With so many cryptocurrency options available to you, it can be hard to distinguish what coins are worthwhile investments and those which have the warning signs of being duds. To help you get your crypto portfolio up and running, we’ll walk you through the basics of evaluating different digital currencies so you can make more informed decisions as to the kinds of crypto you’re adding to your digital wallet.
The Cryptocurrency Landscape
There is currently a sea of potential cryptocurrency options for you to buy, sell, and invest in for both short-term or long-term gains. Like any good investment, the goal is to buy low and sell high, and—with new digital currencies launching with great regularity and frequency—the opportunity to get in on the ground floor of the next big coin has never been more accessible for the average crypto investor.
But let’s be real. The cryptocurrency market is volatile, so if your risk tolerance is low, you’ll want to bring your money elsewhere. However, if you’re in the business of high risk—high reward, you’re halfway to understanding the types of crypto that are right for you.
What Makes A “Good” Crypto?
As “meme stocks” have shown us, there’s no tried and true method for determining what will make a cryptocurrency “pop.” Overnight, a seemingly insignificant coin like Dogecoin can take off and mint new millionaires overnight. While you may “hit it big” following the masses, it’s far more advantageous for you to complete your own cryptocurrency research rather than relying on the opinions of unknown avatars on Reddit and Twitter.
The key elements of a digital currency to consider before adding it to your portfolio are the team behind the currency and the currency’s practical use. If the team behind a particular digital currency is responsible for creating other popular digital currencies, there’s a decent chance the currency could be primed for success based on the ability of the team in place to create a roadmap for how that currency will benefit society in some way. The more a digital currency can be integrated into day-to-day life, the better it is for that currency’s longevity and success.
Availability On Exchanges
Another factor that will help you determine whether or not to invest in a specific digital currency is its availability. If through your research, you come across a newer coin that has a ton of practical uses but hasn’t yet been widely disseminated, and the price point is in its infancy, you might be poised to get in on the ground floor of a successful crypto project. The idea being, as the coin becomes more popular and is starting to be listed on more and more exchanges, more people will be able to purchase the digital currency and thus help drive up the price. If you were fortunate enough to purchase a tidy sum prior to the currency’s increased availability, you could be in a great position to turn a profit.
Uses and Future Plans
Everyone loves projections, and your evaluation of potential cryptos to add to your portfolio should be no different. Having a deep understanding of what’s next for a digital currency, who its partners are, and how it’s already integrated across blockchain technology should give you a rough idea of how successful the currency will be. It’s also important to pay attention to the market cap of a coin and to understand how many have been minted or will continue to be minted. This is just simple economics, supply, and demand. If a popular coin with a lot of uses and exciting plans for the future only exists in a limited quantity, that digital currency is primed to “pop.” Conversely, if a digital currency has a lot of uses and an exciting future agenda but is so widely available that the market is saturated, you might not be making the best return on your money.
Starting Your Portfolio with EthereumMax
EthereumMax is a decentralized cryptocurrency that gives holders control of their digital assets without the need for an intermediary. Its self-sufficient and autonomous DeFi community powers a yield-based token that provides a 6% distribution of every transaction to existing eMax wallet holders just for owning it. Check out https://ethereummax.org for more information on why EthereumMax is quickly becoming one of the most robust tokens within the crypto ecosystem and set up your eMax wallet to start your cryptocurrency journey today.