There is a very certain division, when it comes to investment assets. However, crypto is always different to traditional investments, so we have to take a quite unique approach in identifying which coin has perspectives and which does not. 🤨
Token categories
All the crypto tokens can be conditionally divided into three tiers. The main criteria is usually the market capitalisation, but don’t let that trick you. 😏
First tier
The first tier consists of the top-10 coins in terms of market cap, which have been around for a while now and have proven their worth over time. Those are Bitcoin, Ethereum, BNB, XRP, Cardano, Solana, Dogecoin and a few stablecoins. 💵
Seems pretty straight forward, however…
Stablecoins are more of a token, than a coin; Solana is ridiculously unstable; Dogecoin is a meme coin, which makes it even more unstable than Solana (thank you, Musk); Cardano is a net that no one really cares about and the 32nd place in terms of TVL proves that; Ripple has a very narrow speciality, since it is banking oriented and isn’t really that decentralized. 🤷♀️
So, apparently, the only cryptocurrency that really deserve to be in the first tier are Bitcoin, Ethereum and BNB - how surprising. 🙃
Second tier
Consists of the products that have already been launched and that are successfully working, but are lacking market cap and loyalty to be placed into the first tier. ✋
It also includes the coins that used to lead the overall rating in 2017-2018 and are still keeping up with the market. 🤔
Coins like Avalanche, Polkadot, Polygon, Tron, Atom, Cardano, Litecoin, Bitcoin Cash are part of the second tier.
Third tier
The one we are looking at today. Coins and tokens of new projects that have not yet shown themselves in full, as well as old platforms that have lost their relevance and a major share of their capitalization. Third tier is all about new altcoins or shitcoins, if that sounds better to you. 💩
What is a shitcoin?
New cryptocurrencies with low value and undefined purpose are usually referred to as shitcoins.
How does one decide whether a shitcoin can be profitable?
The first criteria we go through to make sure that a shitcoin is actually an altcoin is identifying the utility and innovation that it offers. If the project is a “dummy” (for example, another Ethereum clone), then everyone will probably forget about it sooner, then anyone will find out such a coin exists. 😅
We will check the data on who the founders and the team are to see if they have already been a part of any successful project to ensure we are dealing with professionals. The team is nothing without financing, so checking the funds, supporting that coin would make for some crucial information. 🙌
Next step is tokenomics and emission. The white paper has to state a clear cycle that a coin goes through before being burned (by a cycle we mean something longer than a couple months). Stay aware of how the tokens will be distributed after emission, so that most of them don’t end up in a single wallet, thus completely ruining the whole model. 😐
And finally, we should never forget that the crypto industry nowadays is all about selling something to you. Spend half an hour on investigating the marketing strategies and partners of a project. No matter whether the utility and tech behind a coin is absolutely immaculate, no one will invest unless some good marketing is done. 😎
Another advice we can give is monitoring the motion of whales. Keep in mind that their main target is to trick others, so you shall always stay a little suspicious of anything they say or do. 🐋
We are seeing more and more people join our website everyday. Therefore, the question about choosing a profitable shitcoin is quite common among our community. We hope that this article answers it all.
Stay tuned 📻
