With the recent explosion of cryptocurrency, it can be challenging to know which coin is worth investing in. There are so many options, and new coins are being launched daily! This article will outline six critical criteria you should use when deciding whether or not to invest in a specific coin. If you follow these guidelines, your investment decision will become much easier.
1. What Function the Coin Serves
Many coins exist solely for hype, and they don’t have any purpose besides making money for their founders. It would be best to avoid these types of currencies at all costs! By contrast, some cryptocurrencies serve an actual purpose in society. For example, Ethereum is designed to serve as a backbone for decentralized applications, which means that the coin will continue to have value as long as people use these apps.
This criterion is crucial to the success of your investment. If you consider investing in a new coin, make sure it has some utility or purpose.
2. The Coin’s Circulating Supply
The number of coins in circulation will directly affect the price per coin. If there are too many tokens on the market, this could push down prices and make your investment worthless. The best types of cryptocurrencies to invest in have a small circulating supply (between 30-50 million), which means you can get more for your money. Financial gurus at https://www.cryptoprofitcalculator.com advise that when you compare the market caps of different coins, try to find one with a lower market cap and higher circulating supply. This will give you a better return on investment in the long run; you can use a crypto profit calculator.
When a coin has a high circulating supply, there will be less demand for each token. This, in turn, will lead to a lower price per coin. Make sure that you invest your money into a cryptocurrency with a low circulating supply, which will ensure that the price of each token remains high.
3. The Coin’s Team Should Be Reputable and Experienced
One of the most important things you can consider before investing in a coin is its team. Many coins, especially newer ones, are not backed by groups with experience with blockchain technology or cryptocurrency development. It’s effortless for an inexperienced person to launch their own “coin,” and it almost always results in disaster when this happens.
It’s essential to do your research, asking questions like how does coin sorter & counter work? And ensure that the developers are active and have a good track record of releasing quality products. A good coin will have an enthusiastic and dedicated development team regularly implementing new updates onto their chain! Your potential investment could be left without this functionality as newer coins come out with more advanced technology. If you can’t find any information about the team, it’s probably best to stay away from that coin.
4. Consider the Market Cap of the Coin
Market cap is the total amount of money invested in this coin. Many new coins launched have high market caps, but they don’t have any backers, meaning that the price per token will eventually drop to practically nothing!
It’s essential to make sure that you invest your money into a cryptocurrency whose market cap is reasonable. If the market cap is too high, it’s probably because no one has invested in that coin yet.
5. Look at the Coin’s Roadmap
When considering investing in a new cryptocurrency, it is essential to look at its roadmap. This document will outline all of the planned future developments for the coin. By looking at this information, you can get a sense of how serious the developers are about their projects and whether or not they have a solid plan for the future. It also allows you to get a sense of how much attention the coin is getting and whether or not it’s growing in popularity.
6. The Coin Should Be Cross-platform Compatible
It means that you can use the coin on various platforms, such as Windows, macOS, Linux mobile devices, computers, and even gaming consoles. By investing in a cross-platform compatible currency, you’ll increase the likelihood that you will be able to use it in the future, thus increasing its value. For example, Ethereum is compatible with both Windows and Mac operating systems.
To invest in a coin that has the potential to increase in value, you should make sure it’s backed by a dynamic development team who are regularly implementing new updates onto their chain. You also need to ensure that the market cap is low and that there isn’t too much of the token on the market – this will lead to higher prices per coin! Finally, consider investing in a cross-platform compatible coin growing in popularity.
