Cryptocurrency Investment Tips
Cryptocurrency markets started in 2009 when ‘Satoshi Nakamoto’ invented Bitcoin. Back then, investing in cryptocurrency was not as complex because there were only a handful of options to choose from.
However, as time passed more and more coins came onto the market. As of today, there are about two thousand different cryptocurrencies, therefore choosing the right cryptocurrency to invest in is vital. This article is going to help you understand five factors to consider before investing in any cryptocurrency.
- Do your own research: This is the most basic rule for budding cryptocurrency investors. It is very important that you understand the use-case of the coin in the real world and the problems it solves. To conduct your own research, you should review the white paper in order to determine the actual functionality of the coin. Since the internet itself is a free market forum, there are numerous blogs promoting each and every initial coin offering, or ICO, that comes out. Therefore, even the bad ideas are raising money. Thus, it is very important to do your own research about a project before investing.
- Do not give in to FOMO (Fear of missing out): This is the most common mistake that new investors make. Very often new investors buy cryptocurrency based on the hype. It is this fear of missing out on an opportunity that leads to their downfall. Crypto assets always receive their own share of hype. However, as soon as the hype disappears, the value of the coin also begins to reside.
- Do not trust the news media: The crypto market is highly speculative. This is why any news related to crypto affects its price drastically. There are many people who take advantage of this and try to twist the news for their benefit. One such incident was the South Korean crypto ban. This news spread like wildfire and soon all the crypto assets began to fall in price. It was later announced that the KYC rules were being made stricter and there would be no ban of Bitcoin. The price soon recovered. This just goes on to show how much influence the media has over the crypto price.
- Review the project roadmap: Before investing in any project, check the roadmap to see if all the past features on the roadmap have been implemented on time. By looking at the roadmap you not only can make sure the project is legit but you can also review the future plans for the project.
- The team behind the project: This probably is the most important aspect to consider. A project that has a good team is more likely to succeed than one that does not have a good team. It is important to check the profile of the team members in order to determine if they are up for the challenge.
Cryptocurrency, in general, has proven to be a great investment for many. However, if you don't invest in the right projects then the cryptocurrency market can be equally as devastating. Hence, it is very important to do a lot of research before buying any coin. By giving way for the hype, you might be able to make some short-term gains. However, over a longer run, you must always do research in order to determine for yourself if the particular project is going to be successful or not.