Cryptocurrencies are developing rapidly. Today, these digital assets are used for everything. You can even make a deposit with crypto and get the best live casino offers. These tips will help you choose the right coin.
To identify a prospective cryptocurrency, you need to pay attention to its function. The function of a project must be clear and understandable, even if it is a complex technology or a system that is difficult to develop. The technology or system must have a real application and solve real problems both in the crypto market and in other areas.
Another important attribute is the team behind the project. Sometimes among the representatives you can see former employees of companies like Microsoft, Google, Goldman Sachs, or JPMorgan Chase. But work experience varies – you can work as a senior assistant to a junior janitor or develop complex products, the expert explained. So check exactly what positions project members have held and what products they have developed before.
Known and proven specialists, as in any other field, are not many. So, projects with big plans usually try to attract famous developers because they know that this will draw the attention of the crypto community.
In order to define a successful cryptocurrency, it is advisable to understand programming. At the same time, it is important to follow what the project team publishes on GitHub. This is a kind of social network for developers, where they publish created solutions and share the results of the project development.
Many projects have open source code. By studying it, as well as the activity of the developers, it is possible to understand whether there is dynamics in the development of the project and how positive it is.
The peculiarity of the crypto market is that an analyst must be more than just a financial expert. Here it is not enough to be able to understand the financial market, valuation methodologies, the possible value and liquidity of the asset. Cryptocurrencies often include different components written in different languages. An expert must be immersed in both areas to correctly evaluate new projects.
How Much to Invest
Any project can seem extremely promising. But this does not guarantee its success in the future. The idea may be poorly implemented, fail to find application, fade out against the competition or even turn out to be a product of fraud. So, such investments are of a high-risk nature.
10-20% may be set aside in an investment portfolio for venture capital investments. It is possible to invest a few percent in each interesting project, thus assembling a portfolio of a dozen altcoins or other high-risk instruments.
You can allocate up to 25% of your investment portfolio to buy the tokens of projects that were launched during the ICO and continue to operate and develop to this day. They have survived all the ups and downs of the industry in recent years. Such projects are more reliable and have real potential for development and growth, the expert believes.