What are Hidden Gems? A Guide to Finding Hidden Gems

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What are Hidden Gems?

A hidden gem refers to projects/tokens/coins that investors expect to grow significantly in the future but are currently not popular and have a low valuation. These hidden gems are typically evaluated based on factors such as the project team, tokenomics, participating investment funds, and even on-chain data or insider news.

However, this form of investment carries many risks, such as lack of liquidity or the project team abandoning the project. Therefore, thorough research and effective risk management are essential for investors when selecting hidden gems.

Methods to Discover True Hidden Gems

Based on Fundamental Analysis (FA)

Fundamental analysis is usually for those with foundational knowledge of blockchain and cryptocurrency. To find hidden gems through fundamental analysis, investors need to answer the following questions:

Which ecosystem and category does the project belong to? You can find this information in the project’s Whitepaper or through its official social media channels.
Is capital flowing into the project?
Is the project’s tokenomics good? Who holds the most tokens? Is the token distribution schedule reasonable?
Who are the project’s investors?
Does the project team have market experience? Are they transparent and reliable?

On-Chain Analysis

Project information and data are transparently published on-chain, making on-chain analysis an effective method for investors to assess a project’s potential. Some criteria investors should consider when analyzing on-chain data include:

On-Chain Metrics:
- Total Value Locked (TVL)
- Transactions
- Trading Volume These metrics indicate whether the project is gaining user interest.
On-Chain Data for the Project’s Token:
- Total circulating supply
- Number of tokens burned (if any) or locked (staking)
How many people hold the project’s tokens?
Project Revenue: A crypto project is considered promising if it has a product that generates consistent cash flow. This means the project has a product providing solutions to existing market problems, meeting user needs, and thereby creating value for the project and attracting a certain user base.

Tools for Finding Hidden Gems

X (Formerly Twitter)

X, formerly known as Twitter, is an indispensable tool for those participating in the crypto market, especially in finding hidden gems. When creating an X account, the first step is to follow the founders and some key opinion leaders (KOLs) in the crypto market. Examples include:

Arthur Hayes: Co-founder of BitMEX, he is a notable figure in the market with over 500,000 followers.
Vitalik Buterin: The father of Ethereum, with over 5 million followers.

Additionally, investors can use X to follow the team and founders of hidden gem projects to get the latest updates and track the project’s development roadmap. This helps users have an overall view to assess the project’s potential.

Following Major Investment Funds

Tracking the actions of large investment funds (whales) is always a reliable strategy in investment. Some major funds include a16z, Paradigm Research, Binance Labs, and Polychain Capital. Observing their investment moves can help identify potential projects.

DefiLlama

DefiLlama is a website that aggregates important project metrics, from Total Value Locked (TVL) to trading volume. The site also displays significant timelines, helping investors assess the project’s development process and problem-solving approaches.

In addition to DefiLlama, users can use Dune and Dex Screener to monitor other metrics such as liquidity and data from competing projects. If you want to know more about on-chain activities of whales, you can use paid services like Nansen and Messari.

Discord

Discord is where projects build their communities, allowing investors to contribute ideas to the founders and the project. If a project has future potential, the community on Discord usually interacts positively, showing little signs of discouragement or negativity, even when the project’s token/NFT prices are falling.

Conclusion

Through the article “What is a Hidden Gem? Guide to Finding Hidden Gems in 2024,” we have provided you with tools, reliable sources, along with the perspectives and aspects needed to accurately assess and identify hidden gems, helping to multiply your asset value.

However, in our personal opinion, users should combine various factors such as capital flow, community, founding team, TVL, technological breakthroughs, and operational models to evaluate a true hidden gem project.

Additionally, searching for hidden gems carries significant risks, potentially leading to scams and complete loss of assets. Therefore, you need to thoroughly research before making any investment decisions and only invest in hidden gems with money you are willing to lose.