There are many different approaches to investing in cryptocurrency. Some investors prefer to park their money in established crypto assets like Bitcoin and Ethereum and simply hold for a long period of time. Meanwhile, others are looking to make big gains in a relatively short period of time and make bets on smaller projects.
In this article, we will be focusing on the riskier side of crypto investing, and highlight the most important tips for finding the next 100x crypto.
How to find the next 100x crypto?
Before we begin, we should make it clear finding a 100x crypto is very difficult and your chances of success will be extremely slim even if you do thorough research before investing.
A cryptocurrency that has potential to increase in price by 100x also has the potential to go to (practically) zero. This is because the only cryptocurrencies that could feasibly see a 100x increase in price are projects that are in their early stages and don’t have an established track record or long-term demand.
From this, it follows that you shouldn’t invest large amounts into “moonshot” projects that could have 100x potential. As always, carefully consider your financial situation before making any investments and don’t invest more than you are willing to lose.
Now, let’s take a closer look at the best things you can do if you are on the lookout for the next 100x crypto.
Consider the cryptocurrency's market cap
When searching for a crypto with 100x potential, you first need to limit the pool of cryptocurrencies you’re considering based on market capitalization. If a cryptocurrency already has a large market cap, the chances of it displaying a 100x price increase are extremely low.
To illustrate this point, we should mention that the 100th largest cryptocurrency by market cap currently has a market cap of $473 million. If that cryptocurrency increased in price by 100x, it would have a market capitalization of $47.3 billion, which would make it the sixth largest cryptocurrency on the market. While this certainly wouldn’t be unprecedented, such moves are a rare sight in the cryptocurrency market today.
On CoinCodex, you can use the “Customize” feature to quickly find cryptocurrencies in a specified market cap range. Here’s what it looks like if you want to only display cryptocurrencies with a market cap between $10 million and $50 million.
If you want to find coins that could conceivably see a 100x increase in price, you probably want to limit your search to crypto assets with a market capitalization of $50 million or below. During crypto bull markets, quite a few projects can reach a market cap of $5 billion (which is a 100x increase from $50 million).
If we use the historical crypto price data on CoinCodex to see the snapshot of the cryptocurrency market in November 2021, we can see that 40 cryptocurrencies had a market cap of $5 billion or above on November 5, 2021.
At the moment, when conditions in the cryptocurrency market (and especially the altcoin market) are more bearish, only 18 crypto assets have a market cap of at least $5 billion. If we disregard stablecoins and wrapped tokens, this number drops down to 14.
Analyze the cryptocurrency's tokenomics
After finding a cryptocurrency you believe could potentially be the next 100x crypto, you want to carefully consider its tokenomics.
Try to avoid cryptocurrencies that have large allocations to insiders (team, investors, advisors, treasury), as this can be a large source of selling pressure that prevents a cryptocurrency from making significant gains.
The same applies to cryptocurrencies that only have a small percentage of their total supply in circulation. As new supply enters circulation, the value of existing coins tends to be diluted, which works against existing holders.
The project you’re considering should have a detailed explanation of the planned allocation of the token’s supply in their whitepaper or other similar document. You can also use tools such as Etherscan to view how a token’s supply is actually distributed. Here is the distribution of Uniswap tokens as an example.
A blockchain explorer such as Etherscan will also allow you to verify how many holders the token has and how many transactions it’s actually facilitated. This will help you avoid tokens that aren’t seeing any real use.
To sum it up, here are a few tips on what to look out for when examining a crypto project’s tokenomics:
Avoid tokens that have large allocations for insiders. This includes team members, venture capital investors, advisors and the project treasury.
Avoid tokens that only have a small percentage of their total supply in circulation.
Avoid tokens that have a very small number of on-chain holders and very low transaction activity.
Avoid tokens where a small number of whales controls a large portion of the supply.
Use crypto whale trackers
Although you want to stay away from tokens where the supply is controlled by a handful of whales, following “smart money” crypto investors can be very beneficial when it comes to finding promising cryptocurrencies early.
You can use crypto whale tracker tools to monitor the on-chain moves made by users that hold substantial amounts of crypto. Although this is certainly not a sure-fire way to find the next 100x crypto, it’s an important consideration.
If you want to get insights about what whales are doing on the blockchain, we recommend you use the following tools:
ArbitrageScanner
Arkham Intelligence
DexCheck
DeBank
Monitor the crypto community on social media
If you’re looking to discover meme coins early, being active on social media platforms like Twitter can be highly beneficial. There are also numerous crypto Telegram groups and Discord servers for crypto investors where valuable insights can often be found.
A helpful Twitter account to follow is Lookonchain, which tracks on-chain transactions made by “smart money” addresses. You can keep an eye on these addresses by adding them to a list and monitoring their activity using tools like DeBank or other DeFi portfolio trackers.
Engaging with the crypto community allows you to spot which cryptocurrencies are gaining popularity and attracting new users. However, it’s crucial to differentiate between organic activity and inorganic activity on social media.
Many projects attempt to artificially inflate their online presence using bots that boost engagement metrics, such as likes and comments. Additionally, some projects may pay influencers to promote their cryptocurrency to their followers.
While there’s no foolproof method to distinguish between organic and inorganic content on social media, spending time in the crypto community will improve your ability to identify genuinely exciting projects versus those being artificially propped up.
For instance, if a project’s tweets have an unusually high number of likes, comments, and retweets, but the comments are mostly repetitive or low-effort, it could indicate the use of bots to create a false sense of engagement.
Use DEX screener tools
These days, the most volatile price action is happening on decentralized cryptocurrency exchanges, where you can trade tokens that aren’t yet readily available on major crypto exchanges such as Binance, Coinbase or Kraken.
Being aware of what’s happening on decentralized exchanges and other aspects of decentralized finance can be an important edge if you’re after big gains in the crypto markets. You can use a variety of DEX screener tools to better understand what’s happening in DeFi and which cryptocurrencies are gaining in popularity.
DEX screener tools will allow you to see the newest trading pairs on decentralized exchanges, the biggest gainers and losers in a specified time period, pairs with the highest trading volume and other key DeFi analytics. Some of the best DEX screener tools on the market include:
DEX Screener
Defined.fi
Dextools
DexGuru
The bottom line
Chasing after 100x gains in the cryptocurrency markets is very risky and it’s much more likely that you’ll lose money than make money in the process. However, you can increase your chances of success if you know what to look for.
If you’re also interested in more established cryptocurrencies, make sure to check out our list highlighting the best crypto to buy right now.
