How to Pick a Winning Cryptocurrency

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When asset prices are down you can react in two ways as an investor. The first is to lie down on the floor, curl up in a ball, put your thumb in your mouth, and cry... or, you can find opportunities. I prefer the second and see a bear market as a chance to take the stable coins or cash I have patiently waiting on the sideline, and put it into some projects I believe will have a long-term future.

Sure I have my long-term Bitcoin (BTC) and Ethereum (ETH) holdings and I'll add to those as cheaply as I can, but why not hedge things out. But then comes the real challenge, with so many new coins all the time how do you find the ones that are worth it and have a ripe future? As with any investment, nothing is guaranteed, but you can always make a more educated guess and improve your chances by doing proper due diligence and looking for these key factors in a crypto's success.

1. Branding and Aesthetic 

The crypto world can be quite overwhelming due to the sheer number of coins and the fact that many are so good at branding and attractive design. It may seem shallow to list this as the first thing to look for in a token, but it literally is the first thing you see. If a coin isn't eye-catching it is far more likely to be lost to obscurity. Take as example Eos (EOS), they have one of the largest market cap's and have only just released their testnet, but the logo looks super cool, it has a snappy name and the memorable slogan "decentralize everything". Ooh, I'm going to go out and decentralize everything right now!

2. Use Case

After finding an attractive crypto the question that should naturally follow is, "What's it do?" If the answer is nothing, you can probably write that one off. Beyond working as a medium of exchange Ethereum (ETH) allows developers to build applications and their own security or utility tokens on its network. Or you have a coin like Ontology (ONT) that is made to facilitate decentralized trust networks almost instantly that would normally take years to build. These are use cases, they have an application and they are good ones. So now that you know the coin can or will do something and you feel confident it will be useful, it's time move on to the next item on the checklist.

3. The Team

Beyond the enigmatic Bitcoin (BTC) creator Satoshi, anonymity in developers has gone to the wayside. When there are close to 2000 cryptocurrencies on the market, it becomes a lot more important to vet the team behind your potential investment. Do they have a background in technology and finances? Do they have team members specialized for their tokens purpose? These are all important questions. Beyond that, the team needs to be active as well as have a good P.R. department and support.

Communication is of the utmost importance as evidenced by leaders such as Binance's (BNB) C.E.O, Chang Zhao and Ethereum's (ETH) creator, Vitalik Buterin. Their frequent appearances and updates are reassuring to investors and developers, demonstrating transparency and a vested interest in their projects. If a team is quiet and seemingly inactive it has probably become vaporware or may have just flat out been a scam in the first place. This doesn't apply solely to the cryptosphere, but it's much, much, more important due to the unregulated nature of such projects.

When you are searching for coins to add to your portfolio keep these things in mind and take the time to research or, maybe even reach out to, the projects and their teams. These factors will help you lock in the long-term winners and rule out the coins that are nothing more than a pump and dump scheme. Good luck and happy hunting.

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Disclosure:

I have received no additional compensation other than the Ethereum that Hade Technologies pays to produce Exclusive Content

Comments (1)

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Solid content as always!

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