How to find crypto home runs (100x)
Hey Investor 👋🏻
Today I want to share with you 5 things you should know to find 100x tokens.
Let’s dive in!
It's pretty easy to make a 2x-5x on a relatively long holding period in crypto.
But what about a 100x?
Venture capital firms play in the most exciting part of the finance industry: they make big, speculative bets on small startups with the potential to become superstars.
If you are really looking for 100x tokens, you have to act like a VC.
Here are 5 things you should know to find 100x tokens:
1. Market Cap & Age
The market cap is a great easy indicator of how high a token can go.
You need to look for projects with less than $100M in market cap.
Moreover, in the crypto industry it's well known that newer projects tend to perform better, therefore focus on projects that have been listed in the last 3-12 months.
2. Narrative & Potential
Crypto (like VC) is a game of narratives.
But narratives keep changing and narrative trends are continuously evolving.
Make sure to allocate a significant percentage of your investments to the hottest narratives &/or look for category creators.
3. Due Diligence
Performing due diligence is following a set of guidelines to ensure the asset you are purchasing matches your investment criteria.
When you do due diligence, look for ways to say NO; essentially find the red flags that go against your investment criteria.
I look for tokens with an active community, a great token utility and backed by top investors.
You can use tools like Messari, Dune, Kaito, and Token Terminal to discover and analyze micro altcoins by yourself.
Alternatively, you can upgrade your subscription and access our watchlist with 70+ vetted high-quality micro altcoins.
4. Diversification
A study by AngelList covering 1,808 investments cemented the importance of the power law in VC.
The power law is a phenomenon that describes the distribution of returns in venture capital investing.
Put simply, the power law states that a small number of investments in a venture capital portfolio will generate the vast majority of returns.
Following this logic, a reasonable conclusion might be the following: to maximize your chances of hitting a home run, you need to make more bets.
5. Liquidity
Liquidity premium is the additional compensation used to encourage investments in assets that cannot be easily or quickly converted into cash at fair market value.
Unlike startups which are highly illiquid investments, crypto is an extremely liquid asset class and this can make you sell too fast.
Act like you couldn’t easily sell your tokens.
Because remember: what matters are the home runs (100x), not averages (5x).
That’s all for today!
Thanks for reading
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