Nothing would beat learning and listening to experts about cryptocurrency; by doing it yourself, you would have the perfect grasp on what you might be taking yourself into. The history and basic background of your chosen cryptocurrency should be analysed before making any decision, as well as its circulation and market capitalisation, which are also to look out for. Cryptocurrencies over the top value are something you should not obsess about or get stuck on. Analysing cryptocurrencies highs and lows, people also check their reputation and overall stability, which might get you thinking about spending.
A lot of people nowadays stake in cryptocurrency without knowing what they are getting into, which might lead to potential loss and scams. Cryptocurrency is not a game of luck; it is a real thing that could be part of our lives. This is a common dilemma for those new to cryptocurrency, expecting their return on investment immediately and not even analysing how cryptocurrencies work. However, it is understood that cryptocurrency is still new to the world, and not everyone would understand it right away, considering its complexities and unfamiliarity.
Table of Contents
Whitepaper
A white paper is a general overview or framework about a certain cryptocurrency, all of the existing and legitimate crypto has a white paper. However, not all decentralised currencies have this; some have a Blackpaper, video explainer or a presentation instead. All of the information is made public to help investors understand the purpose of a certain cryptocurrency, its system on how it would run on the network, its market cap and much other information related to the cryptocurrency; it also highlights the financial and technical aspects of the crypto. Normally this is what you should read first and analyse; since its purpose is to attract potential investors, it would usually detail their edge with their competitor here as well.
According to Eccolo Media’s research in 2013, only 49% of potential investors analyse a cryptos white paper before investing in it.
The most popular whitepaper is still made by the anonymous Satoshi Nakamoto, entitled Bitcoin: A peer to peer Electronic Cash system. It caused a catalyst in the finance industry, followed by approximately 1,600 kinds of cryptocurrency as well as the blockchain technology that changed the financial game as well.
Market Cap
A market cap of a cryptocurrency can say a lot about the crypto itself. It can also indicate its readiness on a large volume of investors. Generally, the market cap of a cryptocurrency is its total value, it can change based on the circulating coins in its system, and in the crypto industry, it changes almost every second.
For an analogy, in stock market analysing its market capitalisation can be grouped into three categories such as small-cap, mid-cap or large-cap. This usually determines the company’s value.
Reliability/ Legitimacy
With cryptocurrency’s potentials and value, it is not a surprise that there are almost 1,600 in existence right now, in which each has a different purpose and goal. That is why one should not stake in their money right away when they see an ICO or Initial Coin Offering; one must analyse the crypto of their choice and make sure it is not a scam for money.
Timing
Cryptocurrency’s value changes from time to time; sometimes, it happens rapidly and can wildly go up or low. That is why timing on trading should be crucial; one should not get blinded by the sudden surge of a crypto’s value. One must assess when it goes up or when it goes down; nevertheless, when a crypto’s value goes down is somehow not a bad thing. Experts say that it might be the best time to buy crypto so you can have more, and when its value goes back up, one can notice that their investment gained more value, over when a crypto’s value is up, and it becomes stagnant for a time. If you think this is the best time for you to invest, trade on Bitcoin Pro.
Longevity
In any aspect of the business, if something is consistent and don’t have the need to shut down, it basically means it is doing good in the industry, and that applies the same to cryptocurrency. However, this is also the challenge; as for cryptocurrency, longevity usually turns up its value; the longer they exist, it means more chance of having a high value in which means it is much more expensive to get than the other crypto. It is a love-hate relationship for this one because most would definitely invest more in the older crypto’s than the other, but considering the rapid changes in cryptocurrency’s value, it is much riskier to spend on. Unlike when you choose to trade in some newer crypto’s, you’ll be spending less, but the risk for it is hoping that your chosen crypto stays in the game.
Assets
Experts have this 5% rule in investing, which means one should invest just 5% of their total assets, considering cryptocurrency’s volatility. Meaning if you have $5000, you should just invest $250 in cryptocurrency. Although there are techniques in which people divide their investments on different crypto’s to avoid loss, this is a wise move since every other crypto have different values.
Knowledge
The cryptocurrency industry is a complex industry to understand since it is involved in both technology and finance. So before jumping into the crypto industry, one must make sure to at least have a general idea of it. Make sure to read some articles and listen to the expert about this; doing so might get you started on your plans with e. If ever possible, it is also helpful to ask those who already have cryptocurrency since they experience first-hand the general feel of having one. Knowledge would be the most crucial part to consider before jumping into the industry; it is a general idea that we must know what we’re doing in order for us to succeed. Although no one can exactly say what will happen to cryptocurrency in the future, we must still listen to what experts have to say.
