Cryptocurrencies have shown great development and adoption within different industries all around the world. But what does it mean to invest in cryptocurrency early? Essentially, this involves investing in cryptocurrencies that the mainstream has not yet adopted or even those that haven’t been released to the public yet.
Before you invest in any cryptocurrency, whether new or established, there are factors that you need to consider. Investing in crypto early has its benefits as the adoption of crypto advances and the technology gains traction. Investors looking to diversify their portfolios may consider exploring a presale crypto list, which can offer early access to promising cryptocurrency projects before they reach the broader market. It can be lucrative to buy in early; however, there are also factors for investors to be aware of.
Benefits of Investing in Crypto Early
If you’re wondering if investing in cryptocurrency early has benefits, the answer is it definitely can. Let’s explore some of the possible benefits below.
- You are eligible for high returns; as the value of your cryptocurrency increases, so does the value of your investment.
- Investing in crypto early means you get to buy in at a lower rate. Purchasing later on may incur higher costs once the crypto has become more widely adopted.
- Buying early allows you to learn more about the cryptocurrency markets and available new projects on the market.
Factors to Consider Before Investing In Crypto
There are several factors that investors should consider before deciding to invest in crypto projects, including:
- Market Volatility: Cryptocurrency markets are highly volatile, meaning the value of digital coins can increase or decrease significantly at any time. Investors should keep this in mind and try to use fluctuation in price to their advantage by purchasing when the price is low and selling when the price is high as to increase profitability.
- Regulatory Environment: There is a regulatory landscape surrounding cryptocurrencies, varying across jurisdictions and within different countries. Before investing, it’s wise to research regulations in your region and invest according to local laws.
- Research and Due Diligence: You must research the potential and credibility of the cryptocurrency you want to invest in before making any purchases. Look for things like community involvement and a good team backing the project, and always research the numbers before making a purchase.
- Risk Tolerance: Consider how risky your investment is and what your own risk tolerance is. Only invest the amount that you can afford to lose. While you may not lose anything, this is a safe approach that many savvy investors use.
- Professional Advice: You can seek guidance from professionals and financial advisors with expertise in cryptocurrency. This can support your investment decisions in new crypto projects.
- Diversification: It is best to spread your investments across different cryptocurrencies so that you can mitigate risks. Diversifying helps balance potential losses and gains due to different cryptocurrencies performing differently over time.
- Long-Term Perspective: While you can purchase crypto with short-term investments in mind, consider the long-term perspective and how your new crypto will perform over time.
- Stay Informed: Educate yourself continuously about how blockchain technology, cryptocurrency, and other related markets are developing to stay ahead of the latest changes and trends. You can join online communities, speak to experts, or follow reputable sources.
- Secure Storage: Once you make your purchase, you can ensure that your crypto is safe by using reputable digital wallet platforms with security measures in place. You can keep your investments secure by using strong passwords and enabling two-factor authentication.
Potential Challenges of Investing in Crypto
While there are countless rewards for investing in crypto, there are some potential challenges and drawbacks as well. We’ll explore a few of the potential pitfalls here:
- Limited Adoption: If you purchase a new crypto project, there is a chance that its adoption is limited, and it does not gain immense popularity. This may mean that your investment does not see the returns that you hoped for.
- Lack of Regulation: Since the crypto market is fairly new, there is a lack of regulation of cryptocurrencies within many jurisdictions, which investors should be aware of.
- Lack of Fundamental Analysis: Cryptocurrencies often lack traditional financial fundamentals and metrics that can be used for analysis. Early investors might find it challenging to be able to assess the potential and true value of the cryptocurrencies they want to invest in.
- Emotional Stress: Investors can experience emotional stress due to the uncertain and volatile cryptocurrencies while investing in new projects.
- Market Manipulation: Since the cryptocurrency industry lacks regulation, it can be susceptible to market manipulation. Insider trading, pump-and-dump schemes, and other manipulations. Investors should be aware of such schemes and try their best to avoid them.
Cryptocurrencies You Can Invest In
Some crypto projects are brand new, while others have been around for years. Crypto can be a solid investment if you take the time to research and understand how it works before buying in. Let’s explore some new and some not-so-new crypto projects that savvy investors can buy into now.
- Cardano (ADA): This is a blockchain platform that provides scalable and secure infrastructure. It was started by Charles Hoskinson in 2015. The platform has been designed to create dApps (decentralization applications). The key features of the Cardano platforms include the layered architecture, ADA cryptocurrency, proof-of-stake, peer-reviewed research, sustainability and governance, and interoperability. This platform has also been the focus of research-driven development, sustainability, and scalability.
- Polkadot (DOT): This is another open-source blockchain platform that has been designed to make interoperability between different blockchains easier. It was launched in 2020 and created by the Web3 Foundation. It also has a native cryptocurrency called the DOT, a Polkadot network. The key features of Polkadot include scalability, interoperability, cross-chain compatibility, security, and governance.
- Solana (Sol): This high-performance blockchain platform has been designed to give scalable, secure, and fast solutions for crypto projects and decentralized apps. The key features of the platform include scalability, overview, consensus mechanism, token, ecosystem and applications, performance and adoption, and partnerships and integrations.
- Polygon (MATIC): This cryptocurrency was known as Matic Network and is a layer 2 scaling solution for the Ethereum cryptocurrency. It was designed to address the scalability issues that Ethereum networks have by providing a building and connecting framework for multiple blockchains. This platform uses multiple technologies, including plasma chains, state channels, and sidechains, to help maintain cheaper and faster transactions and ensure high security. Offloading transactions from the Ethereum main to the layer 2 solution helps reduce gas fees and congestion of the Ethereum network. The key feature of the platform is that it is interoperable with Ethereum.
- Avalanche (AVAX): This decentralized cryptocurrency and platform launched in 2020 by Ava Labs has been designed to be a highly efficient ecosystem that is scalable for financial services and dApps. The platform’s key features include subnets and custom blockchains, consensus protocol, avalanche bridge, avalanche token, smart contracts, decentralized finance, and community and partnerships.
- Thorchain (RUNE): This is a decentralized liquidity protocol that has been built on a blockchain that allows users to swap assets across different blockchain networks. The platform has been designed to provide an efficient and seamless way for users to exchange cryptocurrencies. The platform’s key features include liquidity pools, cross-chain compatibility, incentive mechanisms, community-drive governance, and security and trustlessness.
- Dogecoin (DOGE): Dogecoin popped up in the digital world in December 2013. Two people, Billy Markus and Jackson Palmer, built it as a Bitcoin alternative. What made it stand out was its logo, a Shiba Inu dog from the “Doge” meme. Unlike Bitcoin, with its fixed supply of 21 million coins, Dogecoin has no cap on its coin count. Today, billions of them are making rounds in a peer-to-peer network. They’re on a blockchain that backstops secure, straightforward transactions. In 2021, business magnate Elon Musk spoke well of Dogecoin, and that got cryptos buzzing. Its value shot up, and more investors perked their ears. What began as a “meme” has droves of fervent fans now. They treasure the open spirit of Dogecoin. Yet, it’s key to remember, like all cryptos, Dogecoin’s worth can yo-yo because of market mood swings. Be savvy. Investigate before jumping into cryptos. Steady yourself for potential highs and low lows in your financial journey.
- Pikamoon: This cryptocurrency is known as $Pika or The Pikamoon token; it is an in-game currency that is used in the Pikaverse. Earning these tokens means that you get access to rare NFTs, buy unique items from the Pikamoon marketplace, and earn mouth-watering rewards. Within the Pikaverse, there are different kinds of NFTs. At present, there are 27,018 first-generation minted NFTs, and these will be gifted to token holders free of charge. To qualify for a free NFT mint, you need to have $PIKA tokens. In the metaverse, the NFTs are from 6 regions, and they come from 6 playing tiers. In the metaverse, you can create an empire from scratch and watch it gain value as it grows.