In this post, I shared 6 ways to spot a gem coin.
A gem is a low-cap coin that has immense potential or is extremely undervalued.
Initially, a gem coin is not popular until it gradually attracts investors and explodes.
Did you know? The top cryptocurrencies of today were once gems.
For example, when Bitcoin was first introduced, only a few people recognized it as a gem and they were vastly rewarded in the long run.
So, how do you spot a gem coin to enjoy huge rewards later?
Let’s quickly get into it!
6 Legit Ways To Spot A Gem Coin
- Low Price
- Good Tokenomics
- Market Trends
- Credible Team
- Community Support
- New DEX listing
You may click on any option above to read its details immediately.
1. Low Price
One major attribute of a gem coin is its low price, usually less than a cent.
The low price attracts people to invest with the hope of making massive returns in the future.
Think of it this way, wouldn’t you buy $100 worth of a new coin and own many units instead of spending the same amount on BTC and receiving only a fraction?
I’m sure you would and many crypto investors will do likewise.
This is because the new coin will take a shorter time to 10X or 100X.
When it happens, your holdings will skyrocket and your $100 may turn into $1000 or more.
But a low price is not enough, the market cap of the coin matters too.
Now, the market cap is a product of the coin’s price and its circulating supply.
Opt for a coin whose market cap is realistic when it does 10X or 100X.
For example, the ZIL coin is currently (19/05/2022) priced at $0.04699 and about 12,801,328,532 coins are in circulation.
Let’s say this coin does 10X now, it means the market cap will be $601,534,428. Which is realistic, right?
But imagine that the coin’s circulating supply is in quadrillions.
The market will now be in quintillion or sextillion dollars when it does 10X. Oops!
That’s super unrealistic. So, don’t get excited about the low price of the coin, check the market cap too.
2. Good Tokenomics
Another way to spot a gem coin is to confirm that it has good tokenomics.
Tokenomics covers the supply, distribution, and use cases of a token.
If the coin founders hold a large portion of it, or initial investors bought coins at a huge discount, that’s bad.
It’s just a matter of time before they dump the coins and redeem their initial investment with profit.
What makes for good tokens includes:
- Fair distribution of coins
- Community members can vote for changes
- No bugs in the smart contract
- The number of wallets holding the coin is on a consistent increase
- And no single wallet holds too much of the coin
- Deploys scarcity mechanisms like capped supply, deflationary model or inflationary rate that reduces annually, burning, buybacks, halving block rewards, etc.
- A satisfactory utility like earning opportunities, governance, store of value, means of exchange, etc.
A gem coin will check 90% of the criteria above.
*If you cannot read the smart contract to find bugs, look for proof that it has been audited by top firms like Certik and Hacken.
*You will find the wallets holding the coin on blockchain explorers like Etherscan and BSCscan.
3. Market Trends
Closely related to good tokenomics, a gem coin will follow market trends.
For example, when the Ethereum blockchain was in the news for poor scalability, developers started launching projects on more scalable blockchains like BSC and Polygon.
Such projects enjoyed a valuation rise as these blockchains gained adoption.
Another example is how new projects and even old projects modified to fit into the metaverse during the 2021 trend.
So, a gem coin will fall in line with the recent market trend.
4. Credible Team
The founding team is another major factor that will determine if you’ve found a gem coin or not.
A team that comprises experts in their respective fields is a good start.
Also, they must have successfully run similar projects in the past.
That’s how you know that they have what it takes to scale the new project.
Additionally, they should be active on social media, especially on LinkedIn, Twitter, and Telegram.
It shows that they are willing to fund and push the marketing of the project.
Also, their previous posts and tweets will show how well they have been communicating on these platforms.
Furthermore, look for the Crypto venture capital firms investing in the project, have they sponsored successful projects in the past?
If yes, then it’s a good sign.
Moreover, the roadmap of the project must be actualizable and the coin must have a need it is filling in the crypto space.
Again, be wary of high promises. When investors are promised 10% daily returns, that’s a pump/dump, not a gem coin.
5. Community Support
Here, we’re looking at the caliber of people talking about the coin.
Follow crypto experts and influencers who, in the past, talked about coins that mooned before they did. Most of them are active on Twitter and Reddit.
Look out for the next coins they will announce, do your research on them, and invest if you’re convinced.
Also, join groups of traders/investors on Telegram and Discord like Ctmastery.
They usually discuss new coins and their potential. You might get a clue on the next gem coin from these groups.
Gratefully, you may even stumble on coins yet to launch and participate in presales.
Another place you can discover a gem coin is on coin listing websites like Coinmarketcap and CoinGecko.
They provide information on the market cap, trading volume, and other relevant information about existing coins.
When you visit these sites, don’t stop at the first pages since there’s usually a hierarchy of coins.
Scroll to the fourth or fifth pages. Remember that you’re looking for coins that are worth less than a dollar and have a moderate circulating supply.
A market cap between $500,000 and $10 million is a good sign.
Also, confirm that the trading volume has been on a consistent increase.
Find a promising coin? Then research the project and know if it is worth your money.
6. New DEX Listing
Another way to spot a gem coin is by checking for new listings on Decentralized Exchanges (DEX).
It is less cumbersome to list new coins on DEX as compared to listing them on top exchanges like Binance.
Uniswap, SushiSwap, and PancakeSwap are popular DEXs where new coins are listed regularly.
When you discover new coins on these platforms, you can then research them to know whether you’ll invest or not.
Also, websites like ListingSpy and ICO Listing Online provide information on new listings on different DEXs.
You may want to check them out.
Spotting a gem coin is not something that you do in a hurry.
And no, the coin must not meet all the criteria above, a 4/6 score is good enough.
I must also mention that investing in a gem coin is risky because there is no 100% chance that the coin will explode.
As you know, every investment choice in crypto is a leap of faith.
So, you want to do diligent research before taking that leap.
And when you are convinced about a coin remember that early investors are the big gainers.
If everybody is already talking about it, it is probably too late to invest.
Nevertheless, with the recent crypto crash, now is a good time to look for gem coins.
Prices are more reasonable so, it’s wise to invest in coins that will likely go to the moon once the market takes off again.
But don’t take my word for it, after all, I’m no financial adviser.
Let’s draw the drapes here. I hope you enjoyed reading this post. Please share it with your friends. Thank you!
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