Cryptocurrency is potentially a great digital investment option for many investors. And now multiple Instituational Investors are also looking towards cryptocurrency as a great asset for trading instead of traditional bonds, ETFs, stocks and shares. Cryptocurrency market grow drastically as today the total market capitalization is around a trillion dollars. There are few 'faces' of cryptocurrency which gets most of the exposure mainly for the people who are new or totally unfamiliar with the term cryptocurrency like Bitcoin, Ethereum, etc. But other than these 'faces' there are multiple crypto coins have a great potential and are disrupting the decentralisation with their outstanding projects and tokenomics. Though there are multiple cryptos who come with great ideas but cannot executes themselves. So here is the guide while investing in Altcoins having potential as well as are going to be the best of your investments and tips to increase your portfolio.Â
FACTORS TO CONSIDER WHILE INVESTING IN CRYPTOCURRENCY
Despite the international trend of cryptocurrency devaluation in 2019, some coins still possess a very good potential for making quick and long-term ROI. Do not pay attention only to the current rate of cryptocurrencies because this index is the most volatile and may change drastically within a few weeks (take, for instance, the dramatic drop of Bitcoin price in 2018). On the contrary, consider the following factors and indicators.
Market capitalization – the value of all issued digital coins of the particular cryptocurrency. High market cap means a large volume of the crypto coins participating in active transactions, which means an enhanced interest of investors.
Liquidity level– the higher it is, the faster a cryptocurrency can be sold at the market price. The most popular cryptocurrencies – Ethereum, Bitcoin and Ripple – have a high liquidity rate. Trading activity on exchanges indicates the number of transactions with certain cryptos made over a certain period.Â
Diversify your investments– never invest money in one asset. New traders and investors make this mistake repeatedly and, as a result, lose all money after the first failing deal. Diversify your investment portfolio. At least one of the chosen cryptocurrencies will bring profits and you will be able to minimize losses.
Do not blindly trust one source of data – always use a few sources (chats, forums, expert opinion, financial analysis, brokers).
Learn and observe – it is the only way to pick the best cryptocurrencies and the entry point to this extremely volatile market.
So friends these are the COMMON tips for investing in cryptocurriencies. Hope it'll help you to analyse newly created crypto coins.
Good Luck With Your Investments !!
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Well-written