Private equity investors are understanding, little by little, what a potentially lucrative area cryptocurrency is for their capital. The best-case scenario for cryptocurrency is that it completely transforms society in much the same way as cell phones or the internet.
And even the worst-case scenario, which is a slow but steady climb to acceptance over several years, doesn’t seem all that daunting to investors, especially if they can spot which digital coins can break through the regulatory morass to gain immediate popularity with both those who want to use the tokens and those who want to invest in them. The private equity firm manager who can spot these coins is going to make an extremely impressive profit for clients.
Of course, none of that comes easily. Cryptocurrency has become an incredibly crowded environment, with both legitimate entrepreneurs and get-rich-quick scammers entering the space practically by the minute. That makes finding the diamonds in the rough that much harder for both individual investors and private equity firms an extremely difficult proposition. Individual investors often seek the assistance of so-called trading robots; you can learn about Bitcoin Code, an artificially-enhanced algorithm for trading. Private equity investors have to rely on their savvy and wits to get the job done, but here are some factors that can help.
1. The Hook
In Hollywood, they have what is known as the elevator pitch, which is when a producer pitches a movie to an executive in such a pithy fashion that it can be done in the time it takes to ride an elevator up or down a few floors. New cryptocurrencies should be able to be explained in that same way, with a hook that is easy to understand after just a few words in the description. That means that the coins in question have a simple application that appeals to a great many.
2. The Technology
A cryptocurrency endeavor is only as strong as the technology behind it. It’s OK for the pitch to be simple, but the technological aspect of the coin must be sound and able to be replicated over a long period of time without any glitches. If your private equity firm needs to hire an IT expert to help figure out which crypto coins have this kind of transformative technology, it can be an extremely helpful use of resources.
3. The Leadership
Those involved with cryptocurrency are sometimes people who have a lot of technical know-how but little ideas of how to run and market a business. The best coins are the ones who have managed to secure leadership whose experience goes beyond just understanding the technology behind the coins. As a result, firms looking for cryptocurrency investment opportunities should be as focused as the folks behind the coins as what the coins can do themselves.
Again, there is extreme potential for cryptocurrency investing in private equity. But it only will come together if firms can spot the coins that can really do some damage in the market.