Gem is a term for relatively unknown low-cap coins that have immense potential or are grossly undervalued.
Gem is a term for relatively unknown low-cap coins that have immense potential or are grossly undervalued. Recognizing potential gems is tricky since there are no precise attributes that make up a gem, other than the fact that it will eventually pump.
However, few
criteria must be taken into consideration when analyzing potential gems; namely their market cap, volume, supply, and fundamentals.
Firstly, gems are generally coins or tokens with low
market capitalizations since they haven’t hit the spotlight yet. Their
trading volume usually increases over time as more people discover them. Moreover, they usually have scarcity mechanisms deployed such as a
capped monetary supply like
Bitcoin or a deflationary model. However, this isn’t a hard rule since several gems are also inflationary.
Fundamentals are the most important aspect of gem hunting, albeit the hardest as well. You need to know a project’s hidden value, which may require technical skills and financial experience to detect. Some of the questions you should ask when doing
fundamental research and analysis are: “Is their product a game-changer?”, “What is this project’s unfair advantage?”, “how proficient is the team?”.
The top cryptocurrencies in the market today were once gems. When Bitcoin was first introduced to the public, very few people saw it for the gem that it was but those that did were immensely rewarded. However, you also need to tread lightly when gem hunting and never cut corners on your research. While some coins can go 100x in a few months, most of them drop to zero.