First off, this is not a financial advise, it is just an opinion. Please never take any financial advice from somebody you don’t know, especially from random people on the internet. It is your due diligence to do the research and make investment decisions. Invest at your own risk.
This question takes leading positions in the top 10 questions people are asking about cryptocurrencies for more than 4 years, so here’s our attempt to analyze the market and help people to make their financial decisions.
Ok, now about crypto investing…I’d recommend to approach investment in cryptocurrencies exactly in the same way you would invest in startups or mature stocks market. I’d say it would be totally reasonable to create diversified portfolio of 10-20 cryptos and expect most of them to fail. If one or two will become the next big thing, it will make this approach worth time and efforts. Any better outcome will be just a pleasant bonus. As a side note, I should notice that it is always good idea to invest only money you are 100% ready to loose.
How to assess which coin to invest in?
The nature of the cryptocurrency industry is unstable and unpredictable most of the time so investment decisions should come from understanding, not blind wishes. For that, some learning is necessary. I can recommend to start from the bitcoin website and ask question on industry leading websites like bitcointalk, stackexchange and reddit while avoiding non-trusted sources and scam groups you can find, for instance on Facebook.
To get better understanding of which cryptos are trending now you can use tools like coinmarketcap and cryptocompare and assess coins from TOP 10 by market cap or daily trading volume.
Does cryptocurrency worth investment?
Now that you have your very own list of crypto coins you are willing to invest in, it is perfect time to start researching your potential investment candidates. Research every currency on your list by visiting official coin website and read through their pitch and Whitepapers. The key here is to understand the value proposition of the coin. There’s a lot of crypto developers who don’t explain or don’t have at all any value proposition. To be honest, I don’t really know why they make vital information hard to find giving you little to nothing about their product….but who am I to judge them, right?
As a rule of thumb, DON’T INVEST in something you don’t understand! If there’s something you don’t have clear understanding of, write this currency off of your list and proceed to the next investment candidate.
What’s behind the words?
When you like and understand the value proposition of the coin or token, it is time to look at the blockchain it is built on. These days most of them are built on Ethereum blockchain, so the first questions would be: why should I invest in this coin? Wouldn’t it be better to invest directly into Ethereum? You are the only one who can answer all these questions. Basically, if you see under-priced currency compared to its daily volume, you might want to go ahead and invest in it (remember? you already filtered it out from many available coins on the market). From another hand, if the coin soared up in price not that long ago, it might be safer to invest in the parent blockchain directly.
Who’s on the team?
Ok, now you can identify your dream investment coin and have your faith in it. Perfect! Don’t forget to dig a little deeper and look who’s on the team, who these guys are. Do they have experience? Do they have successful projects in the past? Are they motivated to keep this project in active state? What is their area of expertise? Are they working full-time on this project, or is it just a hobby sidekick thing?
I’ve been working on many startup projects in my life and when I see actual product developers are outnumbered by all kind of founders, managers, CFOs, etc., I’ll run away from such a project…it is my personal opinion, it is purely me saying what I like and what I don’t like.
The Roadmap
One of the last, but not the least things you should look at researching cryptocurrency. By looking at the roadmap you can estimate how many releases are planned and when they are planned. In other words, you can estimate development speed and new features availability. Being said that I should mention that many releases scheduled is kind of good thing – you’ll be able to see if this currency is getting more attention, or is it rolling down the slope and it is time to sell it and invest in something else.
How many exchanges is it traded on?
The fact that coin is not available on many exchanges usually means it is slowly dying or hasn’t been discovered by many traders yet. So when it will be supported by more trading platforms, token price can potentially soar up to the skies.
Final words
If you made it all the way here, I want to say thanks for reading this article! …And I promise you here’s finally my final words on this write up 🙂
Now you should have coin(s) that passed all the filters and looks like a golden nugget you must invest in. If it is up to me, I wouldn’t daytrade such a coin, giving it my hope and faith that it will bring back much more in the long run. It won’t be bad idea to setup stop loss at around 50% of investment and take profit order somewhere around 400% – 900% to secure profit and freeroll if it spikes while you’re away from the trading platform.
Below are couple of projects I personally like. Please note it is in no way financial advise, this is just my humble opinion 🙂
BitConnect – Interesting idea well explained, a little undiscovered yet. Team is unknown, but recent updates show they have enough experience and motivation to handle this project.
Trusted Landing Circles powered by Blockchain – Great idea. Simple yet powerful. Skillful team with great advisors.
In case you wanna go the easiest way without hassle of researching new coins, I’d recommend to add Bitcoin, Ethereum, Ripple and Litecoin to your portfolio with stop loss and take profit orders. Don’t expect to get double or triple ROI, but 20% – 70% of passive return might be pretty possible.
Another way to invest is to find some kind of small project with great potential and bright future and invest in it. There’s a lot of interesting projects out there you can easily google them, or just invest in our project 🙂
If you find any of provided information helpful or just want to support our project, please donate:
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*Disclaimer: neither me or anybody from our team is or was associated with any service and/or product mentioned in this article
