With the rapid development of digital currency and web3 technology, there are more and more crypto investors. But it is not enough to find a popular token and start investing your money. It might not turn into a successful investment or even cause a loss of your funds.
That is why we want to share with you some tips and general advice on how to make a promising potential investment. By the end of this article, you will side with better investors and better understand how to invest your dollars.
A threat of scam for digital currency investors
Although there are many reasons you should analyze before investing in crypto coins, a scam is one of the most dangerous ones. Unfortunately, scammers are working on their fraud schemes every day to make them even more sophisticated and unsuspicious.
Imagine that you found a new cryptocurrency, made a technical analysis, got your money, and confidently made a considerable investment. But then you look at your crypto wallet and see no tokens on it. So you wait, but nothing changes. Sadly, you have become a victim of the scam. That is a terrible scenario, isn’t it?
Such cases are not rare in the crypto industry, and every investor has a chance to face a scam. If you want to be prepared for such schemes, and save your funds, make sure to check out this article about cryptocurrency scams.
Steps you should go through to identify a promising crypto token
As there are so many little details that you should consider before buying crypto coins, we broke them into a step-by-step process. Most of the tips are based on research, so prepare your browser.
Use cryptocurrency aggregator
Start researching by finding a desired cryptocurrency coin on the cryptocurrency aggregator. There you will find all the info about the crypto scene market. There are a few essential things you should look at here.
- Market capitalization. Make sure to check the market cap of a particular coin before investing. A rule of thumb is the higher the value, the safe it is to invest.
- Trading volume. With the help of trading volume, you can find out how many of the coins are sold over a certain time. It is recommended to stay away from digital currencies with this indicator.
- Price and Rankings. Check out the overall rating of the cryptocurrency project on the platform before buying it. Don’t forget to look at the total supply and circulation supply to predict their price better.
Find the website and social platforms of the project
Companies that sell non-fungible tokens and just crypto should own a well-designed website. First of all, a solid website is a sign of a competitive company created to be on the same level or even better than most cryptocurrencies.
Many websites should give you info on their development team. Each leading developer should have a portfolio, a history of their success, or just some of their info. Make sure that a company’s community consists of credible and skillful partners who know how to do their best.
Every project launched on the blockchain platform should have a roadmap if they want to have success in the long run. Look for the future plans and stages that a crypto project should have.
Make sure to examine existing social media as there you can find many exciting audience insights about its securities, specific data, and how it relates to other cryptocurrencies.
Don’t neglect white papers
And finally, you should carefully read through a white paper. It mainly contains technical information essential to know if you want to be a thoughtful investor. If you cannot access the white paper, it is a sign that it’s not entirely secure to invest in this cryptocurrency.
There is a massive hype around cryptocurrency in the technology-fans community. Even though everybody is talking about how profitable and promising it is, don’t rush in. Instead, you should accept the game’s rules and create an image of the cryptocurrency by examining data on the net. Make sure to use the given advice to get more value out of investing and avoid being deceived.