How to find new cryptocurrencies for investment? A comprehensive guide by Digimagg

The surge of capital has expanded the scope of cryptocurrency investing, rendering it intricate with over two million cryptocurrencies available. Each presents a plethora of technical jargon to articulate its value proposition. Hence, finding viable investment options entails knowing where to search and how to assess them, facilitating informed investment decisions.

The cryptocurrency market

After a downturn in early 2022, Bitcoin and other cryptocurrencies experienced a partial recovery in 2023. However, the cryptocurrency market remains highly volatile, with Bitcoin prices fluctuating significantly over short periods.

Despite this volatility, cryptocurrencies have become increasingly integrated into mainstream financial discussions, where the principle of "buy low, sell high" prevails.

Consequently, cryptocurrency prices have experienced both significant growth and decline since their inception in 2009, as investors have alternately poured money into and withdrawn from this asset class in search of returns.

How to find new cryptocurrencies for investment?

Understanding the cryptocurrency realm can be challenging. The lack of reliable evaluation criteria and the prevalence of scams have only heightened the confusion and skepticism among potential investors.

However, despite these challenges, cryptocurrencies may present an investment opportunity worth exploring. They can contribute to portfolio diversification, and their price volatility might yield attractive returns. Several platforms and resources are available to track the emergence of new cryptocurrencies:

Exchanges

Cryptocurrency platforms serve as reliable sources for discovering new investment opportunities. For instance, Coinbase regularly features newly listed cryptocurrencies on its platform, although accessing them typically requires creating an account. Similarly, Binance offers a variety of new crypto assets for users to explore and assess.

Social media

Social networking platforms are renowned for their rapid dissemination of information. Twitter, for instance, is recognized as one of the fastest-moving and most responsive platforms in the United States. Cryptocurrency developers and founders frequently utilize Twitter, now known as X, to share updates and announcements about their cryptocurrencies.

Setting up notifications for specific keywords on Twitter can be particularly beneficial. By configuring alerts for terms like "new crypto," "crypto release," or simply "crypto," users can receive real-time notifications whenever there are relevant tweets related to cryptocurrency.

Telegram, another popular instant messaging platform, also serves as a valuable source for timely updates and developments in the world of new cryptocurrencies.

Data aggregators

Data aggregators specialize in compiling information on specific subjects, including cryptocurrencies. Platforms like CoinMarketCap aggregate data on new cryptocurrencies, presenting details such as their prices, market capitalization, and trading volumes. This allows investors to gauge market sentiment and assess the potential of these emerging digital assets. CoinGecko operates as another notable data aggregator, providing similar information to CoinMarketCap, aiding investors in discovering and evaluating new coins.

Tools

You have various tools at your disposal to verify the legitimacy of a cryptocurrency. PooCoin Charts, for example, allows you to input the token name or address (if it's on the Binance Smart Chain) and provides details on transactions, contracts, holders, prices, and more. This helps you gauge the activity surrounding the token. There are several other tools designed for token investigation.

Token Sniffer is another tool that allows you to input the cryptocurrency's name or address and conducts an audit of it. For instance, a scan of Ax-1 Orbit (address 0x0c...b805) on Aug. 13, 2022, revealed the following details:

• Warning: The coin was flagged for potential involvement in a scam, bug, or hack.
• Swap analysis: The token is tradable and incurs a buy-and-sell fee of less than 10%.
• Contract analysis: The contract is verified, with no prior similar contracts, and the source is not an owner. There are no special creator permissions.
• Holder analysis: The creator holds less than 5% of the supply, and other holders also possess less than 5% of the supply.
• Liquidity analysis: There is insufficient liquidity, with 95% of liquidity burned/locked, and the creator holds less than 5% of the liquidity.
• Token similarities: There are no similar tokens found.

Token Sniffer provides the capability to examine the contract code and generate a bubble map illustrating key details such as the creator's address, the addresses of the top 100 holders, and the respective percentages of the tokens they possess. Additionally, users can identify burn addresses, which are destinations where developers transfer coins to permanently remove them from circulation.

Websites

Numerous websites are available for discovering new cryptocurrencies. Among the reputable options are Top ICO List and Smith & Crown.

Decentralized Finance platforms (DeFi)

Decentralized finance (DeFi) platforms are environments integrating blockchain, coding, and interfaces enabling the development of decentralized applications (dApps). While some offer trading services, the primary focus is on supporting DeFi applications like peer-to-peer lending and borrowing. Native tokens within these platforms facilitate transactions. Examples include Maker, Uniswap, and Aave. Ethereum serves as both a blockchain and a DeFi platform, allowing users to create diverse dApps on its network.

Initial Coin Offerings (ICOs)

In 2018, initial coin offerings (ICOs) surpassed venture capital as the main fundraising avenue for entrepreneurs, attracting both startups and established firms. However, the ICO market eventually collapsed due to rampant scams and increased scrutiny from regulatory bodies like the Securities and Exchange Commission (SEC). Consequently, the SEC now offers extensive guidance on determining whether tokens and ICOs constitute the sale of securities. While ICOs still exist, they are subject to strict regulations and are far less prevalent than before.

Non-Fungible Token (NFT) marketplaces

NFTs represent unique digital assets that undergo tokenization, a process involving linking hashed information from the asset and recording it on a blockchain. This ensures undisputed ownership, as validators on the token's network must reach a consensus to verify ownership.

Furthermore, NFTs play a crucial role in the metaverse, an emerging technological trend embraced by companies operating in the digital realm. Platforms like OpenSea and Rarible serve as popular NFT marketplaces where these digital assets are traded, with prices ranging from hundreds to tens of thousands of dollars.

In addition to general-purpose marketplaces, there are specialized platforms catering to specific industries or sports. For instance, the NBA operates TopShot, an NFT marketplace focusing on basketball-related assets. Similarly, the NFL has collaborated with Dapper Labs to create exclusive digital video highlights commemorating iconic moments from its history.

Exchange-Traded Funds (ETFs)

Indirect investment in cryptocurrencies is possible through derivatives traded on major exchanges. Examples include the Chicago Mercantile Exchange (CME) crypto futures, which encompass Bitcoin and ether futures and are favored by investors seeking indirect exposure to crypto. Moreover, Bitcoin-linked exchange-traded funds (ETFs), built on CME's Bitcoin futures, entered the crypto market in 2021.

In January 2024, the Securities and Exchange Commission (SEC) approved Bitcoin Spot ETFs, which had been eagerly anticipated and contentious. These ETFs provide exposure to bitcoin at a lower cost since investors can purchase shares of a fund containing bitcoin instead of directly acquiring the cryptocurrency.

Exploring fresh cryptocurrencies

Behind the intricate terminology, cryptocurrencies serve distinct functions, such as serving as a payment method (like Bitcoin) or as utility tokens facilitating actions on a blockchain (like Ether).

Here are several aspects to consider and tools to utilize when assessing a coin's legitimacy, ensuring it's not a "rug pull," where developers accept payments for a coin and then remove it from the platform while retaining the funds.

Use cases

Ethereum's native token, ether (ETH), serves as a means of payment within its blockchain network. This characteristic makes ETH a compelling example of a use case that might motivate individuals to invest in it. Ethereum is engineered for scalability and ongoing development, positioning it as an ideal environment for the creation of decentralized finance (DeFi) applications.

The utility of Ethereum, often referred to as the global virtual machine powering a significant portion of DeFi and speculated to underpin Web 3, is continually expanding. Consequently, new utility tokens tailored to operate on the Ethereum Virtual Machine (EVM) surface regularly.

Bitcoin, conversely, was initially conceived solely as a payment instrument. However, as its value surged, investors identified an additional purpose for the token. During the global pandemic, when many economies faced temporary shutdowns and stock markets experienced downturns, Bitcoin emerged as a haven for investors seeking wealth preservation and speculative opportunities.

The breadth of use cases associated with a new cryptocurrency and its underlying blockchain technology often correlates with its long-term viability and potential for growth. Nonetheless, this is not always guaranteed.

Value

You should ascertain the intrinsic value of a coin, or its potential value, as it is probable that if it holds value for you, it will also be valued by others. This value may not solely be monetary but could be more abstract, such as an NFT that resonates with you personally.

For instance, some songwriters and musicians are venturing into creating NFTs from their music. Acquiring a song NFT not only supports the artists financially but also grants you ownership of the token along with any associated rights conferred by the artist during token minting. Similarly, sports tokens mentioned earlier may evolve into the equivalent of future trading cards or video memorabilia.

Other factors to consider include:

• Potential: Identifying a cryptocurrency with distinct advantages over others, such as offering solutions to widespread issues, could present a promising investment opportunity due to its potential longevity.
• Supply and demand dynamics: Many cryptocurrencies have a predetermined maximum supply, after which no new tokens will be generated, typically achieved through mining. The balance between supply and demand, influenced by market sentiments and practical applications, plays a crucial role in determining a cryptocurrency's value.
• Price and trading volume: Real-time data on cryptocurrency trading activity is readily accessible online. Digital currencies experiencing upward trends in both price and trading volume often signify investor interest and momentum. While there's no assurance that this momentum will persist, it serves as a valuable indicator of which digital currencies currently command the most attention from investors.

How can I acquire new cryptocurrencies?

You can obtain them and other digital assets from cryptocurrency exchanges, decentralized finance platforms, non-fungible token marketplaces, and initial coin offerings.

How can I obtain a new cryptocurrency before it's listed? 

New cryptocurrencies might be accessible in a presale before they're listed on an exchange, but caution is advised. Instances of cryptocurrency issuers disappearing with investors' funds post-fundraising are not uncommon, along with other scams.

How Frequently Are New Cryptocurrencies Introduced?

New cryptocurrencies are introduced regularly. CoinMarketCap, a data aggregator, showcases new coins and tokens daily, while Top ICO List provides information on new ICOs. Social media platforms like X and Telegram are also popular channels for announcements regarding new coins.

In summary, the realm of investable cryptocurrencies and crypto-related offerings remains relatively limited and demands thorough scrutiny. If you're considering investing in digital assets and new cryptocurrencies, it's advisable to consult with a financial expert to assess whether these investments align with your objectives and financial situation.