5 Key Factors To Consider When Investing in Cryptocurrency
5 Key Factors To Consider When Investing in Cryptocurrency
04.25.2022 - This article was originally published on Crypto Witch’s blog. To read the full version, tap or click here. To listen to co-founder Shirin on $HMONEY Radio, tap or click here.
HI WITCHES! 👋 We’re so excited to have you here and thanks for putting your crypto education in our hands! For those who don’t know us, Crypto Witch is a non-toxic, judgement-free environment to learn about blockchain technology and cryptocurrency. Have a question? It’s simple: leave us a comment or slide into our DMs on Instagram at @cryptowitchclub. 😉
As requested by our Crypto Witch Coven on Instagram, here are The Top 5 Factors we consider when looking to invest in a new crypto project. 👀 (You’re welcome.)
The Team
Who’s behind the crypto project you want to invest in? You’ll want to look at their founding team, board members, overall footprint in the space, and social sentiment before investing.
Does the team have blockchain or related technology experience?
Does the team seem qualified to fill their roles? Are they considered ‘thought-leaders’ in the blockchain and/or cryptocurrency space?
Is it clear where the business is located? What they do? Are they visible on social media such as LinkedIn and Medium?
The Tech
Tech matters witches! While all crypto has a tendency to be volatile in the market (with the exception of stablecoins) — to be confident in long-term holding you’ll want to research the following:
What problem/s does the token solve?
Where in the team or developer’s long-term planning is the crypto token right now? (This info can usually be found in their whitepaper, often listed on their website)
Do you support this tech or platform? For example, if you’re focused on sustainably, due to high energy usage, you may prefer to invest in proof-of-stake tokens versus proof-of-work until some tokens (like ETH) complete upgrade to proof-of-stake
Supply & Circulation
Crypto market cap, supply, and circulation are oh-so-important! These indicators will give you insight into a token’s stage of development, market value, and how many tokens are in the market.
How many tokens are publicly available and circulating the market right now? Historically?
How many tokens are there in existence TOTAL ? This affects growth potential and volatility
Historical Growth
History and your time in the market matters. (For investors but also for crypto projects!) Time = Trust. ‘Nuff said.
When was the token launched?
How much is the token’s value now?
What has the token’s growth, losses, and volatility looked like since inception?
Does it move with the market? Or does it have its own flow? Why?
Trust Your Gut
By now, you should have been able to discover more about the team behind the project + their capabilities, price history, utility and community. Do you feel safe investing into the cryptocurrency project? This is your go-ahead boo, you checked the boxes! 👏👏👏
Feeling uneasy? Step away like, NOW or test the token by investing a very small portion of your portfolio to start.
In addition to tokens, a friendly reminder to always vet the exchanges you are purchasing crypto through as well!
Enjoy investing witches! 🔮 Like this article? Let us know and learn more about Crypto Witch Club here.
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