When diving into the world of cryptocurrencies it is always essential to do some research beforehand. Asking questions and talking to people can bring about unreliable information, doing the research for yourself can improve not only your understanding of the market but other valuable information too.
Like how to spot an opportunity, or a trading hack you didn’t know you needed. In this piece, we’re exploring how to research cryptocurrency with strategies that help you to compare coins and make informed decisions.
How To Research Cryptocurrency
Below is a five-step guide on how to get familiar with a new cryptocurrency in the often intimidating 10,000+ strong market. Remember, these tools work together to give you a big picture and will rarely provide anything valuable when looked at in a singular fashion.
- Discover The Core Concepts Behind The Project
The first and arguably most important step is to first become familiar with what problem this cryptocurrency has been designed to solve. You will need to get to grips with the real-world functionality that the project provides. A great coin is ideally unique in its usability, and not a copy-paste-with-one-added-benefit version of another.
You will need to fully review their website and all material they have released, and yes, that includes the whitepaper. Look at who the project is being led by, what the roadmap is, how the information is presented, etc. Ideally, you want to distinguish whether the project is looking to and can solve a real-world problem, or is this just another means for the founders to make some money.
2. Check The Transaction Volume
Transaction volume illustrates the overall movement of the cryptocurrency from one address to another. This gives a good indication of how much liquidity the network holds, and ideally the more liquidity the better. Take a look at various exchanges or reputable tracking apps to get an overall view of the cryptocurrency’s transaction volume.
3. Observe What’s Happening On Social Media
This might sound like the last place to go and look for reliable information, but in fact it can tell you a lot about the project, how the public reacts to it, and what coin is attracting the masses.
Facebook provides two great options when it comes to staying up to date with the upcoming events and the latest news. Be sure to read the comments to get a sense of what the community sentiments are.
On Twitter more is more. Follow a wide range of crypto evangelists that are experts in their field, look for people that have influence over the market, but that also share insightful content. Think of researchers, accredited investors, financial analysts, and popular or celebrity traders.
Telegram provides a great means of staying up to date with trends, news, and market sentiment analysis. Ideally, look for the official group of the coin you’re looking into, and take what information feels valuable. If the chat is too optimistic, noisy or pessimistic, perhaps try to find another one dedicated to that coin or move on.
4. Research What’s Trending
Another slightly overlooked opportunity to generate research within the cryptocurrency market. Checking the number of people actively searching for a topic gives a good indication of the overall sentiment.
A project with a gradual increase in any of the above-mentioned tools points to a positive interest in the project.
5. Check Crypto-Related Forums
While reading content relating to the project can be informative, forums also provide their fair share of value. For starters, you are likely to come across educational content as well as be given the opportunity to engage with someone who might know more about the subject than you do.
Research Is Key
When it comes to investing, research is an integral part of the process. Use these points mentioned above to help you navigate the endeavour, and be sure to take a little from what each platform has to offer. When used together, these tools will give you valuable insight into any project’s potential. By doing the research you will hopefully make better investment decisions and as a result of this - better profits.