One of the ways investors make money is by investing in cryptocurrencies like Bitcoin, Ethereum, Ripple or Litecoin. These cryptocurrencies are a risky investment but can help you become rich quick. This holds true only when the value of the cryptocurrency rises rapidly over a short period. However, this is not likely to happen because the numbers game will catch up with these cryptocurrencies sooner rather than later.
Identify a new cryptocurrency
So, if you want to invest in cryptocurrencies and become rich quickly, then it makes sense for you to first identify and then trade in the next big cryptocurrency. Again, for this strategy to work, you need to act while there is still a lot of hype surrounding the cryptocurrency. However, it is not going to be easy to find the next cryptocurrency because there are more than a thousand of them to pick and choose from. To understand why take a look at what KEDGE Professor Eric Pichet says regarding Bitcoin fundamentals.
According to him, Bitcoin is a ‘headless currency’ that does not have any intrinsic value. It is also not a financial asset but an investment vehicle that makes it possible for you to become rich. People will only get rich by getting in first and investing in cryptocurrencies whose value rises rapidly from the day of the ICO (Initial Coin Offering). Still, there is hope for those who want to find the next big crypto coin. Here is what you need to know about locating the next Bitcoin, Ethereum or Ripple:
Find a new, low priced crypto
The first thing you need to do is find a cryptocurrency whose value is under one US dollar. This kind of value makes people believe the cryptocurrency is cheap. Investors are attracted to anything that they can have for less money. Also, a small value is more likely to double and triple in value than a large value. RubleBit with a value of 0.038 has risen by a factor of 522 percent in just one week. CYDER is another option which has seen a rise in the value of 7412 percent.
Research all you can
Look at different cryptocurrency websites and then try to identify the coins that look like they will easily be adopted as a cryptocurrency. This is a method that can be used to find out what a cryptocurrency’s intrinsic value is once it has been adopted sufficiently. The quantity theory of money can help you find out the intrinsic value of the coin.
Use Reddit to locate coins that have a nice community following. Communities are made up of people who we call innovators or who adopt currencies before others become aware of their potential. These groups can spread the word to the larger community about a particular coin and in this way, they generate demand for the coin. Such demand then leads to a price hike and that is how an early bird investor makes money from coins.
Identify coins with a large circulation
It pays to identify cryptocurrencies which have a large circulation. Such cryptocurrencies have a greater potential of rising in value. When coins appreciate in value quickly, their supply tends to be limited. Such coins hold the most promise of becoming the next big cryptocurrency.
Study the price charts
It pays to research cryptocurrency volumes and price charts. The next big coin is one whose price is accelerating and whose volumes are growing.
The above-mentioned tips are not set in stone and should be taken with a liberal dose of caution. If you make the mistake of investing based on hype, you are playing a very risky game. One wrong move can lead to major financial losses.