- Investors are piling into cryptocurrencies as the industry grows.
- Sameep Singhania shares his best advice for identifying investment opportunities.
- He also shared 5 projects he thinks have a bright future.
It’s still early days when it comes to crypto, an asset class that many expect to revolutionize the finance industry and beyond.
As such, the space is seeing massive investor attention. New coins are also popping up at a blistering pace, and people are buying in droves. According to JPMorgan, the share of cryptos excluding bitcoin and stablecoins as a share of total market cap jumped from about 22% on August 4 to 33% as of September 1.
But just as was the case for the dot-com era leading up to 2000, not every project will come out a winner, and investing at such an early time can carry significant risk. Of course, the potential for massive gains is present as well. So how should investors go about choosing where to put their money?
We asked Sameep Singhania, the cofounder of the cryptocurrency QuickSwap, a copy of UniSwap built on the ethereum blockchain. He gave us his best advice for identifying opportunities in the space.
How to identify DeFi altcoin opportunities
First, Singhania cautions against taking advice, and recommends investors conduct their own research.
“You should not just simply take words of some of the influencers or some of the people out there because they are giving advice based on their portfolio, based on their appetite,” he told Insider.
As far as what to research, Singhania said a top factor to focus on is the team behind a project. He said to look into who they are, how serious they appear to be, and their background.
Another top factor to focus on, Singhania said, is a team’s product. He said to decide on whether or not a product serves a real need in the space and has a viable future.
A smaller factor to focus on is a coin’s market capitalization. If a coin has a large market cap and is widely distributed, it provides some degree of validation that a project is legitimate and others have presumably done some research on it.
Finally, Singhania said not to focus on a coin’s price. A coin with a low price isn’t necessarily the best investment, he said. He pointed out that the same goes for the stock market.
“The principles are the same,” he said. “Even in the share market, you should not invest a lot in the
— you find a stock which is at one cent, you invest in it just thinking it’s going to go up. That’s not going to happen.”
5 DeFi projects Singhania likes
Singhania shared five DeFi projects — outside of QuickSwap — that he likes at the moment. However, he cautioned that this should not be taken as investment advice and urged investors to do their own research.
First, Singhania likes Polygon. QuickSwap, an exchange platform, is built on top of Polygon, which is built on top of Ethereum. Polygon seeks to reduce the fees associated with transacting ethereum.
Singhania also likes ParaSwap. The project works to find the lowest exchange rates and fees for transactions on ethereum.
Third, Singhania likes Polytrade, which he helps work on. Polytrade is essentially bringing invoice financing into crypto, he said. Singhania said he most likes the enthusiasm of the founder and thinks the team is serious about building the project.
Fourth, Singhania likes some projects in the crypto infrastructure space, like The Graph protocol, which is a data query project for blockchain. Another is Chainlink, which is a platform for providing contracts between different blockchains.