How to find new cryptocurrencies for investment

Cryptocurrency Exchanges Binance, Coinbase, Crypto.com, Gemini, Kraken Data Aggregators CoinGecko, CoinMarketCap Social Media Discord, Telegram, X (formerly Twitter) Websites Smith & Crown, Top ICO List Tools PooCoin Charts, Token Sniffer Decentralized Financial Platforms These services provide methods for creating DeFi applications and may have tokens or coins available. NFT Marketplaces OpenSea, Rarible, and SuperRare are popular marketplaces to search for new NFTs that show promise. Initial Coin Offerings Initial Coin Offerings are fundraising opportunities for potential coin releases. Exchange Traded Funds You can invest in crypto indirectly through derivatives or securitized crypto traded on mainstream exchanges.

Exchanges

Cryptocurrency exchanges are one of the most reliable sources for finding new investments. For example, Coinbase usually lists new cryptocurrencies on its website, but you need to set up an account for better access. Binance also lists new crypto that you can review and explore further.

Data Aggregators

A dataset collects information about specific topics. Cryptocurrency data aggregators help you find new crypto. For example, CoinMarketCap collects and displays a list of new cryptocurrencies, their prices, market capacity and trading volume. This type of service helps you get information to determine what other investors think about the cryptocurrency and whether it has potential.

CoinGecko is another data aggregator that lists new coins with much of the same information that CoinMarketCap offers.

Social media

Social media is known for its ability to transmit information quickly. X (formerly Twitter), for example, is one of the fastest-moving and most responsive platforms in the United States. You can easily find cryptocurrency developers and founders on X, tweeting about their cryptocurrency when there are changes or new coins.

Notifications for specific keywords on X are especially useful. If you set up alerts for phrases like new crypto, crypto release, or crypto, you’ll receive notifications about any cryptocurrency-related tweet.

Telegram is another instant messaging platform that can deliver timely new crypto developments.

Websites

There are many websites you can look at to find new cryptocurrencies. Some of the more respected ones are Top ICO List and Smith & Crown.

Tools

You can use various tools to help you verify the validity of a cryptocurrency. PooCoin Charts lets you enter the token name or its address – if it’s on the Binance Smart Chain – and displays information about transactions, contracts, holders, prices and more, so you can see if anyone else is active. There are many other tools available for token investigation.

With Token Sniffer you can enter the name or address of the cryptocurrency and display an audit of it. For example, a scan of Ax-1 Orbit (address 0x0c…b805) displayed the following information on August 13, 2022:

Warning: The coin is marked as part of a scam, bug or hack. Exchange Analysis: The token is tradable and has a buy and sell fee of less than 10% Contract Analysis: Verified contract, no previous similar contracts, the source is not an owner, no special creator permissions Holder Analysis: Creator holds less than 5 % of the stock, other holders have less than 5% of the stock Liquidity Analysis: Not enough liquidity, 95% of liquidity is burned/locked, originator holds less than 5% of liquidity Sign Agreements: None

With Token Sniffer, you can view the contract code and generate a bubble chart that shows you the creator’s address, the addresses of the top 100 holders, and the percentage they hold. You’ll also see any burn addresses, which is where developers send coins to take them out of circulation permanently.

DeFi platforms

Decentralized finance (DeFi) platforms are ecosystems that combine blockchain, programming, and user interfaces that allow you to create decentralized applications (dApps). Some may even offer exchange and trading services, but most are designed to support decentralized finance applications such as peer-to-peer lending and borrowing.

Many DeFi platforms have native tokens that are used within their networks to facilitate transactions. Examples of DeFi platforms are Maker, Uniswap and Aave. In addition to being a blockchain, Ethereum also functions as a DeFi platform because it allows users to create anything they want on it, including dApps.

Non-Fungible Token (NFT) Marketplaces

NFTs are unique digital assets that have been signed. It is the process of linking hashed information of the asset and storing it on a blockchain. This establishes ownership without doubt because the token’s network validators must verify ownership through a consensus.

NFTs are also critical components of the metaverse, an emerging technology trend promoted by companies operating in the digital landscape. OpenSea and Rarible are two examples of popular NFT marketplaces. Here you can find them ranging in price from hundreds to tens of thousands of dollars.

There are also specialized marketplaces that focus on a specific industry or sport. For example, the National Basketball Association (NBA) has an NFT market called TopShot. In addition, the National Football League (NFL) has partnered with Dapper Labs to produce exclusive digital video highlights of iconic moments in its history.

Initial Coin Offerings (ICOs)

Initial coin offerings (ICOs) eclipsed venture capital as the primary fundraising method for entrepreneurs in 2018. Startups and prominent companies alike jumped on the ICO bandwagon. Then the ICO bubble burst as scams spread throughout their ecosystem, and the Securities and Exchange Commission (SEC) began investigating and cracking down on them. The SEC is now providing significant guidance on when tokens and ICOs are considered the sale of a security.

You can still find ICOs, but they are highly regulated and not nearly as many.

Exchange Traded Funds (ETFs)

You can also invest in cryptocurrencies indirectly through derivatives traded on mainstream exchanges. The Chicago Mercantile Exchange (CME) crypto futures, including Bitcoin and ether futures, are popular with investors looking for indirect exposure to crypto. Bitcoin-linked exchange-traded funds (ETFs), based on CME’s Bitcoin futures contracts, appeared in crypto markets in 2021.

In January 2024, the long-awaited and controversial Bitcoin Spot ETFs were approved by the SEC. These ETFs offer exposure to bitcoin but are much cheaper because you can buy shares of a fund that holds bitcoin rather than buying bitcoin directly.

Research on new crypto coins

Under their technical jargon, cryptocurrencies are products that serve a purpose, whether it’s just a payment method (bitcoin) or as a utility token used to perform actions on a blockchain (ether).

Here are some factors to look for and tools you can use to help identify a coin that is not a so-called backhaul, which is a coin whose developers will accept payments for it and then collect it whichever platform you bought it from. also keep the funds you paid.

Use cases

Ethereum’s ether (ETH) token is used as a payment system on its blockchain. This makes ETH a perfect example of a use case that can incentivize someone to buy ETH. Ethereum is designed for scalability and future development, making it an ideal ecosystem to build DeFi applications.

The uses for Ethereum, the global virtual machine that powers much of DeFi—and is rumored to power Web 3—continue to grow. New utility tokens designed to run on the Ethereum Virtual Machine (EVM) emerge regularly.

Bitcoin, on the other hand, was simply designed as a payment method. But when investors noticed its price rising, the token developed a different purpose. The global pandemic shut down much of the world’s economy for a short time, and stock markets around the world tumbled. However, Bitcoin has become a safe haven for investors looking to preserve value and a speculative investment.

The more use cases a new coin and the blockchain that supported it, the more likely it is that the cryptocurrency will last long enough to experience growth. However, this will not always be the case.

Liquidity

A cryptocurrency needs liquidity – meaning it needs to have enough trading volume to sell it quickly if needed. If you find a cryptocurrency with zero volume, you should consider waiting to see if it will develop any. If other investors are not trading a new crypto coin in large quantities, it may indicate that it is not yet worth buying or is a scam.

Value

You must identify the value that a coin has or can have. It is likely that if it has value to you, others will. This type of value is not just monetary; it’s more intangible, like an NFT that you identify with on a personal level.

Some songwriters and musicians create NFTs from their music. Purchasing a song NFT directly supports the artists and gives you ownership of the token and any rights the artist granted when the token was minted. The sports vouchers previously mentioned could be the equivalent of trading cards or videos of the future.

Some additional considerations are:

Outlook: If you can identify a cryptocurrency with an edge over others — such as providing a solution to a widespread problem — it can be a good investment because it can have a long life. Supply and Demand: Many cryptocurrencies have a predetermined maximum supply. When that maximum is reached, typically through mining attempts, no new tokens will be produced. Demand may increase or decrease depending on market sentiments and use cases. Price and Volume: Up-to-date information on cryptocurrency trading is easily available online. Digital currencies with increasing prices and trading volume are likely to be the ones with momentum. Of course, there is no guarantee that this momentum will be maintained, but it is nevertheless a useful way to see which digital currencies have the most investor interest for now.

The Bottom Line

The universe of investable cryptocurrencies and crypto-related products and services is still small and requires careful evaluation. If you are interested in investing in digital assets and new crypto, you should first talk to a financial professional to help you figure out if the investments make sense for your goals and financial circumstances.

The comments, opinions and analyzes expressed on Investopedia are for informational purposes online. Read our warranty and liability disclaimer for more information. As of the date this article was written, the author does not own cryptocurrency.