09 Jan How Do I Know Which Coins To Buy?
Posted at 14:00h in Uncategorized
- We do not offer financial advice, however we have a framework which we believe will stand you in good stead when making your choice in which coins to invest in.
- Does the coin solve a real-world problem?
We need to determine whether there is an actual need and demand for the coin. For a coin to be sustainable and have a long-term future there must be a great demand for its product
- Who are they partnering with?
There must be partnerships in place for a coin to be implemented in the real world. You may have the greatest digital asset on the market, however if there are no active industries partnering up the price of the coin will be merely based on speculation not utility. This will have a great impact in the long term, as many coins may go to zero and only the select few will be around in the next 5 years
- Who are the team behind the asset?
Many investors tend to ignore the team behind the crypto asset. A great team behind any business could be the reason for its success or failure. It is highly important to look at the credentials behind any cryptocurrency as this could play a major role on the development of the coin. The market is also very competitive with over 2500 coins available to investors at the time of writing. Therefore, it maybe a matter of survival of the fittest when this industry matures and weaker coins get dumped and bottom out.
- How long has the coin been on the market for?
It may be useful to long at how the coin has evolved through its history. Many coins have an annual plan in which they set deadlines and targets for growth. It would be a very prudent approach to see if these were met when looking at future projects the asset has in place. The coins that tend to hit these targets on a regular basis, tend to be the coins that show the highest price growth based on historical data.
- Is the price of the coin solely based on Bitcoins performance?
By looking at previous bull and bear markets, the majority of digital assets simply mirror Bitcoins chart patterns. It is key for a project to be self-sustainable in the long term. For this to occur the coin must be able to break away from Bitcoins price activity. This is known in the industry as decoupling. Picking the coins with the greatest chance of decoupling could be a factor on its long term growth and survival.