So, you want to know what cryptocurrencies to invest in before investing? Good thing you came to the correct place. The one thing that you need to do before investing in anything is to find out what cryptocurrencies will go up.
This is because there are so many currencies on the market right now, so it can be difficult to know which one will continue to thrive in the future.
Honestly, there's no way to accurately predict how each cryptocurrency will behave in the future. But, it is possible to intelligently analyze which ones will likely have a more positive future than negative.
This article will give you a good idea of what some of these options may be. Here we'll share different ways in which you can find out what are the best cryptocurrencies to invest in and how to know which cryptocurrency will go up.
Let's get started!
How to Know Which Cryptocurrency Will Go Up - The Top Factors to Look for
Choosing the right cryptocurrency to invest in can be a difficult task, but there are signs that you can watch for to help you figure out what to do. Here is what we think you need to know.
1. Don’t Invest in an ICO Just Because It Has a Cool Name - Ensure Its Exact Purpose
Make sure that the coin you’re investing in has a specific purpose. Just because there is an ICO doesn’t mean it will succeed. You need to identify what differentiates the ICO from others that are similar to it, or who are competing with it. There’s nothing wrong with investing in copycat projects, but see if there are any unique and valuable features that make one project better than the other.
A worthless cryptocurrency would be one where all you're doing is paying for the pleasure of holding it and not providing any utility.
For example, when Bitcoin was first introduced, many different versions of Bitcoin emerged with minor tweaks such as an increased supply or transaction speeds.
Today, you’ll probably find that most of these cloned versions of crypto have failed. But the creators of those copycat coins made a lot of money!
Ethereum is a good example of this. Ethereum was not only focused on becoming another digital store of value. Unlike Bitcoin, its founder believed that the same technology used to perform blockchain-based transactions can also be used to distribute information.
Ethereum has a unique use case and innovative technology. This makes it a valuable cryptocurrency that rose from $10 to nearly $400 in three months.
Ethereum is a platform where developers can create cryptocurrencies, develop smart contracts, and operate marketplaces for currency transactions. Smart contracts are just what they sound like - they are self-executing contracts that facilitate transactions without the need for a third party, such as a bank; and operate a peer-to-peer marketplace.
Other cryptocurrencies like Maidsafe, Storj, and Sia, are now going beyond the scope of Bitcoin. These blockchain-based projects aim to be more than just currencies but to replace cloud storage in the future.
Investing in a good, profitable currency depends on:
1. Be sure to research whether the cryptocurrency or token you are considering to invest has a real-world use case. A simple search on Google will show you that coins like Bitcoin can be used as a store of value, but if your product is simply another coin in the sea, it may be hard to convince investors to give yours a look.
2. Make sure a token's use case is specific and interesting to you. If the project and its team are backed by a strong user base and an actual need for the token, you’re more likely to see an ROI.
3. Check if the use case is logical. Not everything needs to be decentralized and on the blockchain. For example, a coin that markets itself as a decentralized social media platform has no need for blockchain technology because the whole purpose of a social media platform is to give your information to allow it to be social. Think logically about whether that is really needed, and if it isn't, you should probably stay away from it.
2. Don’t Make Your Wallet Cry, Choose a Competent, Trustworthy, and Transparent Development.
One of the biggest red flags for an ICO is when the team involved is not transparent. It means that they have something to hide and could potentially be a scam. When a competent and trustworthy developer or group of developers are putting together an ICO, they usually want to involve the community in their investment opportunity as well as educate you on what the coin does, so just about all reputable ICOs will include information about developers.
Therefore, pay close attention to the developer’s or team’s credibility. It is very simple, always look at the developers’ section of the company website. If they don’t have a “team” page or if they have a small picture that doesn’t look like them, no picture at all, maybe some random words, stay clear of this investment.
Once you find out who the team members are, do a Google search for each one and see what you can find out about them. LinkedIn profiles will give you a good idea about whether a particular coin is properly represented by an experienced and capable group of developers.
Here are some things to consider:
1. Where have they studied or worked?
2. What were their specialities/areas of interest?
3. What is their work experience?
4. Have any of them worked in an influential company before?
5. How many projects have they had before?
6. Do they have any previous project positions that show their potential and skills?
Keep an eye out on the company's Github and Twitter profiles, too. It can help you to get a sense of their achievements, as well as how they communicate publicly.
We aren't encouraging you to be a detective but it’s worth looking at a team’s achievements before you decide to contribute to their project.
3. Are You Confused by Any Part of the Whitepaper?
You've probably heard the term 'whitepapers' thrown around a lot. When a cryptocurrency team launches an Initial Coin Offering (ICO) to raise money for its project, it will issue a document called a white paper.
Here's what the document includes:
• The white paper will give an insight into the goals of the project, how it hopes to achieve them, and what makes the technology stand out from others in the marketplace.
• The amount of money needed to complete the project.
• The total amount of tokens or coins made available to investors. For example, the Ethereum blockchain project went with an ICO, issuing about 80 million ETH at the time. Generally, the more widely a token is distributed among investors, the lower its price will be.
• The duration of an ICO campaign.
When you look at ICOs, it’s helpful to start with the company’s white paper—even though it might be a bit boring or very long. The white paper talks about the company’s risks and opportunities, along with how it plans to use the money it raises.
For instance, the white paper will outline whether the holder of the coin will have voting rights based on the number of coins you hold. (Depending on how the coin is run, the holder of a certain number of coins might get to vote in certain situations)
Don't be fooled by misleading marketing hype. Sometimes overly optimistic white papers are simply there to distract you from the flaws of a job.
Also, if a white paper is hard to understand or filled with technical jargon, it may be intentional—in an attempt to make the team look smart when they are actually not. It can be a sign that the team may be hiding something—be wary.
4. Check Out Cryptocurrency Discussion Boards to Gain Insight Into the Market
BitcoinTalk is the largest and oldest Bitcoin community on the web. It's a place where developers, enthusiasts, and businesses come together to learn, discuss and create. The online community helps people to learn about cryptocurrency, transactions, blockchain developments, and other tech-related aspects of the marketplace.
New or old, every cryptocurrency usually announces its Initial Coin Offerings on the BitcoinTalk forums. This is the best place to ask questions of developers, investors, and other members of the community.
If you’re researching a coin, follow that project’s thread on BitcoinTalk and read every post, including the ICO announcement. Most common questions are answered there. This saves you time and helps you to stay up-to-date.
Read replies from the thread developer. Make sure they're genuine, not just canned, vague, or mysterious.
A good way to find out if certain coins are worth looking into is to search their threads for certain words, such as “cons” or “scams.” This usually means that the coin's developers are trying to hide something.
If a post contains any of these words, be sure to read all of the posts in the thread carefully and do your own research to decide for yourself whether or not to invest.
Reddit is another place to find out information about a cryptocurrency. Many cryptocurrencies have their own subreddit (e.g. /r/ethtrader for Ethereum, /r/BTC for Bitcoin, and /r/tokensale for ICO tokens) where you can talk to people who really know the coin, get updates from the developers, and read analyses and forecasts of the coin’s value.
5. Diversify Your Investments, Don’t Put All Your Eggs in One Basket, and Never Invest More Than You Can Afford to Lose.
In the crypto world, investing only in one coin is a very risky thing to do. With thousands of other altcoins out there, it makes no sense to invest in just one coin. If this one single coin fails you will lose all your money without even seeing much returns. This can happen due to any number of reasons including scams, hacks, token sales, and more.
So, find 3 or 4 coins that you think will perform well, invest in them, and spread out your risks by investing in other coins. This is called diversification.
If you want to maximize your profit in cryptocurrency trading, it's a good idea to have an 80/20 or 70/30 ratio.
Put 80% or 70% of your investments into well-established coins, like Bitcoin and Ethereum. These are coins you can hold onto, as they tend to show positive movement over time. You should keep this amount of money separate from the rest of your budget. Don't spend it unless you have a specific plan.
The remaining 20% or 30% should be invested into a portfolio of riskier options depending on the amount of money you have left and how likely you are to achieve your goals.
A few coins that might be good long-term investments:
• Bitcoin (BTC)
• Ethereum (ETH)
• Stratis (STRAT)
• Litecoin (LTC)
• Waves (WAVES)
6. Don't watch the stock prices every day; it is still best to buy and hold.
The risk of day trading cryptocurrencies is significant: it is like gambling with your hard-earned money on a coin. You can make some serious gains if you invest a lot of money, but otherwise, the small changes in a coin's value don't do much when you're day trading. Even worse, if you lose your net worthwhile doing this, that's a pretty big deal.
People also say in the cryptocurrency market “never time the market”. If you are buying and selling a coin while looking at development updates and events, you might lose money in the long run.
For example: To be able to trade with TA (technical analysis) trading, you should have at least $50,000 in cryptocurrencies.
Rather than monitoring the market, most investors choose to buy and hold. They must be confident in their decision and only invest money that they can afford to lose; if both of these things are in place, investors don't need to watch the price every day. This is the best way to make money and you should also follow this method.
Your account will vary in value a lot, which is why we recommend watching the market a few times a week, month, or quarter. It’s fine to check more often but don’t let those numbers mess with your mood.
In the end, our suggestion to new cryptocurrency investors is to diversify your portfolio. While not every coin will rise in the long run, it's better to be safe than sorry.
Hopefully, this article has given you the knowledge to determine which cryptocurrency will go up and the confidence to navigate the ever-changing world of cryptocurrencies. Now all that's left is to put what you've learned into action. If you do, and your currency of choice goes up in value, then you can say that you made smart investment decisions. Good luck!