Crypto investors demand more than hype and genuine utility

Crypto market investors are looking for more than just a flashy product. Although low market cap cryptocurrencies may seem tempting, they are not necessarily good investments.

The real question for potential buyers is what the token is for. It’s not enough to have an innovative, well-designed product – there must be a clear purpose for buying and keeping the part.

Crypto investors are looking for genuine utility

As the crypto market continues to grow and mature, investors are becoming more savvy and discerning in their choices. They are looking for projects with real symbolic utility – something they can actually use and benefit from in their daily lives.

This shift in focus has led companies to re-evaluate their token’s role in their ecosystem as crypto investors want to know what they are buying into. In response, many companies are now thinking creatively and critically about the value their token offers.

Some companies are even exploring new use cases for their tokens, such as incentivizing user engagement or providing access to exclusive services.

An example of a company that has successfully leveraged the utility of tokens is decentralized finance Compound (Challenge) Platform. Made up of COMP the token is used to vote on protocol changes, provide liquidity, and earn rewards. This led to strong demand for the token and boosted its market capitalization from 0 to $1 billion in just one year.

Another example is Chain linka decentralized oracle network that connects smart contracts to real-world data. Its native token, LINK, is used to pay for services on the network and incentivize node operators to provide accurate data. This has helped make Chainlink one of the most widely used decentralized oracle platforms in the blockchain industry.

Despite the growing interest in symbolic utility, not all companies have succeeded in providing real value. Many coins are still considered speculative investments, with no clear purpose or underlying value.

High Risk in Small Cap Tokens

Investing in low market cap cryptocurrencies with no real utility can be a risky proposition. The utility of a token refers to its purpose and usefulness within the ecosystem in which it operates. In the world of cryptocurrencies, the market capitalization of a token is largely dependent on its perceived value, which is derived from its usefulness.

Crypto investors should consider the purpose and use case of the token. Tokens with low market capitalization and no real utility may not be backed by tangible assets or have inherent value. As a result, these tokens are subject to strong price fluctuations and their value can drop quickly and without warning.