Here're some facts that investors need to evaluate before buying a cryptocurrency. Let's go !🚀
1.Check the White Paper
2.Scan Social Media Channels
3.Learn about their team and partnerships
4.Evaluate Crypto’s Market Metrics
5.Research Price History
1.White Paper
What's white paper? A white paper is like a document which summarizes crucial information on a blockchain or cryptocurrency projects. So it's really important to check white paper whenever you want to buy crypto.
How to review : You can start searching for the project's website and looking for the whitepaper. Many projects also have a page where you can find the whitepaper. And many whitepapers can be found on crypto news outlets websites, such as CoinDesk and CoinTelegraph. And there are also websites and platforms that compile and categorize whitepapers.
2.Scan Social Media Channels
First, you gotta check out their social media channels. Most crypto projects are on Twitter, Reddit, Discord and often on telegram.
Watch out : for crypto scams on social media, avoid groups that are too pushy with their sales tactics.
Do a general search: research across social media to see what people are saying about the cryptocurrency.
3.Team and their partnerships
First off, the success of a cryptocurrency heavily relies on its team members. Many reputable coins have team members who’ve been part of other successful coin launches.
Why is it important?: This builds trust in the community. You can usually find the founders and key team members in the project’s white paper and on their website.
Do your research : check out their reputation and leadership in the blockchain world. A team with a history of successful projects is a big plus, while a brand-new team might not have the experience needed to succeed.
Partnerships : Look for a list of partnerships on the project’s landing page. Remember, make sure to do research and verify these partnerships are real. A strong team and partnerships are crucial in the crypto world.
4. Evaluate Crypto’s market metrics
There are 3 key metrics you need to know.
Market Capitalization (Market Cap) : the total value of all the coins or tokens in circulation. High market cap usually means the cryptocurrency is more established and might be a safer investment.But be careful! Even cryptocurrencies with high market caps can be risky, so don't rely solely on this metric.
Trading Volume : Trading volume shows how much of a cryptocurrency has been traded within a specific time frame.
Supply Metrics :
•Max Supply: Maximum number of coins that will ever exist.
•Circulating Supply: The number of coins currently being traded or held in wallets.
•Total Supply: The total number of coins that currently exist, including those not yet circulated.
By doing these, you can gain insights of crypto and which will help you to understand its market.
5.Price History
The crypto market is wild and price swings are normal! But here’s the key: look for a steady climb over time. A gradual increase means stability and growth. Look at the price over different periods, including the “all-time” view. This gives you a clear picture of long-term and short-term trends.
By carefully looking at the above factors, you will understand the possible risks and rewards of investing in a cryptocurrency. I hope this content will help you. Thank you!
Risk Disclaimer : Cryptocurrency prices are very volatile and risky. Only invest in products you know well and understand the risks!