By Gabriel Negrín
The world of cryptocurrencies continues to rise amid the ups and downs in price. The truth is that despite the weariness of some, new cryptocurrencies are being launched every day, providing new investors with an opportunity to experiment. Each of these cryptos comes armed with a unique selling point to attract more people to them.
According to Crypto Parrot, a crypto trading simulator, the number of known cryptocurrencies has increased dramatically. From September 2019 to September 2020, we went from about 2,890 cryptocurrencies to a staggering 7,138.
This means a total of 4,248 new cryptocurrencies in the palm of your hand.
And if that wasn't enough, the period between 2020 and 2021 marked similar results. We went from 7,138 coins to 12,046 — an extra 4,908 worth of market expansion.
BTC and ETH: The Blue Chips of Crypto
Despite being in the midst of a pandemic, the crypto market grew non-stop. Cryptocurrency developers have seized the opportunity to create new useful cryptos to be a shield against the economic crisis.
Normally, when we talk about cryptocurrencies, only a few come to mind. The most popular ones, of course, are Bitcoin and Ethereum. But BTC and ETH are the blue chips of the crypto market. They are great and will surely bring long-term gains, that's for sure. But it won't be life-changing money.
This is where these nascent coins have their greatest strength.
Emergence Amidst a Pandemic
Certainly, each new cryptocurrency has a distinct use case. Many of them are unique and revolutionary, many others are just a rip-off of an existing cryptocurrency.
Most cryptos are not developed just to have another digital currency to buy things. In most cases, these currencies represent platforms on which you can do many more things.
Many of the new cryptocurrency developments followed the example of Ethereum. In this way, these cryptos are not only tradable but also a useful platform for their users. Some of them are video games, some are high-yield farms, some are identity protocols, and so on.
And most of them are backed by some great names in the market. This gives them credibility over other new cryptocurrencies.
The Upside of the Latest Cryptocurrencies
But, usefulness or not, many of these coins present a life-changing opportunity, similar to when investors bought bitcoin or Ethereum in their early days.
They also learn from the mistakes of other cryptocurrencies. They can see the coding and marketing mistakes that drove big projects out of business.
Their relationship with their customers is also important. So current projects depend a lot on taking care of their community from the very beginning.
Given the opportunity cost, developers seized the opportunity to create new cryptocurrencies. Yet, the future of such cryptocurrencies is quite uncertain.
Being smaller currencies, they are more exposed to volatility and other factors that can affect them. Others are just looking for a moonshot. Some of them, sadly, are conceived as scams and once they gather enough, the teams disappear.
The Downside of the Latest Cryptocurrencies
The thing about cryptocurrencies is always going to be the fear and weariness that some people have with them and their future.
Because no matter how big the project is, its price doesn't only depend on supply and demand — speculation and market noises affect it as well. So when we see certain people talking about how big this or that crypto is, the least we can do is research it.
The downside to all this is that with the new cryptos, there is also a strong possibility that many of them are scams.
Yes, some cryptocurrencies survive the wave of popularity and many others are able to stay in the market, but that is another story. Many times, these projects are mere scams. Many people behind these projects are just trying to make a quick buck.
You can easily spot these projects. They tend not to respond to inquiries, they don't have enough social media. Their information is null and almost non-existent, all information is very vague. And the most common feature: they promise incredible results and returns.
Just remember: if something sounds too good to be true, it probably is.
How many of these projects will still be alive in the next two years? Hard to say. Many projects just don't click with the public and end up being a flop.
However, that's not at all uncommon.
Only a few will survive over the years, you just have to be vigilant and search well for projects.
