By Gabriel O. Rodriguez CruzJordan Chussler,

11 hours ago

Timing is everything when it comes to investing in crypto. That rings especially true for altcoins. Short for “alternative coins,” these are the cryptocurrencies that power much of the innovation in the industry today. Many altcoins are also subject to dramatic boom-and-bust cycles, which is the type of volatility that drives many new investors into the crypto scene.

The price of solana, for instance, was just 22 cents during its presale in 2020. It most recently peaked at over $293 in January 2025 — a more than 1,000x return on investment. Other projects like polygon, avalanche and even meme coins like dogecoin have also seen outsized returns since their releases.

Discovering high-potential altcoins before their prices skyrocket is the goal if you’re looking to get the most out of your crypto investment. The trick? Identifying strong fundamentals that can indicate whether you should dive in before the hype takes over. Those fundamentals include the underlying technology, the team backing the project, its whitepaper as well as its tokenomics, community and use cases.

But with thousands of tokens on the market, how do you separate the gems from the gimmicks? Read on to learn about how to discover high-potential altcoins before their next bull runs.

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Rather than chasing whichever crypto is currently trending on social media, you should focus on creating a research process that reliably leads you to promising altcoins.

One strategy is to closely follow developer activity. A highly engaged development team typically correlates with a greater chance of a project staying relevant in the long term. Look for projects with active file repositories, consistent updates and a responsive team, as those are good signs that work is ongoing and technical progress is being made.

It’s also smart to track where the money is going. Watching where institutions and venture firms allocate their capital can tip you off to projects with strong early backers — tools like Arkham Intelligence and Lookonchain can offer insights into this. You can also use platforms such as Token Terminal and DeFiLlama to watch a project’s revenue and total value locked (TVL).

Another great source for discovering early-access projects with strong potential are crypto launchpads. Sites like CoinList and Avalaunch vet token sales and feature promising projects, often in their earliest stages. They act as gatekeepers to an extent, curating projects before they become widely available.

You can also use Best Wallet for its integrated token launchpad, which provides early access to forthcoming crypto projects.

The best time to buy crypto is often during periods of disinterest, when prices move sideways, sentiment is negative and most retail investors have checked out. You can generally tell when this is happening based on the value of bitcoin (BTC).

When BTC begins to drop during a bull trend, it often signals the beginning of an altcoin rally as capital moves toward riskier assets. The Crypto Fear & Greed Index, a tool developed by CoinMarketCap, can help you identify when the market is in a fearful, potentially undervalued state that may offer attractive entry points.

These ups and downs go hand in hand with narrative shifts in the crypto sphere. Each market cycle tends to revolve around new themes for emerging coins and their uses, such as Layer 2 scaling solutions or the combination of AI and blockchain. Stay ahead by reading whitepapers, following project roadmaps and engaging with communities, and you might be able to spot a promising altcoin before it goes mainstream.

So you found an altcoin with strong potential and are considering investing in it. Now what?

Many crypto investors start buying on centralized exchanges (CEXs) like Coinbase, Kraken or Gemini — platforms which are known for their user-friendly interfaces, regulatory oversight and deep liquidity. But if you’re eyeing lower-cap tokens or newly launched projects, you might need to look elsewhere.

Decentralized exchanges (DEXs), such as Uniswap and PancakeSwap, often list tokens long before they reach the big-name CEXs. They also operate on-chain, which means activities and transactions are recorded and verified directly on the blockchain itself.

This might sound like the perfect gateway to early investing opportunities — but there’s a caveat: Because anyone can list a token on a DEX, you can’t rely on the platform thoroughly vetting each asset for its validity. You’ll need to verify the authenticity of an altcoin yourself to avoid falling for a scam or pump-and-dump scheme.

You might need to be more shrewd when it comes to choosing which digital assets to invest in, as well. Since the exchange is unlikely to carefully vet which cryptos to support on its platform, the level of risk with altcoins is inherently higher. Remember to diversify your holdings. Don’t go all-in on a single token, set realistic exit points and be wary of altcoin promises that seem too good to be true.

Even the most promising altcoin can turn into a costly mistake if you're not careful. Some of the most common mistakes you can make when investing in altcoins (especially if you’re new to the market) include the following:

1. Getting swept up in hype. Flashy marketing campaigns, influencer endorsements or viral social media buzz may quickly drum up excitement for new projects. But this can be used to mask weak fundamentals or unfinished technology.

2. Overcommitting on memes and trends. Meme coins like dogecoin, shiba inu and hawk tuah can occasionally deliver explosive returns. On the other hand, most don't have a sustainable use case or long-term vision and they’re often the first to collapse when sentiment shifts.

3. Overlooking transparency and liquidity. If a project isn’t upfront about who the team behind is or what they’re building, that’s a serious warning sign. And if a token has low trading volume or a shallow order book, you may struggle to back out of your investment without suffering significant slippage.

There is a wealth of resources in addition to the ones we named above. Here’s a quick-reference list of tools to help you research, track and manage your altcoin investments.

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