If you have been within the cryptocurrency space for any period of time, you may have heard of the term 'Low-Cap Gem' thrown around. Low-cap gems, also sometimes referred to as 'small-cap gems' are the most valuable crypto assets when it comes to making life-changing wealth in crypto.
Low Cap Gems are low market capitalization cryptocurrencies with promising growth potential with expectations of 100x-1,000x (or more) ROI (Return On Investment).
The Significance of Market Capitalization
The main reason low market capitalization is highly sought after is the growth potential these low market cap cryptos can offer.
For example, the growth potential of any of the top 10 cryptocurrencies (ranked by market capitalization) may be at most 2x-10x. While some of these 'blue-chip' cryptos may offer the most price stability (among cryptocurrencies) and offer decent long-term returns, they aren't going to generate life-changing wealth.
It is these cryptocurrencies with very low market capitalization and strong adoption potential that have the potential for 100x-1,000x (or more) return on investment. In the last bull run, there have been many such examples. One of the more popular examples is Shiba Inu (SHIB) which had a return on investment of over 800,000%. This is the type of investment that offers life-changing wealth.
If you are looking for cryptocurrencies with maximum growth potential, you will be wanting to look at high-quality cryptocurrency projects with strong adoption potential and low market capitalization.
To understand what low-market capitalization is, it's necessary to understand there are many different market capitalization levels within the crypto market.
The cryptocurrency market covers much more breadth than the traditional markets, especially at lower capitalization levels. We have identified 8 different market capitalization levels within the crypto market.
How to Find Low Cap Gems?
Low market capitalization cryptocurrencies can easily be found using one of the many cryptocurrency listing sites, such as CoinMarketCap or CoinGecko.
These and many other cryptocurrency listing sites offer the user the ability to search and sort cryptocurrencies by their market capitalization and sector/niche.
Ten years ago, finding low-cap gems was relatively easy as there were only a few hundred cryptocurrencies actively traded.
However, today there are +10,000 actively traded cryptocurrencies in more than 50 different categories and sectors under which these cryptocurrencies fall.
Steps to finding the next low-cap gem:
To find these gems, you can use a combination of the following methods:
Step 1: Identify High Growth Sectors:
With so many different active cryptocurrencies, it's necessary to reduce the scope of projects you are looking into. To do this, identify high-growth sectors within the market.
Typically, each year there are new and different sectors that are experiencing high growth.
High Growth Sectors in 2022:
Our Prediction of High Growth Sectors in 2023:
These are the cryptocurrency sectors we focus on.
Step 2: Perform Research and Analysis:
Once you have identified the sector or niche to focus on, it's time to do the research. This is where you look for cryptocurrencies that have a strong team, solid use case, clear roadmap and development.
One of the key features when looking for a low-cap gem is the community. More often than not, it's the community that is instrumental in propelling the price of the project.
Knowing how to assess and evaluate a cryptocurrency is a key element when it comes to finding crypto gems. We have put together a guide here on how to evaluate a cryptocurrency.
Step 3: Technical Analysis:
At this stage, you should have a handful of cryptocurrencies that have the potential for a low-cap gem. To be able to maximize your profits, as the saying goes, buy low and sell high. Knowing when to buy into the market and when to sell are two of the most aspects of investing in cryptocurrency. Check out our Crypto Chart Patterns (and the accompanying PDF) to help you in this stage of the process.
Understanding moving averages, relative strength index (RSI) and Fibonacci retracements to identify potential buying and selling points for a given crypto will also come in helpful.
Step 4: Watch the Overall Crypto Market:
The cryptocurrency market is highly correlated. That is, when Bitcoin goes up, so does the entire market. When Bitcoin dips, so does the rest of the market.
On average there is a bull market within the crypto market every four years (this has been correlated to the Bitcoin halving event). It is very important to know which market phase the crypto market is currently in, as this will allow you to correctly assess when whether the market is bullish, bearish and ultimately to buy and when to sell.
The greatest gains you will see within the crypto market are within the lower market capitalized cryptocurrencies (low cap gems) and during a full-on bull market - which happens approximately once every 4 years. It is during this phase of the market that life-changing wealth is made.
If you would like to learn more about this process and follow us along as we scan the cryptocurrency landscape for the latest emerging cryptocurrency projects, consider signing up for our Free cryptocurrency investment newsletter.
Learn to Profitably Invest in Low-Cap Gems
Some of the best returns ever seen within the cryptocurrency market have come from low-cap gems. In the beginning, there was only Bitcoin and if you purchased it when it was only a few dollars, this could have been considered a low-cap gem. While the opportunity to purchase Bitcoin for only a few dollars no longer exists, there is a thriving cryptocurrency market of over 10,000 actively traded cryptocurrencies - some of these are low-cap gems.
Follow us as we explore the cryptocurrency market in search of the next low-cap gem.
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