You probably started to be interested in cryptocurrencies by hearing about Bitcoin or Ethereum. However, if you saw thousands of coins when you entered CoinGecko and this situation confused you while investing, this guide is exactly for you.

This guide details the metrics you should look for when investing in any Crypto currency.

• Before starting the guide, I would like to warn you that if you have heard of any money other than Bitcoin or Ethereum, the first money you should not invest is the money you hear. Because the current money has announced its name even to you who have no interest in crypto, its reputation has reached the last person and is now preparing for decline.

1. Where do we first look at the crypto money we will invest in?

CoinGecko, CoinMarketCap should be the first place to search for a cryptocurrency you hear about or want to buy before you hit the BUY button. These sites are places that list major cryptocurrencies. You can find basic information about current cryptocurrencies first here.

Although these sites contain detailed information about the current crypto currency, it takes time to update the information they contain specifically for a particular coin. Therefore, purchases are not made just by looking at these metrics. One by one, I will further deepen these data later in the article.

2. So what data should I look at first and what is their significance?

a. Total Amount of Coins

One of the most important features of Bitcoin is that it is a limited asset. Nowadays, states print money for free and unlimitedly. Bitcoin's power comes from its limitation. As the demand for a limited asset, which is the basic rule of the economy, increases the price, it causes the price to increase as the demand for Bitcoin increases.

Therefore, perhaps the first data to look at is whether the money we will get is limited or not. We do not mean "HardCap" by limitation. HardCap means, for example, there will be only and only 21 million Bitcoins. There will be no 21,000,001 Bitcoins. The 21 million limit means HardCap for Bitcoin.

However, currencies like Ethereum or Monero do not have this "HardCap", so should this mean that the current currencies are bad, no. Restriction does not mean "HardCap". Ethereum and Monero are limited currencies, the only difference from Bitcoin is that these coins decrease over time and limit their supply to an unknown point.

So the important thing is not to have a sharp limit, but that your supply will eventually restrict itself. So this is the first metric we should look at. Will the crypto money we buy restrict itself in the future? If our question is yes, then we are on the right track.

(For example, Tether is the crypto dollar, and Tether can print unlimited USDT whenever the company has dollars.

b. Amount of Coins in Circulation and its Ratio to the Total Amount

Well, we learned that a cryptocurrency is limited and has a "HardCap". Then what is the amount in circulation? The answer to this question is very easy. For example, as seen in the example above, 89% of Bitcoin mined by mining has increased. This means that only a small portion of 11% remains. It will be released in about 2 million Bitcoins and the extraction will end.

Then comes the 2nd place to look at, the rate of a cryptocurrency in circulation. If the rate of a crypto currency in circulation is less than the amount to be released, it will cause the value of this money to decrease with the money to be circulated in the future.

For example, the example below is for Ravencoin (RVN). As can be seen, there will be a total of 21 billion RVN. It will not be able to cross this border. However, the total amount of RVN in circulation is 8 billion units. This means that another 12 billion (60% of the total amount) RVN will participate in the circulation.

In short, the higher the total amount of a coin in circulation compared to its total amount, the more stable its price will be, that is, the less volatile (volatile). Because the new coins to be circulated are less than the existing coins and will not decrease the price.

So should we not invest in these coins? So, should we stay away from these coins? The answer is a resounding NO. Why is that?

c. Rate of increase in the amount of coins in circulation and inflation

The speed at which a coin enters circulation is very important. For example, based on the Ravencoin example above, currently 12 billion RVNs are waiting in line to enter circulation. What matters is how fast these 12 billion pieces enter circulation. For example, if all 12 billion units will enter in 1 year, the circulation of Ravencoin will increase by 120% in almost 1 year, so the price that cannot withstand the supply shock will decrease significantly.

Let's say that 12 billion will be released in 120 years, it means that 100 million RVN will be put into circulation every year. This amount is very important compared to the current 4 billion RVN. This means that the price is not affected much by the coins that will be circulated.

Here, the concept of "inflation" comes into play. Inflation in crypto is the ratio of a coin to the circulating coin in a year. Let's say that the amount of Acoin in circulation is 100, if there are 200 in circulation at the end of a year, the inflation of this coin is 100%.

• Based on my own experience and observations, it is that for coins with annual inflation over 20%, inflation severely suppresses the price. Therefore, we must be careful when buying coins with an inflation rate of more than 20%.

• Inflation is not always something to be afraid of, and you can turn it into your advantage. If a coin has high inflation, the price is severely suppressed. These types of coins are among the coins that can be evaluated for the long term (5 years and beyond). In particular, updates such as Halving - Difficulty Bombs seriously suppress inflation. Therefore, these updates increase the price of the coin. (This is the reason why the halving in Bitcoin moves the price up.) Buying and waiting while the inflation is high will cause a serious price rise with the decrease. In the later parts of the article, inflation calculation and halving etc. methods will be explained.

d. Coin's Market Size

We learned the concepts of total coin amount, amount of coins in circulation, rate and inflation. We came to another metric. Market size of a coin.

The market size of a crypto currency is calculated with a very easy process.

• (Amount of coins in circulation) x (Instant price of the coin) = Market size of the coin

So what's the Market Size for? What kind of data does the multiplication of the price of a coin by its quantity in circulation give us? Then come the key sentence:

"THERE IS A REVERSE RATIO BETWEEN THE MARKET SIZE OF A CRYPTO MONEY AND THE RISK APPLICATION."

This sentence says that if the market size of a cryptocurrency is high, it is well-known, it is likely to be listed on many exchanges, and it is a safer port than coins with lower rankings.

Bitcoin is the largest currency in the crypto money market. In this case, the crypto currency with the least risk and the least volatility in the crypto money markets is Bitcoin. As the market size decreases, crypto money becomes much more risky.

So, should we avoid the high-risk crypto money? No. If the risk of a cryptocurrency is high, the return and the lump will be high. For example, while it is quite common for a cryptocurrency that is ranked 600th to double its value or lose 90%, it is more difficult for Bitcoin.

• My own experience is that cryptocurrencies with a low market size are seriously manipulative. However, it would be sensible to give these coins a chance with small volumes. For example, although buying Bitcoin for 10 lira does not bring much profit, a coin with a low market size can multiply this money. However, investing in high volumes of these coins can result in a painful experience.

e. Coins Exchanges

Although it is a metric close to the Market Size, it gives many ideas about how many exchanges a coin is in and how large and prestigious these exchanges are.

If a coin is listed in many exchanges, access to this coin will be easy. This will be very important for the pricing of a coin. Because in an exit wave, everyone will want to buy this coin, if the unfamiliar and unfamous exchanges, which we call "under the stairs", access to this coin will be difficult and the price of the coin will be manipulated by the few people in that exchange.

It is true that if a coin is high in Market size, it is generally listed on many exchanges, but there are many exceptions. For example; Bitcoin SV

BitcoinSV is not listed on many well-known exchanges on the Crypto currency exchange, although the amount of HardCap 21 million, the removal of 89% and its low inflation and the market size is 22nd. (Such as Binance, Kraken, Bitstamp, OKex etc.) This shows us that exchanges do not trust this coin.

The following logic is wrong, "If a coin is listed in fewer exchanges, it is bad." No, the stock markets look in their own pocket. If a coin has a lot of trade, they are happy to add this coin and earn a commission. However, despite the high volume and market size of BitcoinSV, many exchanges do not list this coin. This is an important metric.

• My personal opinion is that if a coin is listed on the Kraken and Gemini Stock Exchange, that coin is long and sustainable. So trusting this coin will not be a bad choice. Because Kraken and Gemini are two exchanges that meticulously list coins in crypto exchanges and pay close attention to regulations.