As of 2021, there were 4,000+ cryptocurrencies.
With such a huge number of cryptocurrencies, picking the right ones to invest in feels like looking for a needle in a haystack. You fear picking the wrong cryptocurrencies and losing all your money. So, despite knowing investing in cryptocurrency is one of the ways to generate wealth, you’re reluctant to do it.
How can you overcome this fear and choose cryptocurrencies with huge growth prospects?
To help you out, here’s how to select the right cryptocurrencies to invest in.
Review Pricing History
To decide which cryptocurrencies to invest in, review their price fluctuations. As a crypto investment beginner, avoid volatile coins. Although these coins have a huge growth prospect, the risk of losing all your money is too high.
Use a reputable crypto exchange platform to track the price movements of different coins, for example, Aave price. Pick cryptocurrencies with stable prices to mitigate risks and increase long-term returns.
Read Cryptocurrency White Paper
A cryptocurrency white paper explains the coin’s blockchain technology and its creation purpose. Also, the white paper gives insights into the team behind the coin and their competence. With this information, it’s easy to project a given cryptocurrency’s future.
The best-performing cryptocurrency has a well-written white paper. As an investor, it’s easy to understand this coin’s vision and buy into it.
Check Market Capitalization
To know which cryptocurrencies to buy, check the circulating supply. Avoid a cryptocurrency with partially circulating coins, as this will affect the coin’s future price. This coin’s supply will increase in the future, and its prices will drop when this happens.
The best cryptocurrency has a pre-determined maximum supply, and the full amount is tradable.
Bitcoin is a decentralized digital currency that can be transferred on the peer-to-peer bitcoin network. Bitcoin transactions are verified by network nodes through cryptography and recorded in a public distributed ledger called a blockchain.
Check Trading Volume
Reviewing trading volume is the other way to decide which cryptocurrencies to buy. The best-performing cryptocurrency has high daily trading volumes. The high trading volume is a sign of high demand and liquidity.
The trading volume will also help you find well-established cryptocurrencies with solid bases. These cryptocurrencies are fairly stable, and their prices are likely to keep going up.
Check Developers’ Activity
To generate quick returns, some developers are venturing into cryptocurrency scams. They’re coming up with new cryptocurrencies, which they pump and dump. You should find out as much as possible about a given cryptocurrency’s developers to avoid these scams.
Also, learn to spot a pump and dump crypto scam.
Grow Your Wealth by Learning the Right Cryptocurrencies to Invest In
Cryptocurrencies offer an easy way to generate wealth without huge upfront capital. Rely on the above tips to learn the right cryptocurrencies to invest in. Pick stable cryptocurrencies to lower risk and increase long-term returns.
Also, look for cryptocurrencies with huge daily trading volumes, as this is a sign of high demand. Finally, check developers’ activity to avoid falling for a pump-and-dump cryptocurrency scam.
Please check out our other blog posts for more Business and Lifestyle tips.
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