Cryptocurrencies are really not a new thing although almost everyone has been talking about them for over the last year or so. The last year has been full of questions and surprises with several different cryptocurrency ICO’s (initial coin offering), so choosing the right Cryptocurrency has not been an easy task. The first Cryptocurrency came on the scene about 9 years ago and has valued far over 100,000% to date. Many other cryptocurrencies have rapidly devalued and never recovered, still, cryptocurrencies are here to stay, although many of them are not expected to not stick around forever. If you are starting your investments in the cryptocurrency world, this guide should put you up to speed and demystify the future of how most financial transactions will occur and how to understand which cryptocurrency is the best for you.
Make sure you get onboard with cryptocurrency investments in 2021, since 2020 passed without any big crypto movements. In order to correctly invest in a worthwhile cryptocurrency, here are some very important steps and actions you should cover to make sure you are on the right path.
There are currently so many cryptocurrencies available to invest in. The crypto market is considered one of the best markets to be in. To keep tabs on the developing value of cryptocurrencies, you should always use site that monitors all cryptocurrency prices in real time. One of the key factors to take into account is by comparing the 24hrs volume traded, the present market capitalization, as well as the price and total supply of the coin. Above all, one must take into account the activities and roadmap of the developers and analyze and decide if they are going to keep the coin relevant and sought for in the future as well as all its applications and the benefits it brings to its holders.
By effectively monitoring the key characteristics of cryptocurrencies we just covered, you should be able to compare them in a number of different ways, which should help you select the best cryptocurrency investment opportunities.
One of the most important criteria of a cryptocurrency is how much it is being traded over the last 24 hours. The larger volume traded, the more solid the coin is and the better your investment is likely to be. Naturally, the higher the value the coin is traded at in the last 24 hours is another solid factor to take into account as well. These factors can be used to demonstrate how much the coin is considered to be trustworthy by investors. Low trading volumes are almost always considered red flags, which should be avoided most of the time
In order to determine the liquidity of any cryptocurrency, you should check its volume percentage as well as its BTC volume. A cryptocurrency’s liquid asset is proportional to its wash trading. Make sure you use exchanges that don’t inflate their volumes. Exchanges with larger trade volumes usually end up attracting more traders than others, so be wary of exchanges that artificially inflate their trading volumes. If you notice there is a significant increase without an increase in the price of a cryptocurrency, pay attention and make sure the exchange is really what it says it is.
The market capitalization (aka: market cap) of a coin is calculated by how many coins are available at that time by the current market price. This does not include the future coins that have yet to be mined. When you are deciding which coin to invest in, make sure you calculate the real value of the coin by not including the coins that will still be mined. Also consider that there are coins that can be mined and coins that cannot be mined. This will affect the value of a coin over time.
The price a coin is at now is not the only factor to be taken into account. More important than this is: what will the coin do in the future and what kind of technology can be integrated for its use. A low-priced cryptocurrency is not the sole criteria for analysis.
A non-mineable coin is at its total supply and a mineable coin will face a bit of inflation but should also attract new users as well as a increase to its value.
Looking at a coin in great details as to what its developers are setting out to do and what they have done so far. Almost all cryptocurrencies place ads on the same platforms and display the full roadmap details on its coin website, so the roadmap of a cryptocurrency should be considered an important criteria before investing.
The cryptocurrency universe is seen as being a risky market to get into by many, but those who follow the steps described above are able to lower the risk and potentially avoid scams. Keep in mind that it is important to invest in coins that are adding value to themselves by what they do and offer their holders and investors. Take measures to be safe with your passwords and do not provide them to anyone. If you follow the points covered in this article and use your common sense and precaution, you should be able to make good cryptocurrency investments in 2021.