More than 6,000 crypto coins are actively traded in a day. With so many to choose from, how would you know which ones are worth investing in? “Do your research” is an oft-repeated tip for investing, but what exactly should you be looking for? Here are some basic items to peg your research on so you can decide on which coins to invest in.
The developer and the team
Scrutinize the whole team – founders, developers, leadership, marketers, etc. They should be highly skilled with a proven track record of success. Investigate their vision or their road map. It’s a telltale sign of ambition and you’d like to invest in crypto coins that will be around for a long time. Study their mission and vision. You would want to invest in a coin that will pay off in the long run and if possible, a coin that can possibly be adopted by countries, companies, and individuals as currency.
The white paper
When a new crypto coin is launched, it usually comes with a white paper. White papers describe the purpose of the coin, its technology, how it works, and the vision for the coin. It’s the first thing you should read in order to know a coin’s fundamentals.
Take a look at the technology it uses. See how the technology makes it stand out among all 6,000 crypto coins. Innovators with sound vision are usually an ideal investment. For instance, Monero uses Ring Signatures, Stealth Addresses, and RingCT to keep the sender and receiver of XMR anonymous. These are what make Monero the top choice for a privacy coin.
Examine if milestones they have promised are achieved on time. Take a look at the pricing history. Note its volatility in value and resiliency during market dips. A coin should have robust growth in its active users and trading volume.
Most cryptocurrencies have a predefined maximum supply. When the maximum has been attained, no new tokens will be generated. The price is more likely to go up if interest is maintained while the supply is fixed. Take into consideration the total supply and the current circulation of a crypto coin. Bitcoin is currently enjoying high prices as there are only 20% left of Bitcoin to mine.
Credibility and Reputation
Go on Google searches and crypto communities. Find out what people are saying about the coin. You need to invest only in coins that have strong credibility and a good reputation.
The research or data-gathering doesn’t end here. You’ll need to be aware of current crypto values, news, and events. Keep an eye out on a coin’s current price and pattern. You’ll need to stay on top of crypto’s volatility. There are platforms online where you can check on this. News cycles and world events may also affect a coin’s price. If you are well-informed of these, you’ll know if it’s a good idea to invest more or if you need to cut your losses.
If reading is not your cup of tea, there is a multitude of YouTube videos you can watch, learn, and get news from. Make certain that you only follow or subscribe to reputable and credible sources or YouTubers.
With that said, if you’re into crypto as an investment, there’s no need to look at the prices every day. The best investment strategy is to buy and hold. If you believe in your investment, made rational crypto decisions, and you only invested money you can afford to lose, you don’t need to watch the prices each day. You will only stress yourself out and will risk your personal life by becoming too attached to the market.
Knowledge of the latest scams is also worthwhile. You may already have an idea of the most common crypto scams, but with the value of crypto now, it’s inevitable that new forms of fraud will come up. Be aware and be vigilant about security. You wouldn’t want your time and money to go to naught.
Another measure of security is to make sure you have a secure wallet for your coins. If you have Monero, XMRWallet is a crypto wallet that guarantees security. Create your own XMRWallet now to send and receive Monero in an instant while remaining in control of your coins and key.