2023-12-08
What is early-stage cryptocurrencies?
Early-stage cryptocurrencies mean
cryptocurrencies that are not reflect the future value yet.
It can be because early-stage projects do not produce result yet.
Or the projects already started to
produce value but the market has not yet responded to the price of the tokens.
There are 2 types of early-stage cryptocurrencies.
1. Early stage of the project.
If you can spot early-stage projects at
seed stage but they have potential to grow into big trees. You can buy them before
everyone know and make huge profit.
2.Early stage of the price.
If you can spot a potential token that is
undervalue and the price does not reflect the potential of the token. You can
get in early and squeeze every profit from the token uptrend. If you can buy
potential tokens early you can make 5x to 50x returns.
MATIC, BNB, and AAVE are example of
cryptocurrencies that give returns several times their original investment if
investors can find them early.
Polygon
Polygon is the pioneer of layer 2
scaling solution. During 2019 ICO ,MATIC
tokens were selling at 1 MATIC = 0.00263 USD. MATIC tokens
give 324x return from ICO price.
Chainlink
LINK price increased from $2 in 2019 to
$16 in 2023. This is a whopping 7x return.
BNB
Binance launched Binance Smart Chain in
September 2020. It later renamed to BNB Chain. Total value locked of BNB Chain
have grown from 0 to $3 billion today. BNB price have increased from $20 in
2020 to $234 in 2023 or 10x return.
Aave
Aave is a lending and borrowing
platform. It is the leader in cryptocurrency lending and borrowing category.
Between 2020 and 2021 Aave's TVL went from 0
to $5 billion in just a year. Between 2020 and 2021 Aave token went from $70 to
$500 or 6x return.
How to find early-stage
cryptocurrencies to make 5x – 50x return?
Characteristics of 5x -50x return cryptocurrencies.
1. Coins or tokens need to grow their
users by 10x.
Example: BNB Chain, Chainlink, Aave,
Immutable.
Although Immutable is not the best
blockchain in many aspects. But Immutable is the 6th most popular
blockchain for NFTs by trading volume. Immutable has a lot of users. The number of users
can increase token price.
Aave has $9.4 billion deposits. Aave tokens have market cap of $1.47 billion. Market cap of AAVE tokens are correlate to the number of deposits.
2. Coins or tokens are new technology
or new industry.
Example: Celestia, NEAR Protocol,
Uniswap.
Celestia came up with the concept of
Modular blockchain. Celestia is a blockchain development tool that let
developers design execution, consensus, data availability, and settlement
layers separately.
NEAR Protocol introduced Sharding to
create a scalable blockchain.
3. You need to hold coins or tokens for
a long period of time.
You need to hold them for more than 400
days. Tokens need to go through their accumulation phase before they break out.
4. You need to buy coins or tokens at
fair value.
Example: NEAR Protocol
In order for cryptocurrency prices to
increase several times, they need to have low market cap and low fully diluted
market cap. NEAR price can go up easier than Arbitrum or Optimism due to its
lower valuation.
5. Coins or tokens need to have strong
utility.
Example: Avalanche
Avalanche is a layer 1 and a smart
contract blockchain. AVAX token came from $3 in late 2020. In 2023 AVAX token
was trading at $26. Layer 1 tokens tend to perform better than governance or
utility tokens due to their stronger utility.
6. Coins and tokens need to be leader
in their category.
Example: Polygon
Polygon is the leader in layer 2 in
term of both total valued locked and technology. Besides Polygon PoS chain.
Polygon recently launched its new chain that uses zkRollup technology and it
support smart contracts called Polygon zkEVM.
Future potential tokens that can give
several times the cost of investment.
LayerZero
Interoperability is one of the fast-growing
sectors in crypto. LayerZero already announced that it plans to launch token in
2024.
SushiSwap, Stargate,
Radiant Capital, and Trader Joe have integrated LayerZero’s technology into
their platforms.
Starknet
Starknet is one of the layer 2 blockchain
that has potential to grow. Starknet uses zkRollup technology. Starknet
currently has $33 million TVL. Developers are starting to develop dApps on Starknet
such as Ekubo.
According to Starknet, Starknet
token will be used for paying transaction fees and participation in Starknet
protocol governance. Starknet plans to launch Starknet token in the future.
Blur
BLUR is a governance and utility token
of Blur NFT platform. Blur recently launched Blast Ethereum layer 2. It is
trying to expand its ecosystem. Blur is a platform that you should keep an eye
on.
Polygon
Polygon plans to launch Polygon 2.0 in
2024. Polygon zkEVM will support smart contracts and dApps which can increase
the value of POL token in the future.
In conclusion, you can find early-stage
cryptocurrencies and make profit multiple times your cost of investment by
looking at patterns of successful tokens in the past and using information from
the past to predict the future.
