It is pretty simple to make a quick buck when you are in the market for cryptocurrency. The only thing you have to do is to buy a coin when it is still underpriced and sell it at a higher price when the currency becomes more popular. The best coins are usually those that everyone talks about and those that are used by the masses. Those are the ones that will be launched on huge exchanges with millions of dollars worth of volume. The cryptocurrency market is unregulated and very opaque, so for a beginner to avoid getting scammed or taken advantage of you need to know how to spot a good investment opportunity.
1. Qualitative assessment :
You need to make sure that the coin has a large and passionate community. The crypto community is made up of people who are interested in the project of a new altcoin and are always willing to help each other out. It is also the crowd who are most likely to buy the coin at a higher price since they know that it is best for their investments. It is a good sign when there is a large amount of activity from these people and you can buy the altcoin at a low price.
2. Look at the history of coin :
This means that you have to go through past roadmaps and reviews of the coins that are being offered by people who have been in the community a lot longer than you have. The best thing to do is to look at the various altcoins that are being offered and see the opinions that other people have made on them. You can use social media platforms to talk forums to see what people think about the latest coins and how successful they might be. You can also go through their whitepaper and see what their promises are and then compare them to the actual results.
3. Flow of funds :
This means that you have to check the flow of funds and how much interest the altcoin has accumulated by itself. If it is accumulating a lot of interest then you can probably invest because there are people who want to invest in it. The use for the currency should also be clear and this means looking at their features and plans for their future development. The value of the coin should be clear as well since it will be used by millions and millions of people so taxes on crypto gains should be fair. It is also a great sign if the coin has a large supply because it will be able to be divided and given to more people.
4. Price stability :
You might need to wait a while before you get rewarded for your research work. Some of the best coins are expected to be released in the future and it might take some time before they hit exchanges. It is a good sign if the coin has a large market capitalization so that it will be able to attract many investors. The coin should also have a good volume of trading and it is best when users are very active in their trading activity.
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