In our previous post, we gave a little tutorial on how to trade cryptocurrencies. But before you decide on which to trade, you have to decide on the right crypto to pick. This post gives an insight into things to look at before making that decision.
Over the years, cryptocurrency has been continuously named one of the best investment options in the world. This is because, while it might be risky, many people have earned profits from investing in cryptocurrency.
The first and most crucial step in reducing the risks associated with investing in cryptocurrency is choosing the right coins. This article will teach you how to choose the right cryptocurrency and make smart investments.
Market capitalization
Ranking cryptocurrencies based on market capitalization is one of the most important ways to select them for investments. Bitcoin has the highest market cap of less than 1 trillion, followed by Ethereum.
Total coins to be mined
You have to check if the cryptocurrency will be in limited supply. You must also consider the number of coins already in circulation to help make your decisions.
Project Website and Social Media
Check the crypto project’s website and social media channels to get a sense of how socially active the project is and gain greater insight into the project, the team, and its community. The project website should be easy-to-navigate, functional, and openly share details about the project, the team behind it, and its white paper and roadmap.
The Team
You’ll also want to look at the team’s prior experience in the crypto market and other projects they’ve worked on. For example, you’ll want to know if this is their first project or if they have a solid history of developing successful crypto projects.
White Paper
Every cryptocurrency in this world has a white paper that lists all its details, from its date of creation, its purpose, the technology used, to the quantity that has been mined. It also mentions the aims and objectives of the coin creators. If the details of the white paper are complete and realistic, then you can go ahead to invest.
Major Investors
Do the crypto projects have investors? If yes, do thorough research on who they are and their integrity. If not, then you shouldn’t invest in the project yet. The chances of a one-person crypto project plummeting and ending is higher than when different investors are involved. It’s a good sign if well-known investment firms or big-time investors have already invested in the project. It means they’ve done their due diligence and believe in the project’s long-term viability.
The Community
For many crypto projects, the community supporting the project can make or break the crypto’s potential. The enthusiasm and size of the community play a significant role in the initial and continued success of the project. However, when assessing a coin or token, you should be careful with this factor. More often than not, the hype of a new coin exceeds and overtakes a project’s actual utility or value, which is why you shouldn’t invest in a coin or token solely based on hype and should take the time to become familiar with all the factors above before putting too much stock in its community.
Best cryptocurrency to invest in 2022
The top 10 best cryptocurrencies in 2022 with the highest market cap are listed below.
- Bitcoin (BTC)
- Ethereum (ETH)
- Tether (USDT)
- US Dollar coin (USDC)
- Binance coin (BNB)
- XRP (XRP)
- Solana (SOL)
- Cardano (ADA)
- Polkadot (DOT)
- Dogecoin (DOGE)
