How to choose the right cryptocurrency in which to invest? Here are 5 things to check in order to choose a cryptocurrency that has real potential and thus lower your risk how to store cryptocurrency.
- Follow your intuition
As simple as it may sound, the first impression is usually the right one. Most investors are very sensitive to the marketing and communication referred by the project. Thus, if the name, the logo and the project reflect a professional image, the cryptocurrency issued at the ICO will have a better chance of starting its journey on a good basis.
The website, showcase of the project is therefore very important to analyze. Indeed, how could one imagine a team capable of implementing a complex project based on the Blockchain if this same team is not able to create a simple website?
- Understand the technology
The technology on which cryptocurrency is based is a key point to know.
As for any asset, it would be crazy to invest in the said cryptocurrency without knowing the fundamentals . Check the internet to see if the cryptocurrency in question uses proof-of-stake , proof-of-work , both or none (we will not go into detail in this article about these specific technologies used) .
The opinions of the Reddit community regarding cryptocurrency are also a good indication of the viability of the project and the feeling shared by an informed public.
- Is the emission of tokens limited?
The quantity of tokens created is an important variable to take into account: if the amount of tokens is limited, this allows to consider a probable rise in the price because of the future scarcity of tokens .
For example, Bitcoin allows a broadcast limited to 21 million tokens. On the contrary, in the case of the Ripple, whose emission of tokens is unlimited, its potential is based on its probable use in a large number of areas.
- Is the project team qualified?
We must also consider the team behind the cryptocurrency. If the project looks good, it could be that the developers are not up to the task and will involuntarily fail the project.
The motivation and the real reasons for the launch of the project are also to be carefully considered: who pays the developers, are there any conflicts of interest are their salaries transparent or did they create a cryptocurrency in the database? Single purpose to make a profit?
Learn about the background of the team and the relationship they have with the community (are they cordial and constructive?).
- Look at the trend of the course
Finally, if you really like a project, you will need to use technical analysis (at least a minimum) to know the current market trend.
The technical analysis of charts is strongly used in the short and medium terms among crypto-investors to predict the possible fluctuations of the prices of crypto-currencies.
However, if a project has completely conquered you and you are ready to immobilize some of your money (money that – we will never repeat it enough – you are ready to lose in full, the crypto universe is still very uncertain), you can dispense with this technical analysis.