, investors couldn’t withdraw their funds. Luna Yield has since deleted all its social media accounts and made away with about $10 million.
Finding good new crypto projects
New projects are a dime a dozen within the crypto space. The situation changes immediately you change your search criteria from new projects to great startups that will stand the test of time.
- STEP I: IDENTIFY THE TREND
Identifying market trends is the first step in finding and investing in an excellent project.
“The four most dangerous words in investing are, it’s different this time.”
— Sir John Templeton
Don’t assume the market would be any different this time. Follow the trend, that where the money is. Don’t bet against the trend.
- STEP II: KNOW THE CATEGORY
A $2.7 trillion market cap industry is a big one. A trader can easily get distracted and misled by the side attractions. The crypto space has about 10393 coins, as recorded on Coingecko. Many more never make it that far.
These coins are in categories, such as Decentralised Finance(DeFi), Memecoins, NFT tokens, Gaming, and so much more. What category of coins is trending?
For example, Shiba Inu moved 700 percent in October, with other tokens in the meme coin category also recording astronomical price surges.
- STEP III: USE A DATA AGGREGATOR
One cannot go through the steps of finding a great project without a data aggregator. The most used data aggregators are Coingecko and Coinmarketcap.
- Go to Coingecko
- Check on the all categories section
- Choose a category. For the purpose of this guide, we will pick Metaverse.
- Go through the list for Metaverse-related tokens with small or undervalued market caps (They are a few months old). Most importantly, pick new crypto projects with a product or actual use cases.
With the above steps, one can spot new projects by category. You can also check out projects as they get listed on Coinmarketcap or Coingecko;
- Go to Coingecko.com
- Hover around the “coin” pane, then click on “recently added” from the drop-down menu.
- A list of recently added tokens pops up, with their market cap, the time listed, and several other details.
NOTE: 90% of new tokens are scams, rug pulls, or pumps and dumps. while some recent projects are not yet listed on Coinmarketcap or Coingecko. However, one can protect themselves by only checking new projects with tangible products or use cases.