We'd all love to have a secret superpower that helps us spot the next digital assets or blockchain projects with massive growth potential, representing a secure investment. There are so many play-to-earn crypto games or decentralized finance projects emerging every day that it's nearly impossible to decide if we've uncovered a gem or a trinket. After all, not all that glitters is gold, and the same applies to crypto projects.
The good news is that with proper research, you can filter through the never-ending expanse of blockchain projects and discover those with the potential for tremendous success.
Let's learn how to spot the next crypto unicorn worth your investment.
What is a crypto unicorn?
The term "unicorn" was first used in the business world to refer to a successful startup project with a market value of over $1 billion. It was not a random decision to use an animal as the word to convey this idea. It was intended to draw attention to how uncommon this phenomenon is. The crypto world borrowed this term from the stock market.
Blockchain technology and cryptocurrencies have not only changed the financial world as we know it, but they also altered the process of becoming a unicorn. The foundation of the process has stayed the same, but new technologies like non-fungible tokens, Bitcoin, and other crypto assets have brought some improvements.
Before the appearance of cryptocurrencies, the process of recruiting new investors to fund the project with their capital was lengthy. Blockchain-based cryptocurrency firms now have the opportunity to attain the same outcomes much more quickly, thanks to ICOs.
How to spot crypto startups with immense potential
Before investing in a specific crypto asset or token, check the following criteria to ensure your money goes into a project with low risk and high potential to become the next big thing:
Look at the ICO
Initial coin offerings (ICOs) have a track record of being among the most lucrative investment methods, both for developers and investors. Similarly, related fundraising systems like initial DEX (decentralized exchange) offerings (IDOs) and initial exchange offerings (IEOs) have led, in recent years, to some of the most successful projects.
For example, six of the top 10 cryptocurrencies by market capitalization were financed by initial coin offerings (ICOs) or other similar fundraising options. Furthermore, in the last few years, more than a dozen IDOs and half a dozen IEOs obtained a greater than 300x multiplier for investors.
Contrary to seed, private and pre-sale investments, ICOs and IDOs are available for casual investors too. Anyone can invest in crypto startups through an initial coin offering if they hold a specific token or win a raffle.
You can find different tools on the market for tracking ICOs. You may see which projects are scheduled to hold a public fundraising round, as well as information on the hosting platforms, participation dates, cost, hard cap, etc. This is a good starting point to learn about a crypto game, a new blockchain platform, or a coin you wish to add to your portfolio.
Check what successful investors are doing
Despite its youth, the cryptocurrency market has a robust investment and trading landscape. Investors come in all shapes and forms, from people with a lot of trading and overall crypto experience to absolute newbies.
As one might expect, the vast majority of knowledgeable cryptocurrency investors and traders are either concentrated in a crypto fund or in VCs ( venture capital firms). These funds and VCs use the most recent data, tools, and models to identify opportunities before their competitors. As such, they have consequently generated excellent returns in recent years. One example worth mentioning is Andreessen Horowitz which raised $2.2 billion for its third crypto fund and hired about 50 employees.
You can keep track of the assets that some of the more successful funds and "smart money" are purchasing and try to identify projects with great value. However, you should be aware that there is a risk of buying at a higher price, as there is always a delay between when they invest and when their followers find out about it.
In order to track how these experienced people trade, you can use tools, and platforms like Nansen that track inflows and withdrawals to well-known VC/fund wallets or check out their websites and annual reports.
Use tools to identify promising crypto assets
Being token-based, cryptocurrencies may be easily traced on-chain using several block explorers and APIs. Many of the tracking tools, analytics platforms, data aggregators, and other tools that have been developed as a result of this can be used to identify undervalued and possibly successful ventures.
A cryptocurrency must be able to increase in value over the long term and sustainably from a low one to a high one to be considered a unicorn. As a result, it is wise to research and employ technologies that can help you identify smaller-cap cryptocurrencies soon after they are released or after they have already shown some future potential.
Some of the platforms you can use in your quest for unicorns are Messari, CoinMarketCap, DEXTools, and LunarCrush.
Follow prolific developers
Let's face it. If you're looking for the best blockchain technologies, you need to have a sense of who's behind all the innovation. Just think about Satoshi Nakamoto. The anonymous developer (or developers) behind Bitcoin revolutionized the entire world, making possible the existence of all the digital assets we see today. The asset you're thinking of buying now and the companies and crypto startups you're wondering if they could become unicorns would not be here without Bitcoin.
A vital sign of future success lies in who is behind the app/ apps, the developers that create the crypto games you want to play, or the coin you're invested in buying.
A handful of superstar developers have appeared in the crypto sphere that either run their own companies or work for big names in the industry that pay heftily.
Andre Cronje is such an accomplished developer who recently grew a considerable fanbase. Cronje gained a reputation for releasing DeFi startups with a solid foundation and massive growth potential after creating or contributing to the creation of well-known platforms like Yearn Finance Keep3r, Sushi, Cover Protocol, and more.
You can discover some crypto unicorns if you follow prolific developers and see what companies they work for and the projects they're building.
Blockchain unicorns you might or might not know
Let's look at some of the big crypto unicorns that occupy the market now.
Bitmain is regarded as one of the leading manufacturers of Bitcoin mining computers. Despite its recent losses, Bitmain's value is at a $12 billion markup.
Jihan Wu and Micree Zhan were responsible for starting Bitmain. They began with technology that made it possible to link a TV to a computer screen. Bitmain is also well-known for its Antminer, Antpool, and BTC.com initiatives.
Coinbase is one of the most popular crypto exchanges in the United States. People can store cryptocurrency and buy and sell it on the platform. The primary goal of Coinbase, according to its official website, is to offer a means of changing fiat money into digital tokens. Coinbase is valued at $8 billion. It has a global turnover of $520 million and is accessible in more than 30 countries.
Copyright © Coinbase
Circle Internet Financial
Circle Internet Financial, or Circle, facilitates peer-to-peer payments. The USDC stablecoin can be used on this platform for commercial transactions. Developers propose this technology as a substitute for the conventional banking system. The Ireland-based company is worth $3 billion.
Ripple is another US-based startup that offers a digital asset designed for network-wide direct payments. There is no need for a middleman. This will make international payments simpler. Numerous businesses, including UniCredit, UBS, and Santander, have embraced Ripple technology. It is worth $5 billion.
Copyright © Ripple
Canaan manufactures mining equipment like blockchain servers and ASIC processors. In 2013, Canaan was the first to create an ASIC mining device. It is currently regarded as one of the leaders in this industry. Canaan now produces a wide variety of technology. Its current value is $3 billion, and the company is based in China.
Block.one is a tech business that offers blockchain solutions to all kinds of organizations and also creates the EOS cryptocurrency. The platform can be used to make decentralized apps.
The business is constantly evolving, enabling it to offer consumers improved solutions. It's part of our list of unicorns due to its $2 billion value.
Dfinity is a computer business headquartered in Switzerland. It offers decentralized variations of Uber, Facebook, and eBay. Dfinity's primary goal is to build a decentralized internet computer, which they call "a cloud 3.0." Data shows this company is also worth $2 billion.
We've all heard about Binance, the super popular cryptocurrency exchange. Binance is not a decentralized exchange, as it acts as an intermediary between a buyer and a seller and makes money through commissions and transaction fees.
Binance also offers a cryptocurrency trading platform that provides security and smooth transactions. It collaborates with other companies to encourage the use of cryptocurrency payments all across the world.
Worth $2 billion, Binance is regarded as the largest cryptocurrency trading service in the world in terms of value. Its strategy is to continue to offer original solutions, like a new Chinese crypto trading service.
Copyright © Binance
Ebang manufactures mining equipment. Along with various pieces of equipment, they also give technical assistance and life-simplifying solutions for miners. Ebang is regarded as one of the most important Bitcoin mining equipment manufacturers. No wonder it is valued at $1.5 billion.
A full-service blockchain technology provider, Bitfury was established in the Netherlands and began operations in 2011. It focuses on creating hardware and software for businesses, organizations, and governments. Their fundamental argument is that Bitcoin transactions and blockchain technology may make the world a safer place. The company is worth $1 billion.
Liquid Global is a Japanese exchange platform whose primary goal is to generate liquidity for the crypto market. Liquid Global offers the option of exchanging cryptocurrency for fiat, which is a very popular choice. It first surfaced in 2018 after Quoine and Qryptos merged. It has a $1 billion value.
Copyright © Liquid Global
That's it, folks! We've looked at the existing crypto unicorns and made a game plan you should follow when looking for crypto startups worth investing in. Whether talking about a new crypto game everyone wants to play, the latest token, or a decentralized app, remember that there's no investment completely void of risks. If you decide to back a project with your own capital, research it extensively beforehand to avoid any red flags and security or financial issues.
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