Over the last 10 years, thousands of different cryptocurrencies have popped up. Some of them achieved massive success and others have crashed and burned (hello Titan). So, it can definitely be tricky to figure out which cryptocurrencies to invest in.
In this market, you’ve got to develop a thick skin. Just think about all the recent meme coins. Don’t be fooled… very few of them will survive. It’s pretty much straight up gambling at this point. Still, some people don’t get it. They think that crypto is some kind of a self-fulfilling prophecy. And they’re certain that meme coins will keep rising in price. 🤦 This is despite the fact that they have no real development team, they fulfill no real purpose, and they’re backed by nothing. Memes may be funny, but you will sure as hell stop laughing when all of your money goes down the drain.
So, how can you be sure that you are really making an educated decision about which cryptocurrencies to invest in?
The truth is: there is no shortcut that will make your crypto portfolio more profitable. We all make bad trades. However, following a few simple principles can greatly mitigate the risks involved in investing in cryptocurrencies. In other words, keep reading to find out how to avoid the worst kinds of cryptocurrencies.
1. Gain a Solid Understanding of the Coin’s Technology
The technology behind a coin is what makes it unique – and ultimately leads to what makes it successful. When you compare one coin to another, you need an understanding of its functions and capabilities. How does this tech stand out from all the others? What makes it worth your money over the next coin?
What you want to look for are the disruptors. These are the big innovators, people who are dedicated to changing the game of cryptocurrency.
For example, Ethereum has the draw of smart contracts, which makes it the baseline for many DeFi protocols. Due to its innovative technology, it’s one of the most rapidly-growing cryptocurrencies on the market.
2. Take a Deeper Look into the Price History
While a lot of focus is put on price predictions, a person can learn way more from price history. Simply put, most of the so-called “price predictions” are not actually predictions but wishful dreams. By looking at a cryptocurrency’s past instead, you get a better understanding of the direction the coin is heading in.
Spending some time diving deeper into price history can provide you with an overall picture of whether it is the right time to buy. You can also see if the coin was resilient during any major market dips.
But keep in mind – crypto is extremely volatile. It is always fluctuating. Nobody can actually predict a specific future price of any asset. This doesn’t make it any easier to nail down which cryptocurrencies to invest in.
3. Check Who’s Behind The Project
Anyone can create an illusion of a popular project. It just takes a media presence, a nice-looking website, and a few hard-core social media followers. Fortunately, there’s one thing that cannot be faked… a strong and dedicated team.
Creating a cryptocurrency is not easy. Sure, anyone can launch a worthless meme token, and write some dribble for a whitepaper. Real digital currencies often take years to develop. It takes good developers to get it done right.
Checking who’s behind the project is one of the easiest ways to decide which cryptocurrencies to invest in. Who has founded the project? How many developers are there? What have they worked on before? Does the project have any significant partners and investors? These are some key things to look out for.
4. Check out the Reputation
While there might be a lot of promotional garbage to sift through, if the coin’s a stinker, it shouldn’t be too hard to find out. Head over to Reddit or TikTok to see what the community is talking about. But look out for red flags! If there are a few accounts who consistently shut down any negative comments, run for the hills. If these keyboard warriors really believed in their crypto, they would be up for a friendly debate. You can also check out some of the OG forums. They’re nothing to look at, but somehow that makes them feel more legit.
It also doesn’t hurt to google the name of the cryptocurrency along with the word scam. You’ll be able to dig up all of the articles that question the crypto, and see how the community responds. As a rule of thumb, I would definitely question any crypto that guarantees a specific return rate. Otherwise, you’ll have another BitConnect on your hands.
5. Ask Yourself: Where is This Coin Headed?
As we talked about looking at the history of the coin, It is also helpful to search for a coin with a promising future. Does it have a solid road map and development plans? Both of these can lead to better long-term success
When a coin has clear, set timelines for their development it shows a commitment from their team and leadership. It definitely makes a more promising investment. Don’t you think? This timeline can also help you gauge and plan for major updates.
Asking all these questions helps you establish a very important thing: Is the project you’re about to invest in actually serious? Is it just a scam or another worthless meme token? Investing in a serious project is the best way to protect your funds – verifying who is behind a crypto coin or token only takes a moment, and it can save you a lot of disappointments in the future.