A lot of people believe that they have an infallible instinct for recognizing the next big asset on the market. Nowhere is this as true as in the cryptocurrency industry.

People want to see what they want to see. When it comes to cryptocurrencies, everyone wants to be the one to discover the next Bitcoin. First, in order to find any success in crypto investment, you need to let this idea go. 

Next, you need to tell apart actual signs from your wishful thinking. To help you out with this, here are the top five early signs that the cryptocurrency in question is actually worth investing in. 

1. Reviews from tech experts

The first thing you need to understand is that a story about how when you hear of crypto, it’s already too late to invest isn’t exactly true. There is some truth to it (with an emphasis on some). You see, when you hear your barber and the cashier at a local store talk about it, it’s way too late. The same can be said about hearing about it from a celebrity or an influencer. 

On the other hand, hearing about it from a tech specialist is always a good sign. According to tech specialist Kane Pepi, the work of cryptocurrency reviewers often goes unnoticed, even though it consistently proves to be reliable. People hate this type of semi-formal research and prefer to be told by a person of perceived authority what to do.

Warren Buffet once said that if he posted a video about his morning routine, people would go mad about it, but if he tried talking about investment in-depth, this wouldn’t gain much traction.

Discovering the best crypto to invest in now does not have to rely on some mystical force. There are serious, credible reviews and reports out there. The best part is that these reviews are based on facts and have some pretty solid arguments. However, no one is reading these reviews.

2. Getting information directly from the source

Another amazing idea is to try to get the information you need directly from the source.

First, you need to inspect the team and leadership. No, a cryptocurrency is not something built out of thin air, nor is it built out of raw resources and local market conditions. The thing is that the team is everything. Even the best vision will fail if it’s not executed right, and this is where the team behind the asset and the leadership matter.

Next, if you have the necessary knowledge and reading comprehension (for such a highly technical text), you should look for their whitepaper. Here, you’ll find everything crucial for the success of a given crypto. 

You must also focus on their vision. It’s just that you have to learn how to read past the surface. When it comes to vision, there’s always a lot of HR talk, but you’ll doubtlessly, eventually, get to the bottom of what kind of team they really are.

Lastly, you need to understand that every crypto is a living and evolving asset. So, read regular updates and actively follow development. If things go south, it really shouldn’t be too late for you to sell. 

3. Real-world use cases and market demand

Cryptocurrencies are more useful than you think. Sure, you can use them transactionally, but at the same time, you can do so much more. People are using cryptocurrencies to buy goods and pay for services, and some are even using them to place bets at the best online casinos. The more real-world use a cryptocurrency has, the higher its growth potential. It’s that simple. 

Utility coins are especially promising, seeing as how each of them is gatekeeping an important function. For instance, with the growth of the significance of AI platforms, AI coins have grown in popularity quite significantly.

This doesn’t mean that coins with no tie to real-world use or assets (like stablecoins) have any value. Even meme coins can grow in value (even exponentially) and generate profit. It’s just that they’re far more volatile, and it’s a lot harder for you to predict their future movements. 

The market demand is a bit easier to see but also less indicative. You see, market demand can swing one way or another fairly easily, and it’s one of the things that makes cryptos so volatile. Nonetheless, you want it to be on an upswing either way. 

4. Understanding why and how other people trade

In the previous section, we talked about market volatility, which is often closely tied to the way other people trade. This is why, if you’re serious about investing in crypto, you need to learn the way other people trade. What are some of the principles that affect their trades?

First, there’s the phenomenon known as FOMO. When something gets big enough, everyone will see it as a new Bitcoin. Now, the memory of Bitcoin is fresh in most people’s minds, and everyone daydreams about being able to go back in time, buy at $10, and sell at $60K.

The reality is that this was never going to happen. Even if you did buy crypto at $10 or $1, without prescience, you would have sold it as soon as it reached $100. In fact, if we’re completely honest, you would have probably sold it as soon as it reached $20 and be overjoyed with the 200% profit. 

It’s so important that you learn how to separate your wants and your feelings from the factual state of matters. You need to adopt trading strategies, manage your risks, and figure out how underlying assets can create volatile market conditions. 

5. Transparency and fair token distribution

In the evaluation of a promising cryptocurrency project, you need to pay special attention to the transparency of the process. Regular updates, detailed whitepaper, and public code repositories are the bare minimum that you should expect from the team behind the token. You also want to see the budget allocation (high financial transparency) and the fact that they’re compliant with all the crucial regulations. 

As far as pre-sales and ICOs go, there are so many ways to do this wrong and only one to do it right. The allocation breakdown needs to be distributed among founders and team, advisors, community and marketing, and development funds. Lastly, a significant portion needs to remain for a public sale. 

The vesting and lock-up periods need to be carefully considered, as well. Sure, team members need to get their share, but they can’t receive it all right away. They need to receive their tokens gradually, over the course of time, in order to align their interests with the long-term success of the project. 

One of the things that can have a positive effect on the growth of the coin in question is community incentives. Staking rewards, airdrops, bounties, and similar ideas can facilitate the expansion and popularization of the token. 

Recognizing early signs is not a guarantee, but it’s a great start

Ultimately, recognizing early signs doesn’t mean that you’ll be able to tell which cryptos are going up. At the same time, it gives you a better methodology to do a proper risk assessment. It helps you recognize the odds and manage your investments, as well as your crypto use. It immediately puts you ahead of the rest.