Uncovering the Most Resilient Altcoins Amidst the Crypto Market Downturn
Retail investors are losing confidence in new token launches that have high valuations but fail to execute airdrops properly, according to analyst Miles Deutscher. This has led to a shift in preference towards tokens that have better public market liquidity. Deutscher also noted that recent projects have had lower valuations in the public market compared to their private market valuations, indicating a potential end to the era of easy venture capital wins.
In light of these developments, how can investors identify potential projects? Deutscher suggests looking for projects that have a well-defined narrative and strong leadership in sectors such as real-world assets, artificial intelligence, or gaming. Having a compelling narrative is crucial for market positioning.
Additionally, projects should have a clear differentiator, whether it be innovative technology, unique features, or significant improvements over existing products. It is advisable to avoid investing in redundant projects, unless they offer substantial advancements. For instance, launching a tenth Layer Two project in a month may not be a wise investment unless it brings significant improvements to the table.
Investors should also consider tokens that offer additional utility beyond governance, such as buybacks, burns, and enticing staking rewards. These mechanisms can reduce the circulating supply of tokens and contribute to price appreciation, which in turn fosters community building.
Furthermore, a strong and engaged community often follows price appreciation. Building a community can be achieved by valuing community input, embracing crypto culture, and adopting a more memeable rather than overly corporate approach.
Deutscher advises investors to prefer tokens with low inflation. This can be characterized by a high percentage of the token supply already circulating or a low inflation rate during the trade window. Low inflation helps maintain price stability. For example, tokens like Ono, with a very low float and minimal short-term inflation, have demonstrated strong performance.
Ono serves as a successful example due to its extremely low circulating supply and minimal inflation, which have contributed to its recent price surge. Deutscher suggests that other projects could follow a similar model by avoiding large initial airdrops to control supply pressure.
Tags:
Altcoins
Crypto news
Cryptocurrency
Price Analysis