Seth has been investing in cryptocurrency since 2018 and is passionate about educating people on blockchain technology
Finding the few out of the many
Today we will be talking about one of the most important question in cryptocurrency. How to spot undervalued projects in this ever changing, and ever growing market. There are roughly 10,000 different cryptocurrencies. Almost all have no reason to exist. We have heard of this before, the dot com boom. Many invested in the dot com boom and only a few made it when the dust settled. I always say the first is never the best. You must keep up with innovation in this market or you get left behind holding the loss. History repeats itself many times. This market will be no different. I would expect 90% of these projects to fail at their intended goal, because much of this space is just pure hype, and speculation. There are ways to sort through all the noise that seems to invade this space constantly. I cannot stress enough how important it is to understand what I am about to tell you.
Research the project extensively BEFORE you invest.
Find projects with a low market cap and a relatively low total supply. You want a fixed supply. Anything under 150 billion total or less.
1. What problems does it solve?
2. How big is that market?
3. How many projects are doing the same thing?
Ask yourself these questions when sorting through the projects you want to invest in. Many cryptos offer the same services or target the same problem/market. You want the project that stands out above the rest.
Research the business partnerships and investors. Research the team extensively.
(Board of directors, council, CEO, CFO, etc.)
You want to look at what proof the network uses to validate the transactions. And how the token relates to the network that it is native on. It must have utility and use case.
6 factors I consider when investing,
-Solving a problem
-Vision and strategy
-Tokenomics/ token utility
It is important to note that there should be a foundation in all aspects of the 6 factors. Keeping up with the project is also crucial. You must adjust your portfolio accordingly. Stay up to date with your investments and the 6 factors.
I am not a financial advisor
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.