Despite a surprisingly strong start to 2023, the cryptocurrency market still has far to go before returning to its all-time highs set in 2021. Fear of a recession is still lingering, and many investors believe that a crypto bull run may not come until late 2023 – at the earliest.
What most investors fail to realize is that cryptocurrency bear markets provide the best opportunities to create life-changing wealth. They can provide a lucrative opportunity to scoop up undervalued projects at dirt-cheap prices.
The following discussion will explore the defining characteristics of high-growth cryptocurrencies and examine a few projects that could skyrocket in value by the time the bull market returns.
What Makes a Cryptocurrency Explode?
Before you can find the next crypto to explode you need to break down what is making these coins blow up so much. A cryptocurrency’s potential to explode is influenced by several key elements. These elements include innovation, differentiation, market capitalization, team, network connections and hype.
Together, these key factors play a critical role in determining the growth potential of a cryptocurrency. The following sections will delve deeper into each of these elements to better understand what makes a cryptocurrency explode.
Innovation and Differentiation
Innovation and differentiation, which go hand in hand, are the two most important elements of explosive cryptocurrency projects –– and the reasons are self-explanatory.
If an innovative project manages to differentiate itself from competitors through superior technology or a unique solution to a problem, it will be able to attract a greater number of investors and users. More investors mean more investment capital, resulting in increased buying pressure and higher prices.
Team and Network Connections
A common trend when investing in a young crypto project is the lack of a fully-operational product or service. You’re ultimately betting on the team behind the project, their vision and the connections they possess.
All high-growth companies boast robust teams with a strong track record and experience developing products within the Web 3 industry. Network connections, such as partnerships with other organizations or companies, can also increase credibility and exposure, which can drive growth.
Market Capitalization
Market capitalization is an important growth metric to consider because it provides information about the overall size and value of the asset.
On one hand, a higher market capitalization can indicate a large number of investors have already placed trust in the project, providing greater stability and lower risk at the cost of less growth potential. On the other hand, a low market capitalization can indicate a lack of interest or confidence in the project, providing greater room for upside growth at the cost of increased risk and volatility.
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5 Cryptocurrencies to Watch in 2023
The following section will take a closer look at five cryptocurrencies, all of which have different risk profiles and use cases, that are worth keeping an eye on in 2023.
Avalanche (AVAX)
The blockchain trilemma is the most notorious challenge in crypto. It describes the struggle of a blockchain network to maximize security, scalability and decentralization at the same time.
Throughout crypto’s short history, most projects have come short in solving this problem. Ethereum — the second largest cryptocurrency in the world — offers a solid attempt; however, it struggles with a severe lack of scalability. In fact, network congestion on Ethereum is a growing concern, which is why many investors are pointing to Avalanche as a promising alternative.
What is Avalanche?
Avalanche (a top 15 crypto by market cap) is an innovative Layer 1 blockchain that aims to overcome the blockchain dilemma through technological advancements that improve scalability without compromising speed or decentralization. Like Ethereum, you can imagine Avalanche as the underlying infrastructure of a blockchain network, serving as the foundation on which other protocols are built.
Avalanche provides a solution through a combination of three interoperable blockchains — the Exchange Chain (X-Chain), Contract Chain (C-Chain) and Platform Chain (P-Chain). Each of these chains is referred to as a subnet with varying properties (such as security, scalability or decentralization) depending on their use case.
By taking on different roles, Avalanche provides a better solution to the blockchain trilemma when compared to running all processes on just one blockchain. Each of the three main chains offers varying degrees of security, scalability and decentralization, creating a flexible solution to meet different needs simultaneously.
Avalanche has been making waves lately, partnering with big names such as Amazon.com and its subsidiary AWS. With a unique value proposition, driven team and well-defined vision, Avalanche presents a conservative yet lucrative opportunity for investors to consider.
Aptos (APT)
Aptos, a visionary crypto endeavor nurtured by venture capitalists, has been crafted by ex-engineers of Meta Platforms Inc. (NASDAQ: META) to disrupt the cryptocurrency industry. Though still in the early stages, the proposed features of Aptos have already sent ripples through the crypto industry, rewarding early birds with substantial wealth. Like Avalanche, Aptos aims to compete against Ethereum by supporting a scalable ecosystem that doesn’t sacrifice reliability or safety. If you asked everyone in the crypto community which crypto is most likely to explode in 2023, Aptos would probably be the number 1 response due to the incredible amount of hype it has built.
What is Aptos?
Aptos, a Layer 1 blockchain, supports an evolutionary smart contract language named Move, masterminded by the same experts who honed their skills on the Diem (formerly Facebook) blockchain.
Move offers several advantages to Solidity, the native programming language of Ethereum, including increasing modification of private keys, modular design and verification. The Aptos team claims that the network has the potential to process over 150,000 transactions per second (TPS) — a number far greater than Ethereum's proposed theoretical throughput of 100,000 TPS.
Despite being a newcomer to the space, Aptos has quickly made a name for itself by securing $350 million in funding, successfully launching its mainnet and handling millions of transactions across a bustling network. Notable partners include the prestigious venture capital behemoth Andreessen Horowitz (a16z) and the recent addition of Binance Labs.
If Aptos manages to execute future milestones down the road, increasing transaction speed and the size of the ecosystem as promised, there is no telling how explosive Aptos’ growth could be.
MetisDAO (METIS)
Despite reigning as the premier choice for building decentralized applications (dApps), Ethereum is painfully slow. Gas fees skyrocket when demand on the network spikes, and it's expensive to store data on Ethereum.
These serious issues must be addressed if Ethereum is to be adopted by the mainstream. Layer 2 solutions –– projects that are designed to increase the speed and efficiency of specific blockchains –– solve these issues to a certain extent.
What is MetisDAO?
MetisDAO is one of the most promising Ethereum Layer 2 solutions that aims to solve Ethereum’s lack of scalability –– allowing for cheaper and faster transactions while leveraging the security of the Ethereum network. It achieves this goal through Optimistic Rollups, a type of Layer 2 construction built on top of Ethereum that allows smart contracts to be executed while being secured by Ethereum.
Unlike most Layer 2 solutions, MetisDAO has the unique capability of making dApps development on its platform easy and straightforward, especially for blockchain novices.
By using Metis Polis, a middleware developed by the team to manage and interact with smart contracts, Metis aims to allow developers to integrate dApps into Metis Layer 2 with no blockchain coding. Moreover, the team behind Metis is multifaceted, featuring Natalia Ameline, the mother of Vitalik Buterin (Ethereum’s co-founder).
With arguably undervalued fundamentals, strong competitive advantages and a market capitalization rank that exceeds the top 150, METIS could be a lucrative crypto gem to add to your portfolio before it reaches the masses. METIS is available for trading on a vareity of the best crypto exchanges, including OKX and Gemini.
Honorable Mention — Chainge Finance (CHNGE)
Because of its small market capitalization of $30 million, Chainge Finance did not make the previous list; however, it’s still worth examining. As the smallest project by market cap –– by a long shot –– mentioned in this article, Chainge Finance has extraordinary growth potential.
What is Chainge Finance?
Chainge Finance is a cross-chain decentralized exchange (DEX) aggregator. What does this mean?
Chainge Finance allows users to trade assets at the best prices across different blockchains all in the same place. It solves the lack of interoperability of different blockchain networks and enables users to navigate across blockchains effortlessly.
In addition to its unique value proposition, several reasons help Chainge Finance stand out. It is the market leader –– boasting the most liquidity across all cross-chain aggregator DEXs on the market. Chainge falls into the rare category of a fairly launched crypto project. Unlike most projects, Change has no tokens allocated to the team and 25% of profits are used in token buybacks. The founder of Chainge Finance, DJ Qian, is a top-notch developer in the sector –– having founded VeChain, a top 40 crypto by market capitalization. Unfortunately, CHNGE isn't available on many major exchanges yet but you can pick it up at Gate.io.
Where to Buy Crypto
Picking the best crypto exchange for you is more important now than ever and it's not always an easy task. No crypto exchange supports all of the tokens listed above but Binance (or Binance.US for U.S. investors), OKX, Uphold, Crypto.com and Kucoin all support a ton of different cryptocurrencies. All of these exchanges are some of the best and most popular in use today.
- Best For:A Fast Trading ExperienceVIEW PROS & CONS:securely through Uphold Crypto's website
Terms Apply. Cryptoassets are highly volatile. Your capital is at risk.
How to Store Crypto Safely
Even if you buy the next crypto to explode, it won't make any difference if you don't secure your tokens. Generally, it's advised to keep cryptocurrencies in personal wallets (software or hardware). Hardware wallets are considered the safest option as they store your private keys offline, providing an extra layer of security from cyberattacks. Conversely, software wallets are connected to the internet, and therefore offer a convenient way to store and manage crypto assets.
As a rule of thumb, hardware wallets are recommended for long-term storage, and software wallets are recommended for short-term storage.
Best Software Wallet: Trust Wallet
Trust Wallet is a top-notch software wallet for storing, exchanging and managing cryptocurrencies and non-fungible tokens (NFTs). Owned by Binance since 2018, it is trusted by millions of users globally. With access to over 250,000 crypto assets across 65 blockchains (including all tokens of certain token standards like BEP-20 on BSC), Trust Wallet is a versatile choice for investors of all levels.
Best Hardware Wallet: Tangem
Tangem Wallet is an innovative software wallet that eliminates the need for a seed phrase through a physical card, making it easier and safer to use traditional crypto wallets. With support for over 2,000 cryptocurrencies and compatibility with 100+ dApps, Tangem is an excellent choice. The physical card, which stores the private keys to your cryptocurrency, is secure and reliable.
What Investors Should Consider for Their Next Crypto Investment
It is important to consider the level of innovation, quality of the team and market capitalization of a cryptocurrency project when determining its growth potential. These projects all have promising futures –– equipped with sturdy value propositions, experienced teams and innovative technology.
The cryptocurrency sector is risky because of its speculative nature and uncertain regulatory future. Prudent investors will only invest money they are willing to lose and will complete due diligence before investing.
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