From Community to Catalyst: Teaching You to Seize Opportunities in Altcoin Surges!

Author: thedefinvestor

Translation: Baihua Blockchain

The bull market is back (at least for now).

But the question is, which altcoins are most likely to become the best performers?

In the 2021 bull market, almost every random coin surged. However, things have changed since then.

Millions of new altcoins have been launched, making it particularly important to choose the right coins to invest in to make money.

In this article, I want to share my cryptocurrency investment checklist and the key points I look for in projects.

1. Narrative and Market Fit with High Attention

Think about the best-performing tokens over the past 12 months.

Some examples include HYPE, VIRTUAL, and MeMe.

Do they all have strong fundamentals? Some coins like HYPE do, but the vast majority of the top performers listed below clearly do not.

Source: Coingecko 2024 Cryptocurrency Biggest Gains Article

But they have one thing in common: high social media attention and a group of enthusiastic believers in the community who continuously promote these coins on the X platform.

Moreover, most of the best-performing coins are associated with a strong narrative:

VIRTUAL: Surged in price during the rise of the artificial intelligence (AI) narrative.
MeMe: Rose significantly during the meme trend in Q4 2024 and early Q1 2025.

My advice is: find the current trending narratives and then look for tokens related to those narratives that have the most active X communities.

2. Growth Metrics

While attention (unfortunately) is far more important than fundamentals in a bull market, the good news is that some projects have both high attention and product-market fit (PMF).

If you can find projects that possess both, it could be a great investment opportunity, especially if their product metrics have recently shown explosive growth.

For example: The stablecoin protocol Ethena saw its total locked value (TVL) grow by 50% in the past 30 days. Meanwhile, it has also been discussed quite a bit on the X platform.

What was the result? Ethena's token $ENA rose by 154% in the past month.

By identifying projects with early signs of growth (such as TVL/revenue/fee increases) that also have decent attention on the X platform, you can make a lot of money.

The main tool I use to discover the fastest-growing projects is DeFiLlama.

3. Reasonable Token Economics

If you plan to buy tokens and hold them for just a few days, token economics (tokenomics) is not that important. But for medium to long-term investments, the situation is completely different.

For example, TIA has dropped over 90% in the past 17 months because the massive sell-off pressure from early investors after each token unlock caused the price to decline.

Therefore, it is crucial to review token economics before purchasing tokens.

When researching tokens, I focus on the following points:

Upcoming Token Unlocks

You can use Tokenomist to check the token economics and upcoming unlocks of many popular tokens.

Generally, I prefer the circulating supply to account for at least 30% of the total supply, with the annual token issuance (i.e., inflation rate) being no more than 20-35%.

Additionally, if there is a large-scale token unlock coming up (for example, an unlock equivalent to more than 20% of the current circulating supply), I would choose not to buy that token.

Token Utility

I always ask myself two questions:

Will the token I want to buy benefit from the success of the protocol?
Why would someone buy it at a higher price than I would?

Revenue-sharing mechanisms or token buybacks are what I consider the best token utilities.

That said, while strong token utility is a significant plus, it is not a must-have. I have seen many tokens with almost no utility still perform very well.

4. Community-Centric Philosophy

It is more important than ever for projects to be community-centric.

More and more people are no longer willing to invest in dull, personality-less brands—they want to support teams that genuinely care about the community.

This is also one of the reasons I believe tokens like HYPE and PENGU have performed so well recently.

Several signs that a crypto project is community-centric include:

• Conducting large-scale airdrops
• The team consistently under-promising and over-delivering
• Team-led marketing—being very active on the X platform and frequently interacting with the community
• A significant portion of token supply allocated to the community

These are the main factors I look for in tokens.

Another important factor that could drive token prices up is: upcoming significant catalysts that have not yet been priced in by the market.

This could include protocol upgrades, improvements in token economics, or the launch of new products, all of which could significantly increase the project's revenue.

Summary

That said, remember one thing: a good asset is still a bad investment if the price is not right.

Wait for the right opportunity, and do not act impulsively out of FOMO.

Article link: https://www.hellobtc.com/kp/du/08/5993.html

Source: https://www.thedefinvestor.com/p/what-to-look-for-in-altcoins

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