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Today, there are so many cryptocurrencies and tokens on the crypto market that it can be difficult to choose what to invest in. In fact, it is enough to remember several main factors that should be paid attention to when choosing.
Profinvestment experts told how to choose prospective crypto-currencies, which are likely to grow and develop. However, the market is unpredictable, so it is impossible to accurately name the coins that will bring income.
Signs of a promising cryptocurrency
When choosing a project, you need to study and take into account the following factors:
- Technical documentation (White Paper) of the project. Includes detailed information about the coin, the mission of the developers, the plan to achieve these goals. In addition, it will not hurt to familiarize yourself with the legal information to make sure of the legality of the project and the services provided by it.
- Benefit to society. The technical document usually contains options for using the coin. If the project has the potential to become really useful and in demand for the industry, then this is a big plus. And vice versa - "useless" coins, such as memcoins, are unlikely to be able to grow well in price in the long term.
- Market capitalization and trading volumes. Market data is also important, although not as fundamental. Capitalization is considered the main factor showing the community's trust in a particular coin, and the coins included in the top 15 in terms of capitalization are the most promising for investment. The volume of asset trading on the crypto exchange is another clear indicator of interest.
- Technological solutions. This includes the blockchain on which the token or coin works, the token standard, the consensus algorithm with which currency can be mined, the network structure (base chain, side chains, validators, etc.).
Perhaps it will seem complicated to you, but it is not necessary to understand absolutely all technical points. It is important to at least know the basics, otherwise investing will be like playing roulette.
Basic principles of choice
When looking for a promising cryptocurrency for investment experts Profinvestment distinguish three main things.
First, DYOR. It means "do your own research." Carefully research all the features of the project before investing in it.
Second, think about long-term opportunities. Some coins can bring a short profit while they are talked about, but then they become useless.
Thirdly, nothing prevents you from combining different investment methods in your strategy and adding some riskier assets to your portfolio. The main thing is to assemble a correct and well-balanced portfolio structure, where losses from some assets will be balanced by profits from others.
