You are new to the crypto universe and you are looking to invest in some cryptocurrencies that you might have heard about from a friend at work, or maybe you are finally making the jump to get on the Bitcoin wagon. Great for you! You will quickly be amazed by this new market and all the thousands of coins that are available for you to buy.
Wait a minute, there are over a thousand different cryptocurrencies to buy!? Yes if you look at https://coinmarketcap.com/all/views/all/ the amount of coins listed there are actually staggering 2238! Ranging from Bitcoin at the top all the way down to some coin that you probably never need to know the name of.
So considering that there are so many coins available on different crypto exchanges how and where do you start picking the right one to invest in? Because trust us, many of those coins are nothing more than scams or failed startups.
If a cryptocurrency was launched in 2017 or earlier and they are still around, and active in the development and communication then that’s a good sign that they have a solid foundation and team behind it.
Sometimes you can find some good information on their website. But don’t trust it completely just because it’s on their website! There’s been numerous amounts of scams throughout the year where teams have been faking their profiles. So try and use LinkedIn, Facebook, Google and other sources to confirm the identities and histories of the team members! And check how active they are on Reddit, Telegram, Medium, Twitter, etc – does it look they are active and genuine?
Yes, if you don’t understand the business idea then you probably shouldn’t invest in the crypto either. If you can’t explain the concept to a friend or even grasp it yourself then it’s a risky investment. Because either others don’t understand it either and the team won’t be able to make their idea successful. Or if you don’t understand it then why would you invest your money into it?
If there is very little trading volume then you are in the risk of getting stuck with a coin that you can’t sell! Use Coinmarketcap or Go CryptoWise’s Live prices section and check the trading volume in last 24 hours. If it’s very low compared to the other coins you are exposing yourself to risks that it won’t be any buyers around if end up wanting to sell that coin!
You can see that Bitcoin’s current price is about $9200 USD. And you see that this new coin is only valued at $0.20 cents. Then surely that have all the potential in the world to increase in value. Maybe not to Bitcoin’s exact price level, but maybe half? If you think like this then you’re thinking in the wrong way. Use the market cap to determine how valued a crypto is. Market cap is the traded price x the circulating supply – find out more about market cap and how it works here.
That is a surefire plan to fail. You have done all that good research into the team, the business idea and you have made the decision to invest in the crypto! But after that you forget about it. You never continue to check how well they are progressing with their product or service. If you have this mindset then you will most likely end up on the wrong side of things at some point. The team might be falling behind on their roadmap, they might release products that doesn’t work or is just not that great, or even do an exit scam and all the signs were there, but you missed them. Stay up to date with your investment!
Yes this advice is commonly shared, not only in the crypto market but it also applies to investing in stocks and anything else. It means that you shouldn’t jump into an investment because everybody else is doing it, or because it has risen in price very quickly. There’s a good chance you’ll end up getting burned. Because what goes up very quickly might go down even quicker!
Per Englund – Founder of Go CryptoWise a cryptocurrency and tech fan that wants to see better and smarter products and services that makes our lives better and easier
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