Cryptocurrencies are the most talked about investment options of our times. Investing in cryptocurrencies is definitely a risky affair, but it has the potential to generate high returns. Therefore, if you have decided to invest in cryptocurrencies, then make sure you do your research beforehand. Here are some factors that will help you make the right choice about which crypto to buy.
The history of coin price
The price of a coin can be a good indicator of the health of that coin, but it’s also important to keep in mind that factors like supply and demand affect its price. If you want to buy a particular cryptocurrency, how many other people are trying to do the same? And how many people are selling their coins? If there’s more demand for buying than selling at any given moment in time, then the price will likely go up. Similarly, if there’s more demand for selling than buying at any given moment in time, then the price will likely go down.
Cryptocurrency is such an exciting new investment opportunity because it has yet to be fully defined by markets or regulators. There are so many possibilities as we move forward into this brave new world.
The public profile of the team
One of the most important factors to consider when investing in cryptocurrency is the public profile of the team behind it. The team should be transparent, active, and have a good reputation. They should also be able to explain their product comfortably and answer relevant questions. You can gauge how knowledgeable they are by watching their videos or reading their articles/blog posts. This will give you a better idea of how active they are as well as whether or not they understand what they’re talking about.
You can also see if there is any progress being made with regards to development by looking for recent updates on social media accounts (Twitter, Facebook, etc.)
Circulating supply and total supply
When you’re considering investing in cryptocurrency, it’s important to understand the difference between circulating supply and total supply.
The total supply is the total number of coins that will ever be in circulation—and that can vary wildly depending on how much of a coin is mined and sold. The circulating supply is a much smaller number, referring to all of the coins currently in circulation.
For example: Suppose there are 10 million EOS tokens, but only 1 million are being sold at any given time. In that case, only 1 million EOS should be considered “active.” The other 9 million may still exist as tokens on blockchains or exchanges but aren’t actively trading hands or moving around (i.e., they’re doing nothing).
Community support and user sentiment
You can see if there is a community of people around the coin. CoinMarketCap is a good place to check how many users are actively trading and exchanging the token, but you can also check on Reddit or Telegram channels.
This will tell you whether or not there is an active community around a specific token/coin that is interested in its development and growth. If so, then it may be worth your while to invest in it because there will likely be user support for the platform as well as regular updates, which make using the currency easier and more efficient.
If the number of transactions per day/minute fluctuates wildly (i.e., goes up and down), this may be indicative of some sort of problem with user sentiment regarding security or honesty on behalf of the developers behind this particular cryptocurrency, so steer clear until these issues have been resolved!