Keep these 15 things in mind before you FOMO (Fear of Missing Out) buy a top trending cryptocurrency.
It is your hard earned money after all, treat it with utmost care. OK, so let's start point wise:-
(1) Visit the Website of the Cryptocurrency project
It doesn't take much work to find the website of a cryptocurrency project. Just go to CoinMarketCap.com enter the coin in the search field and press enter. On the left hand side under coin's Rank, you can find the link to the website of the cryptocurrency project. Alternatively, you can also google it. Personally, I prefer the websites listed on CoinMarketCap as I trust their due diligence. Plus, it is easier and also I have less of a chance of ending up on a phishing website.
(2) Read about the Founder and Team Members
Dig up on the Founder(Bitcoin is an exception, no one knows who Satoshi Nakamoto is). This is the most important thing. Look at his past record and projects. Do the same for every team member as well. Do some ground work.
(3) Check Founder/Team Member's Social Media Accounts and Posts
Visit the founder's and each team member's Twitter accounts(social media accounts) and see what they tweet or post. View a video of them talking, listen to their podcast if available. Also note their body language. After doing all this, ask yourself, do you find them trustworthy?
(4) Read the Whitepaper in detail
White paper is an official document usually issued by new cryptocurrency/blockchain projects informing the reader about the new technology, methodology, product or service being launched. This is usually published on their website. Read that at least a couple of times. I know sometimes it is difficult to understand as there are many technical details and jargons in it, but by reading it over a couple of times, you would get a fair idea as to what is the intent of the project.
(5) Focus on the Tokenomics (in the whitepaper)
Tokenomics or the token economics will tell you in detail as to what is the function of the coin/token/cryptocurrency in the project. Note how demand is generated for the token or what are it's use cases?
(6) Total Supply/ Inflation rate and Governance
Pay careful attention to the Total Supply of the coin in question. Also find out about how the supply of the coin will hit the market. Also, pay attention to the inflation rate and the governance mechanism.
(7) Check the coin's Historical Price Movement
You can check the historical price movement of any coin with the charts available at CoinMarketCap. Check the monthly/ yearly and year to date performance of the coin and check whether the the coin has under performed or out performed the market and/or its peers? Is the chart trending upwards or downwards?
(8) Check the Size of the Coin's Community on Social media platforms.
In cryptocurrencies, communities are important just as important as the network effect. Or one can say that communities are a part of the Network Effect. A cryptocurrency/token that has a larger community holds more potential. Check the various links to the social media accounts of the coin available on its website.
(9) Check No. of Holders to date
When you go and check the number of holders of a coin, you get an estimation of as to how many people believe or are betting on the project. Like for example, to check the number of holders of any ERC20 token on ethereum, you can go to etherscan.io enter the ERC20 coin name and it will show you the number of holders of that coin.
(10) Community Vibe
Apart from this, check the vibes of the people posting about the coin on social media. Are their posts unrealistically bullish? Are most posts from anonymous accounts? Check for overall quality profiles posting. OR you can use any other metric you think is suitable for you or you can just trust your gut feeling.
(11) Keep an eye on the Developments and Updates timeline
Remember, investing is done on future prospects and potential and not necessarily on past performances. A lot of crypto projects have a timeline of events or updates posted on their website. Check if the project follows that timeline and delivers it strictly or not.
(12) Holding period.
Before you buy, decide how long can you hold a coin without the need for cashing it out. It is a good practice to decide your holding period in advance. You must know whether you are buying for the short term, medium term or long term.
(13) Check number and quality of Exchange Listings
Check as to how many popular exchanges is a coin listed on. More listing on bigger exchanges makes the coin both liquid and reaches a wider investor base.
(14) Keep a well diversified portfolio
Keep your portfolio well diversified. Never put all your eggs in one basket. You can have a portfolio of about 8-10 coins, that has large market-cap coins, mid market-cap coins and small market-cap coins. Always hold mostly large-caps, some mid-caps and a handful of small cap coins.
(15) Don't buy because someone gave you a tip.
Do your own research and follow your gut feeling. Do not buy based on rumors or tips. Even at times news based buying is harmful as traders usually buy the positive news rumor and Sell on the actual release of the news.
Have more tips to add to the list? Comment below:
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Great article, I added it to my bookmarks ;)
I am glad you liked it :)
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STOPTo support your work, I also upvoted your post!
Do not miss the last post from @hivebuzz:
FOMO can be such a creaitive - but also a toxic - energy. Because we are swept away with emotive energy and the desire to belong, and turn OFF our critical faculties. I personally appreciated this list and see, yes, one DOES get back to content discovered on twitter. Eventually. 😆
Thank you! I am glad you had a read.
I agree FOMO can be both creative and toxic.
Happy to connect here from Twitter
Have a good day!
#POSH
Thank you :)
HEY, consider joining the HODL community, as this type of content is rewarded in there: https://peakd.com/c/hive-126009/created
Thank you
Joined :)
then once you make some new friends in there (commenting on others posts), you might invite them to your own community...but if the topic of your community is so similar to the HODL one, then it might not be popular.
good boy!