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Identifying the Strongest Altcoins During the Crypto Market Crash
Analyst Miles Deutscher recently revealed that retail investors are losing confidence in launching new tokens with high valuations and poor airdrop execution, leading to a preference for purchasing tokens with better public market liquidity. The analyst said recent projects have had lower valuations in the public market compared to private market valuations, suggesting the era of easy VC wins may be coming to an end.
These days, how do you spot potential projects? The analyst responded by saying that you can look for projects with a well-defined narrative and leadership in their sectors, such as real world resources (RWA), artificial intelligence (AI) or game. A strong narrative is essential for market positioning.
Projects should have a clear differentiator. This could mean innovative technology, unique features, or significant improvements over existing products. Avoid investing in redundant projects, such as the tenth Layer Two launch in a month, unless they deliver substantial progress.
Look for tokens that offer additional utility beyond governance, such as buybacks, burns, and attractive staking rewards. These mechanisms can reduce circulating supply and increase price appreciation, which in turn fosters community building.
A strong, engaged community often follows price appreciation. Community building can also be driven by valuing community contributions, embracing crypto culture, and being memeable rather than overly corporate.
He advised people to prefer tokens with low inflation. This may mean that a high percentage of the token supply is already in circulation or that the inflation rate is low during the trading window. Low inflation helps maintain price stability. For example, tokens like Ono, with a very low float and minimal short-term inflation, have shown excellent performance.
Ondo is cited as a success story due to its extremely low circulating supply and minimal inflation, which has contributed to its recent price increase. He suggests other projects could adopt a similar model, avoiding large initial launches to control supply pressure.
Read also: Cryptocurrency Market Predictions: Top Winners and Losers of 2024