- Ian Balina says getting in early yields the most value in cryptocurrency and blockchain investing.
- His team reviews the fundamentals of the blockchain and decides which ones have 10x potential.
- He shares his three favorite projects and explains why he’s betting on them.
As blockchain technology continues to develop, new cryptocurrencies are hitting the market on a daily basis.
Each one can be accompanied by a dictionary of new words and innovations. While the task of weeding through new projects can seem daunting, getting in early can also mean large gains.
Ian Balina, a blockchain entrepreneur, investor, and former computer engineer, has made a career out of spotting the winners before anyone else does.
He told Insider he was investing in stocks before he came across cryptocurrencies and made the switch. He’s now the founder and CEO of Token Metrics, a crypto analytics platform focused on finding early-stage crypto projects that have a good chance of 10x returns within the next few years.
Balina and his team don’t play a guessing game. They have the vetting process down to a science, literally. The team of experts at Token Metrics includes investment analysts and blockchain engineers who previously worked at Goldman Sachs, Mastercard, Amazon, and Morgan Stanley, just to name a few.
Together, they review about 75 new crypto projects a week with the goal of picking the top 10 to 15 based on a rigorous screening process.
In an interview with Insider, Balina shared how his team picks out which projects they think will stick around for the long run and have 10x growth potential, all before most investors and retail traders hear about them. He also shared his favorite picks.
The screening process
At the core of Balina's business is a newsletter that lists cryptocurrencies and blockchain projects that score above 85%. Getting to that number means a cryptocurrency or blockchain project must pass a series of screenings on a fundamental and technical level.
The initial screening starts with five basic questions:
- Does this project need to use blockchain technology?
- Can this project be realized?
- Is the project protected from commonly known attacks?
- Is there a viable use case for this project?
- Are there no careless errors in the whitepaper?
If it's a yes on this first front, the next phase takes a deep dive and looks at the project's innovation, architecture, code quality, ease-of-use, and the background of the team. Each section is given a numerical score that in the end totals 100%.
Balina said Token Metrics typically sticks to projects that score above 85%, especially during a bear market. In a bull market, there's a bit more leniency, lowering the mark to 80%.
Finding these early gems is where maximum returns are made, said Balina.
"By the time a project hits Coinbase most of the returns are already gone," Balina told Insider. "So for us, the money is made in finding projects before they hit Coinbase because Coinbase is where the newbies buy, essentially the retail traders and investors."
Projects like polygon (MATIC) that listed on Coinbase this year were already trading on smaller exchanges. Balina said his team identified polygon when it was at about $0.20, where it traded in early January. And within a few months, on May 18, it surged to a record high of $2.42, up by about 1,115%.
Accessing early-stage cryptocurrencies can be done through smaller decentralized exchanges (DEX) such as Uniswap or SushiSwap and a wallet such as MetaMask. Projects can be found through their own websites where they often sell their coins or tokens. Airdrops, which are free coins or tokens sent to wallets on an exchange, are another way of accessing early projects. Some platforms use yield farming, which means locking up liquidity in the project's exchange for rewards.
Current crypto favorites
Chia Network (XCH)
Balina believes chia is the next bitcoin. It's a cryptocurrency that defines itself as a blockchain for value transfer that is more environmentally friendly and more decentralized than bitcoin. Its key innovation is that it's based on "proof of space and time."
This crypto can be mined by downloading the underlying blockchain from the project's website. It can also be purchased through smaller exchanges. It was last trading near $275.64 early on Monday, according to Coin Market Cap.
This crypto needs to be mined by purchasing the company's miner, a hotspot that creates a wireless network. The miner ranges from anywhere between $400 to $500 and can be bought from a third-party supplier through the company's website. It uses proof of coverage to mine.
Daily gains for each miner vary drastically and depend on the volume of other miners in your vicinity. HNT was trading at $11.44, on Monday at 9:52 a.m. ET, according to Coin Market Cap.
Alchemix Finance (ALCX)
This project pays you advances on your yield farming through tokens that represent a fungible claim on any underlying collateral in the Alchemix protocol. An investor can add liquidity to the project by visiting the website and finding a list of exchanges that support the project.
ALCX was trading near $314.11 on Monday morning, according to Coin Market Cap.
Balina recommends keeping a close eye on these new projects by finding their communities on Telegram, Discord, and even Twitter. Any announcements on airdrops or new exchanges the crypto will be launched on would be announced there.