There are many secrets to digital currencies that can help you create wealth.
But today we will talk about 3 secrets in particular that will contribute greatly to increasing your profit in the field of digital currencies.
But only if you understand these secrets well, their importance and how they work. Let us learn about the most important secrets of digital currencies.
In this article
3 of the most important secrets of digital currencies: Initial Coin Offerings (ICOs) The power of initial coin offerings
The mechanism of burning digital currencies. Is the mechanism of burning digital currencies always effective?
Crypto Twitter and discovering the secrets of digital currencies
3 of the most important secrets of digital currencies
The secrets of digital currencies that we will talk about are not usually known and only experts talk about them, so what are they?
Today we will talk about Initial Coin Offerings (ICOs) and the burning mechanism in digital currencies. We will also talk about the importance of cryptocurrency influencer Twitter accounts, known as influencers.
These three points are extremely important in the digital currency market. When we get into more details you will know why. But it is necessary to know that discovering the gems of digital currencies or projects that increase in an insane way is an integrated process. What you will learn today is just part of this process, and there are other parts you can learn about, especially the token economy. So let's get started.
One of the most important secrets of digital currencies that lead to wealth creation is initial coin offerings (ICOs).
The simple summary is that digital currency projects require huge funding in order to build and develop on the blockchain. One of the ways these projects obtain funding is through initial offers. In these offers, what happens is that the project’s digital currencies are sold for a certain price to investors within a specific time frame. For example, we assume that during the months of August and September 2023, digital currencies from Project S will be sold in order to finance the project. Once the period expires, if the target amount or more is collected, the process succeeds. But what if this amount is not collected?
The money is returned back to the investors and the process is repeated at another time. The most important feature of these offers is that they provide an opportunity for everyone, whether professional investors or ordinary people, to invest in digital currency projects easily. All you need is just an encrypted wallet to connect to the currency site and purchase currencies.
After that, you get the coins once the project launches the coin and lists it on the various platforms.
1 The strength of initial coin offerings:
One of the most famous initial coin offerings is the Ethereum Initial Coin Offering. Currently, the price of Ethereum is approximately $1870. In 2013, Ethereum was selling for only 31 cents! This means an increase of more than 6,000-fold. This means that if you had bought Ethereum coins for just $100 in 2013, $100 would have been worth 6,000 times more today.
But this of course requires investing in a project of actual benefit or value. Since then, hundreds, even thousands, of different digital currency projects have emerged. All of these projects were and are still seeking to raise money through their initial offerings. But in 2017, due to the spread of fake projects and scams, IPOs gained a bad reputation. Many scams and frauds occurred during this period.
Consequently, some projects resort to IDO or IEO, in which case either a centralized or decentralized platform simply takes care of the fundraising process for the project. This may give the project more credibility. Especially if the supporting platform is, for example, a huge platform like Binance.
To this day, initial coin offerings are still one of the most important secrets of digital currencies that can generate a lot of profit.
2 Mechanism for burning digital currencies:
The world is currently suffering from alarming inflation, which is eliminating the purchasing power of fiat currencies. This inflation is mainly due to the policies of central banks that seek to increase their liquidity in the markets. This leads to an inflation in the amount of cash available for different products offered in the markets. The result is that the purchasing power of the currency weakens due to inflation.
When coins are burned or disposed of, this makes the currency regain its purchasing power again. For example, if there is $1,000 for 1,000 kilograms of tomatoes, then if there is $10,000 for the same quantity, the price of tomatoes will increase 10 times. But if we get rid of half of the dollar liquidity, this will reduce the price of tomato by approximately half.
The same applies to the process of burning digital currencies. This is considered one of the most important secrets of digital currencies that you should know about. One of the most important reasons for the current increase in the price of Bitcoin is that the theoretically available stock is 19.7 million coins. But in reality, studies say that about 4 million Bitcoins have been lost forever due to loss of the wallet password, damage to devices, etc. This means that there are actually only 15.7 million coins. This is what increases its value a lot.
Is the mechanism of burning digital currencies always effective?
Unfortunately, many investors are deceived when they know that a cryptocurrency project has a burning mechanism. This is considered a good thing and will therefore reflect positively on the price. But in reality this is not a certain thing!
What pushes the price up is buying pressure and increased demand for the currency and nothing else. This means that the burning mechanism could contribute to this process. But the mechanism of burning digital currencies alone can never push the price higher. If there is no purchasing pressure on the currency, then whatever the burning mechanism is, it will never be effective.
Therefore, when you find a project, for example, that burns part of the fees paid, you must first know the size of the fees. If the amount of fees is one billion dollars per year, what is the percentage of these fees? Is it, for example, 25%? In this case, the burning mechanism is very effective and in the long term, after 10 years, it will greatly affect the price.
It is also important to know that the burning mechanism never affects the price in the short term. But it affects the price in the long term. This is because what is usually burned is not from the stock available in the markets but from the closed stock. Therefore, this burning may reduce the effects of annual currency inflation, for example. If the amount of annual currency inflation is 10%, it may become 5% due to burning. Therefore, this means that there is a strong opportunity for the project to grow in the future.
But most cryptocurrency projects end within a few years. Therefore, the project may not survive until it reaps the benefits of the burning mechanism! This is why we always say that you should not rely on the burning mechanism alone to invest in a digital currency project.
3 Crypto Twitter and discovering the secrets of digital currencies:
The latest and most important secret of digital currencies today is Twitter crypto. What is meant here is the field of digital currencies on Twitter. There is a very large digital currency community active on Twitter.
You will find many large, influential and famous accounts on Twitter that always talk about the secrets of different digital currencies. But you should always exercise extreme caution. Most of these accounts receive a fee from various projects in exchange for talking about them. So everything they say may not be true.
But some secured accounts enjoy strong transparency and trust from their followers. This means that you can rely on these calculations a little to guide you. You can search for the digital currency projects they are talking about. There are thousands of projects currently available, so they may make the search process a little easier for you. But no matter what, never follow anyone without doing your research.