5 Easy Ways To Pick Which Cryptocurrency To Invest In

Globally, the desire to invest in different cryptocurrency coins has increased.

The trigger for this is the rise in the value of Bitcoin, Ethereum and other cryptocurrency coins - coins which were bought at meager sums at the time, and have now turned a number of people into millionaires.

Everyone is hoping to buy the next 'Bitcoin and Ethereum'. That is, a coin with modest investment capital, yet capable of raking in massive returns. In other words, we seek the coins with the best potential. As a matter of fact, there are people who have invested in some coins and have had their investments vanish into thin air.

Are you interested in investing in cryptocurrency and are not sure which coin to put your money in? This article would help put a perspective on what you need to look out for when investing in cryptocurrency. For ease of understanding, the five tips would be delineated into five sub-headings.

1. Whitepaper: This is one of the most important factors that you should let influence your decision when you consider investing in a coin. A couple of the things highlighted later (e.g., technology, leadership, vision) are usually contained in the whitepaper. As a matter of fact, the primal step to take before narrowing down what coin to invest in is to read the whitepaper. All cryptocurrencies have a corresponding white paper when it is launched.

There are very salient information that you should keep an eye out for while reading a white paper. Do they have achievable objectives and aims? Is it meticulously written or does it seem rushed? How achievable are the outlined benefits? The answers to these questions within the whitepaper should inform an average investor on whether such a project has potential or is just a 'rug pull' in waiting.

2. Leadership Team

One of the major determinants of a coin’s ability to thrive and succeed is the team in charge of making the decisions regarding the coin. The rationale for this is that, like other business ventures, the leaders are customarily responsible for visioneering and making most of the salient decisions regarding the execution of their vision and eventually the trajectory of the coin. It’s simple; if the leaders are credible and qualitative, then, you have a coin which is headed for success and vice versa. Now, the question is: how can one identify a coin with a good leadership team?

On this point, the first thing to consider is what experience does the leadership team have? That is, do they have people who have worked on similar cryptocurrency projects? If yes, was it a success? Is there a charismatic figure who could sway people to bet on the coin? Have the members of the leadership team committed their resources to the success of the coin?

In order to determine whether the coin has a solid leadership team, all these questions have to be positive. For instance, people feel safer investing in coins which have a popular, successful businessman affiliated to it. More so, people want to be sure that there is a stake of the influencers on that coin. The implication of this is that if more people invest due to affirmative answers to these questions, it in turn gives the coins stability and success eventually.

3. Technological Basis The fundamental technology upon which cryptocurrency is built plays an important role in the success of the crypto coin. Coins based on cutting edge technology usually have higher chances of success. Bitcoin, Ethereum, Solana (upcoming) are all coins that have a strong underlying technology. Some of the stale technology upon which coins can be hinged are: software development, gaming, art, amongst others.

The technology also includes the economic impact of the coins. For instance, for bitcoin, it is not hedged against the currency of any centralized government, hence not subject to regulatory quirks. Ethereum also underlies contemporary finance. Now, other coins hedged against stable coins like the AUDT (Australian stable coin) have also proven to be stable. Putting this factor into careful consideration increases the chances of landing a stable coin to invest in.

4. Community:

Another major factor to consider when looking to invest in cryptocurrency is the community of people committed and loyal to the success of the coin. Do not mix this up with the leadership team. This has more to do with the followers.

If you’re unsure of where to start looking, there are a lot of platforms to assess the community of a project. Platforms like YouTube, Reddit, Twitter (sometimes) can be used to examine the opinions of the community concerning the coin in question. It is important to prioritize coins with stronger communities over those with weaker ones. The point is that, when a coin has a strong, cult following, chances are that the followers believe that the coin has massive potential to thrive in the market. On the converse, a coin that has been around for a while with little following suggests otherwise.

One platform that has been used by a lot of crypto experts is Reddit. Most coins have communities on reddit. Ask a lot of questions in their community groups to get a good idea of what the future of the token would look like. Whichever community strikes you as more believing in the prospects of their coin should be given a favorable bias in your decision-making process.

5. Market Value and Stability Just as is obtainable in business, the historical market value and stability of a coin is a pointer to whether it is worthy of your time and money. If you want to accurately foretell the future of something, you have to study its habits.

Coins that have been volatile and easily susceptible to fluctuations should really be a no-no, especially when you are considering long term investments.

Again, coins that perform better in bull markets tend to be better for investment. This is because they have proved to possess the stability to withstand the dip and bounce back afterwards.

Bottom Line

At this point, the indices for a good research and background checks for a prospective coin should be clear. These factors listed above should be given high consideration when investing in cryptocurrency. However, it is important to remember that the crypto market is of a volatile nature and no investment is hundred percent certain. Only good research can help increase your chances of investing in the right coins.