Altcoins
Identifying the Strongest Altcoins During the Crypto Market Crash
Analyst Miles Deutscher recently revealed that retail investors are losing confidence in new token launches with high valuations and poor execution of airdrops, leading them to prefer buying tokens with better liquidity in the public market. The analyst said recent projects have had lower valuations in the public market compared to their private market valuations, suggesting that the era of easy wins in venture capital may be coming to an end.
In these times, how can we identify potential projects? The analyst responded and said that one can look for projects with a well-defined narrative and leadership in their sectors, such as real world assets (RWA), artificial intelligence (AI) or game. A strong narrative is essential for market positioning.
Projects must have a clear differentiator. This could mean innovative technology, unique features, or significant improvements over existing products. Avoid investing in redundant projects, such as launching the tenth Layer Two in one month, unless they offer substantial advancements.
Look for tokens that offer additional utility beyond governance, such as buybacks, burns, and enticing staking rewards. These mechanisms can reduce circulating supply and increase price appreciation, which promotes community development.
A strong, engaged community often follows price appreciation. Community building can also be driven by valuing community contribution, embracing crypto culture, and being memorable rather than too corporate.
He advised people to prefer tokens with low inflation. This may mean that a high percentage of the token supply is already circulating or that the inflation rate is low during your 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 strong performance.
Ondo is cited as a success story due to its extremely low circulating supply and minimal inflation, which have contributed to the recent price surge. He suggests other projects could adopt a similar model, avoiding large initial airdrops to control supply pressure.
Read also: Crypto Market Predictions: Top Winners and Losers of 2024