Last Updated on August 1, 2019
With over 2,000 cryptocurrencies on the market, there’s plenty of choices when it comes to trading cryptocurrency. In fact, the hardest part is narrowing down the search!
In this guide I’ll teach you 9 ways to pick a killer cryptocurrency investment.
- How to pick a profitable long-term cryptocurrency investment.
- Why a cryptocurrency’s fundamentals are so important.
- The tools you can use to research your investments.
- How to be confident in your investment decisions.
So let’s begin…
1. Think Long-Term.
Most crypto traders are chasing quick-wins – rather than thinking about the future potential of their investments.
…And when the market corrects, their investment decisions are exposed because they haven’t made sound, well-informed choices.
These investors are usually the first to ‘panic sell’ because they don’t have any knowledge, faith or belief in the cryptocurrencies they’ve invested in.
That’s exactly why it’s so important to think long-term when you’re picking a cryptocurrency investment – because you’ll have absolute confidence to hold – rather than panic selling.
2. Look At The Team.
When you’re picking a potential cryptocurrency to invest in, it’s incredibly important to research the team behind it – because they’re the ones who will drive the success of that coin.
Here’s a few ways to determine the strength of the team:
- Does the cryptocurrency have a strong leadership team?
- Do they have a proven track record of developing successful projects?
- Is their team planning more updates and developments to their technology?
3. Always Read The White Paper:
Whenever a new cryptocurrency is launched, a white paper is released to the public.
So if you want to find a fundamentally strong cryptocurrency, reading a cryptocurrency’s white paper is one of the best places to start. A quick Google search will help you find pretty much any white paper you need.
This will give you an overview of the project including:
- What they’re trying to achieve.
- Their roadmap and timeline.
- Their technology and why they’re unique.
- How they’re planning to achieve their goals.
- Their vision and ambitions.
4. Analyse The Fundamentals.
Because the crypto market is so volatile, sometimes it’s better to stick to analysing the fundamentals of an altcoin, rather than relying solely on technical analysis.
The main thing to note here is that you don’t need any ‘technical ninja skills’ to find a great crypto investment for the long term – you just have to look at the company’s fundamentals.
5. Consider Diversifying.
When you’re picking which cryptocurrency to invest in – consider how diversified your portfolio is. This will help you spread your risk across multiple markets.
Therefore if one cryptocurrency drops, you won’t blow your whole investment! Or if one industry crashes, you still have investments across multiple industries to balance your risk.
There are thousands of different cryptocurrencies to choose from – so you have plenty of choice when it comes to diversifying your portfolio.
Here’s a few ways to keep your crypto portfolio diversified:
- You could spread your investments across different industries e.g. privacy, payment platforms etc.
- Spread your investments across low cap and high cap coins.
- If you’ve already invested in some of the big name cryptos like Bitcoin or Ethereum, you could invest a small percentage of your portfolio in an emerging cryptocurrency that’s still relatively unknown for higher growth opportunities.
6. Understand Why They’re Unique.
With so many potential cryptocurrency investments to choose from, it’s really important to understand what makes a cryptocurrency unique and why they’re different from their competitors.
- What separates this cryptocurrency from the others on the market?
- Do they have superior technology?
- Are they innovating?
7. Invest In A Profitable Industry.
If you’re investing long-term, try looking at high-demand, rapid growth industries that a cryptocurrency could potentially thrive in.
An example of a profitable industry for cryptocurrency is privacy coins:
You see, when it comes to our online spending, anonymity is a big deal – and that means privacy altcoins have huge investment potential.
Check out my guide to my top 7 best privacy coin picks here.
8. Research The Community.
A lot of cryptocurrencies have huge communities on Reddit.
On Reddit you’ll find recent opinions, news, blogs and stories about each of the coins, perfect for finding out more about a cryptocurrency’s following.
Check out this list if you want to look at some of the top Reddit crypto communities.
You should analyse whether your potential investment has a loyal following, whether their community truly believes in the potential of that cryptocurrency and how engaged their community actually is.
9. Learn How To Research Fundamentals:
Wondering how to find the answers to all of the above?
Here’s a list of places you can find out pretty much everything you need to know:
YouTube: The YouTube crypto community is huge – there’s so many people sharing cryptocurrency opinions, thoughts, ideas, pros/cons etc. And usually this information is very up to date, meaning you’re not looking at old, arbitrary research.
Coin Market Cap – https://coinmarketcap.com/ – this website gives you a financial summary of the whole crypto market. Here you can find every major cryptocurrency available to invest in, along with historic prices, supply, trading volumes and price graphs.
CoinGecko – https://www.coingecko.com/en – this is a great resource if you want info about the coin’s recent news, what they do, trending posts, similar coins, 24 hour price change etc.
The Overall Strategy.
Picking a profitable cryptocurrency investment isn’t too challenging – but it does take a little bit of research and planning…
Fundamentally, at the heart of any great cryptocurrency lies their team, their technology, their vision as a business etc.
So as an overall strategy, don’t chase the fad coins:
Pick the ones that you fully expect to prosper long-term and only ever invest in the cryptocurrencies you believe – because that will make you a more confident investor.
Which cryptocurrencies are you thinking of investing in?
Post a comment below and let us know.
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- 9 Tips For Picking A Killer Cryptocurrency Investment - February 6, 2018