How To Research and Find High-Potential Altcoins (How To Judge The Potential of an Altcoin)
If you’re new to the crypto market, you must often wonder whether to invest in altcoins or bitcoin or both. Well, for that question, I have only one answer – invest in both. While bitcoin investment will give your funds a strong boost, altcoins, on the other hand, are profitable for long term benefits, depending on which altcoin you invest in.
While most of the existing investors will suggest you to build and maintain a diverse portfolio of cryptocurrencies, only a few of them can tell you the secret of finding the right altcoins to invest in.
When you’re planning to invest in cryptocurrencies, you have two major options – bitcoin and other coins. And to be honest, it’s not going to be an easy task to choose from those other coins (altcoins). For one, there are too many altcoins to choose from. If history is to be believed, most of the altcoins that exist today will not see any real projects.
So, when you go out and try to search for an altcoin to invest in, be sure to keep these things in mind.
Research the coin
Before investing in any altcoin, you should do a lot of digging around, irrespective of whether you’re a beginner or have experience in the crypto space.
The best way to research an altcoin is to try and monitor the project behind. What technology does the coin use, what does it have to offer, what problem does it try to solve, does the project has any functional software, etc. Ask all these questions to yourself and the project team before you decide to become a part of it.
Start with the project idea. If the idea behind a project is strong, the chances are that the dev team is actually serious about creating it. Check if the idea is feasible or useful in the present scenario, and how.
Take TTN, for example. The Titan coin is a digital payment currency, same as bitcoin and many others. But their blockchain is more powerful and faster, as it employs hybrid PoS/PoW consensus along with SHA265 security. Then, there are Titanprojects, a bunch of apps that aim to increase the utility of the coin.
The technology and idea behind a project can tell a lot about the future of the associated coin.
If you like the idea of a new coin/project, the next step is to look into its reviews. See if any reputed investor or industry expert has written or talked about the project or coin. If people are saying good things about a coin, the chances are that the coin is actually good and worth your time. However, there is no lack of fake reviews and promotions, so be wise in your selection.
The next thing I would be looking for is the team or developers behind the coin. I will even try to get in touch with the team, if possible, and put forth my queries to be answered by them. Research about the team and get to know individual members, their backgrounds, skills, expertise, etc. to figure out their ability to develop the product.
Ask the same questions that I mentioned above to the project team in order to get a better idea of the project and why you should invest in it.
Another great way to find out the worth of an altcoin is by its popularity. The more popular a coin is, the more are the chances of it being legit. It’s all about the concept and technical part of the project.
If a coin is popular on top listing sites such as CoinMarketCap has a good enough retracement percentage, it should be worth your money.
The price of a new cryptocurrency is decided based on its total supply and according to the purpose that the coin serves. The coin price to total supply ratio can help you figure out whether a coin is undervalued or overvalued.
Besides these things, you can (and should) definitely consider other more-obvious things such as project whitepaper, timeline, website, etc. before investing in an altcoin. The potential of an altcoin can be rightly determined by the development of its project. If there is, in fact, a project under development, you should try to explore more about it.