When first getting into the cryptocurrency industry, it is quite hard to start using digital assets. You can see that there is a vast range of coins (according to CoinMarketCap, 9169 cryptocurrencies are available). Moreover, it can be hard to decide if it is a coin for a long-term or a short-term investment.
Check out some useful tips about how to research cryptocurrency. See everything you need to know about seeking the most suitable coin for investment. Let’s dig in.
Key Things That You Should Remember Before Investing
The first thing you should know before cryptocurrency research is that all investments will have their pros and cons. You should prepare for extreme volatility in this ecosystem. Just imagine that cryptocurrencies have a chance to surge up to 40-50% in a single day.
You should not get upset if things are harder at the beginning. All you need to do a little bit of research first. You will boost your skills and will be able to build your own investment strategy over time if you put some effort into it.
How Do You Go On With Cryptocurrency Research?
If you’re wondering which cryptocurrency to invest in, you have to realize that this is all about the fundamentals.
We should admit that there is now a wealth of information online about cryptocurrencies and different aspects of every coin. Finding the right information about digital assets can be a real challenge for a newbie. And here are a few reasons for it:
- It is difficult to define whether the source is reliable or not;
- Either the information does not exist yet or it is too hard to find;
- It takes a lot of time to read, understand and learn available information.
When researching anything about crypto, you should start with a set of questions that need answers. We have prepared for you a list below that should be helpful, and act as a framework for your research.
Use this as a checklist whenever you are seeking new cryptocurrencies that you would like to add to your portfolio.
Step #1: Find Out All the Fundamental Analysis Stats
It is not a secret that even in the investment industry, knowledge is power. Before you will be able to decide if a currency is worth buying or not, you should find a place to get a full analysis.
Each coin has multiple ways of distributing information about it. Among them we can highlight:
- Its official website. You will find all important things about its team, upcoming updates, and current collaborations;
- The whitepaper. It is the most important source of information about the coin. A whitepaper is created by the founders and developers of a coin in order to show its abilities and advantages. But instead of pushing emotional buttons, they provide facts, diagrams, stats, and quotes. Whitepapers are written by technically focused individuals for technically interested customers;
- Social media channels on Twitter, Facebook, and Reddit;
- Strong community with loyal fans on Bitcoin Talk, Telegram, etc.
Top Questions About the Coin That You Should Consider
Touching the following points when checking fundamental information about a cryptocurrency will help you to score if it a good or bad investment:
- Is a firm transparent? It is vital to find out details about the project easily.
- When was the coin rolled out?
- What is the organizational structure?
- Does this project have a transparent system and clear goals?
- Is there an experienced team behind the cryptocurrency?
- Are they ready to cover all the needs to make the coin successful in the near future?
- Is this coin available on different exchanges?
- Did you find a clear and up-to-date roadmap?
- Is it active on GitHub? Software projects should be active there.
- Did they have an initial coin offering?
- Is the project active on social media channels?
- Are there any upcoming events, like forks, that could affect its price?
If we compare to the other assets, the cryptocurrency market has evolved rapidly over the course of its short lifespan.
Since the release of Bitcoin to the public in January 2009, more than 9000 cryptocurrencies have been implemented. Alas, most of these coins had mediocre success.
Unfortunately, most people do not do this and they put themselves in a dangerous situation. In uncertainty, when finding relevant information is uneasy, they might resort to watching and mimicking other, presumably better informed, investors’ decisions. And it leads to huge mistakes. Without any research, they do not have a financial strategy and invest in cryptocurrencies that simply have no solid background.
Yes, you can research background info on each cryptocurrency on their websites, threads on Reddit, and social media platforms. But this will take a lot of time and it is nearly impossible to compare assets correctly.
In order to check out all you want to know about the coin, you have to do hours of research. So, here we should pay close attention to free resources that will help you with this.
Useful Websites for Your Fundamental Analysis
Among all free sources, you should try Blockdata and Amun. They provide high-quality and objective data about blockchain technology and the teams building it. Their reports have very visual and easy to grasp data points.
Regarding Amun, it gives reliable data and educational research reports as well. Its “State of Crypto” reports have vital information, such as ways to value Bitcoin or Ethereum and important news in the market.
Moreover, we should mention Binance research which provides quite impressive “institutional-grade” reports about different cryptocurrencies and the overall sphere.
Crypto Research Reports published every few months will show you the current data and situation within the market. As a great plus, it has interviews with popular investors, analysis, and full coin reviews that you should definitely check out.
Step #2: Cryptocurrencies in Numbers
The next step that you should take is to find out the economy of the currency, and all available “numbers” about its company. The total value and market cap of a coin are the results of investors voting with their wallets for the asset or against it.
Key Questions to Keep In Mind
Just take this checklist and find answers to the following questions:
- Does the business give insights into its costs?
- Can you find predictions about the financial and profit growth of the currency?
- What are its trading volume and market cap data right now and in the past?
- How volatile is a chosen cryptocurrency?
- What is its maximum growth during 7 days, a month, and a year?
- What is its emission rate? Is its inflation under control?
CoinMarketCap and the Way You Can Use It
In this case, you can try Coin Market Cap. Here you will see all the relevant and up-to-date information about a cryptocurrency. This website gives you quick access to data about a cryptocurrency’s price, volatility, market cap, percentage of the total market, and a lot of other useful details.
Have a Look at Costs and Investment Strategy
A company with its own cryptocurrency should be as transparent as possible.
Take a look at their website and see if they have a clear split of their costs and a well-defined financial plan.
For example, if a project and its team invest in a promotion more than in development, keep in mind that it can be a trap. You should not purchase these coins.
Learn More About Its Team
One of the top things you can research is the cryptocurrency’s team. In fact, researching and vetting the team behind a cryptocurrency is one of the most important factors you can look into. Because a team has the power to steer them to success or failure.
Beware of “Pump and Dump” Schemes
It is not a secret that there are criminals lurking around every corner. And though cryptocurrencies are relatively new, they are still prone to the same old types of fraud that have been around for years. One of these scams is the pump and dump schemes.
So, what does it mean? A “pump and dump” is the movement of a coin’s price, when it gets boosted and then crashes rapidly.
These projects are illegal on regulated cryptocurrency exchanges. However, the unregulated crypto field has provided a rich ground for fraud because users are sure they will not be easily caught by financial authorities.
At the center of pump and dump schemes is a team of tech-abled, motivated, and organized fraudsters. They operate from different points to make their project look genuine.
These fraudsters often include investors in a project. They provide funding to purchase the coin and raise the demand. If the cryptocurrency selected is a low-volume type asset, purchasing most of them allows fraudsters to control the supply. In addition, they can regulate its price.
As the inner team focuses on creating artificial supply, another team is working hard to demonstrate the best sides of their coin. They use social media platforms such as Telegram, Facebook, and Twitter.
Scammers even form communities and use influencer marketers to spread the word about their projects.
Investors and traders are willing to buy this currency, and once fraudsters sell all their tokens, the hype and demand fade away. This crypto has no future. The coin suddenly slumps as its HODLers realize it was a scam, but it is too late!
So, you should avoid panicking and buying a coin that has hype around it, but historically had a poor performance.
Step #3: Join Its Online Community and Read Comments
Crypto marketing plays a key role for companies in this sphere if they want to grow and prosper.
When it comes to ICO’s and cryptocurrencies, building an effective marketing strategy for a project and gaining trust are even more crucial.
Checklist About the Community of the Preferred Currency
Researching this will help you answer questions like:
- Is this project popular on social media channels?
- Can you find negative reviews about the coin?
- Are they sharing thoughts on their development often enough?
- Does the team of the project help and collaborate with its consumers on social media?
- What is the total size of its community?
You should also check Google Trends if you need more information about its popularity.
If you already researched the fundamentals and economics of the coin, and all look strong. In addition, you have found that the technology behind it offers unique features that are also applicable in multiple domains, it’s time to see if the coin and the project are popular within the cryptocurrency community.
Check Out Its Reputation
You should have a look at reviews and feedback from its consumers.
According to the survey conducted by Bright local, 91% of customers trust online reviews as much as personal recommendations. Moreover, 90% of consumers say positive comments have influenced their purchase decision.
User experience and functionalities are critical factors to consider, especially if starting to use altcoins for the first time. So, it’s important to check out reviews about a project in advance, and determine if a cryptocurrency is worth using.
Cryptocurrency Branding and Naming
You should also check projects, the coin’s branding, and the approach they have on it. Check out and see if there were any rebranding done because they are not uncommon in the crypto space as coins go through different stages in their development and market adoption.
For example, the Facebook-backed Libra Association is renaming itself to Diem. According to Reuters, the Libra currency is also now called Diem.
Please, keep in mind that frequent rebranding can mean one of two things. Its team is planning to change its strategy or it is trying to hide something from the community.
Another thing you should look out for is the media coverage the coin is getting and the conversations around subjects related to its brand and technology.
News and Reviews on Popular News Feeds and Websites
Positive mentions about a project in specific cryptocurrency-related websites such as Coindesk or Cointelegraph are very important.
Even more important if you see publications outside of the crypto space. If you see Forbes, Wall Street Journal, or Bloomberg giving good signals about a coin’s strength, growth and that means that there is mainstream interest in it.
I Have Learned About Cryptocurrencies. What Is Next?
So, right now you know how to research cryptocurrency. Found a project and crypto for a long-term or a short-term investment. It is time to make your first step towards investing your money. We have a solution that will definitely help you. Have a look at NeuronEx to buy your first asset.
NeuronEx Exchange: How Can I Make a Transaction?
This is a platform designed for financial transactions: for crypto to fiat and crypto to crypto change. You can quickly and securely change cryptocurrencies like Bitcoin or Ethereum right here. Its interface is very intuitive and its useful features make the purchasing process smoother than ever before.
As a great plus, NeuronEx also has an app accessible for Android and iOS customers. When it comes to mobility and convenience, it is incredibly trendy among users. Track prices, use a converter, and manage your budget all from the palm of your hand.
This service supports
But that is not all. The NeuronEx team is working hard to implement new coins. So, the best is yet to come. EOS, Bitcoin Cash, Bitcoin SV, Tether (EURT, USD, CNHT, XAUT) are coming soon.
Payment Solutions on NeuronEx
In addition, it offers more than 200 payment methods. Among them are credit cards, bank transfers, and debit cards (Visa and Mastercard are both accepted).
We have a hack for you: you can get 50% of any commissions when paying with NRON currency. Sounds great, right?
How to Buy a Currency Here?
You may utilize a converter, available here. Just sign up for free, choose the most suitable type from the list of payment methods, and make your first transaction. Fill the form, enter the amount, and check out cryptocurrency price in real-time mode.
As a great plus, it has no hidden fee for cryptocurrency purchases. So you can change coins in a matter of minutes and enjoy the rock-bottom commission.
You need a wallet for your money no matter if you prefer trading or HODLing money.
Simply put, once you have gained a coin on an exchange, you will need a safe place to store your holdings. Using an online wallet, instead of storing your crypto coins with an exchange, gives you greater control over your virtual wealth.
Cryptocurrency wallets provide users with a digital solution for securely storing money and managing digital coins. These wallets allow users to send and receive coins, store and spend, and also trade cryptocurrencies.
So, you should also try an online wallet, accessible on NeuronEx.
It is a great place to store your money safely and securely. You will be able to access and manage your portfolio in a real-time mode and control your digital assets. Make transactions anonymously, convert and send cryptocurrencies all in one place.
So, no time for waiting. Sign up for free and enjoy everything it has to offer.