This article is all about analyzing a new crypto coin before buying it. I know, I know — you’re already ready to click away. You might be asking yourself: why do I need to analyze a coin? I just login to my exchange and click on the buy button. I don’t need to understand a coin to make profit off of it.
That’s a brave mindset to have, but it won’t last you long. The major coins like Bitcoin and Ethereum are certainly very promising and can be strong buys, but they don’t give you the same exponential growth that smaller coins can. For example, smaller altcoins are known to rise over 1000% in just a single day. That’s something Bitcoin can never do at the current stage. So, if you want to make insane gains, you need to choose a small-cap altcoin that less people know about. That’s the only way to become a multi-millionaire starting with a few hundred dollars in the crypto ecosystem.
Of course, you can’t just randomly pick small-cap coins and hope they moon. That won’t get you anywhere, and in fact, you’ll most likely lose all of your money. Therefore, the only way to make insane multi-level gains in the crypto ecosystem is to carefully research and analyze a smaller coin before buying it. Research is so important, because it separates crappy low-value coins from coins that have unlimited upwards earning potential. If you master research, you can master the entire cryptocurrency world, and after that, the sky’s the limit. By the end of this Article, you’ll be one step closer to becoming an expert at crypto coin analysis.
Let’s get to the burning question that’s on everyone’s mind: how exactly do you determine whether a coin is buy-worthy or not? What research and analysis vectors should you look into before pulling the trigger? Today, we’re going to briefly discuss three things. Origin, market value, and goals.
Firstly, origin. The main questions you want to ask yourself here are: where did the coin come from? This means looking into the development team or the founders. If the coin is created by a well-known talented developer, then it’s definitely more of a safe bet. Some famous developers are Vitalik Buterin of the Ethereum Foundation and fluffypony from Monero. You’ll notice that most reputed coins have public dev teams who regularly attend meetups and host events, and that the coins that eventually end up being scams will never host real public events. This is because coins created by shady people are always associated with those who don’t want to reveal their public identity. Study the coin’s origin and where it came from, and you’ll be able to understand a lot more about it. Another super important factor that plays into this can be age. If a coin is brand new, wait a bit longer! See how things develop — don’t rush into a day-old project just because it’s shiny and new. You will likely end up burnt.
The second thing to look at is market value. Market value is actually very different from value itself. Whereas value is how much a coin is actually worth, market value is basically what the market prices the coin at. The two are usually the same, but there can be some pretty serious disconnects. When market value and true value are different, that’s where you can make massive profits. Now, you may find a really great coin with an amazing team behind it, but the coin may have pumped 10x within the same day. The coin has great inherent value, but at this point, the market value is way ahead of true value, which means it’s probably not a great idea to jump in now. On the other hand, the opposite can happen as well. You may strike gold and find an amazing project, but you’ll notice that the coin’s price is extremely low. This happens when the market hasn’t fully realized the project’s true value. Times like these create the best buy opportunities, since you can actually beat the market very easily. That’s the power of analysis. Analysts looked at Tesla’s electric car division back in July and saw great potential. Since then, Tesla’s stock market cap has gone from around 30 billion to over 100 billion. That’s an amazing profit — all thanks to the divide between market value and real value.
There are a few simple techniques you can use to understand the real value of a coin. First, look at the price history. If the price has jumped up a lot recently in a very small timespan, it’s definitely overvalued, so you need to wait for it to come down. If it has crashed very hard in just a day, there might be a buy opportunity there. Also think about metrics: number of users, how much money flows in and out of the business. If a business doesn’t actually make any money but the coin price is very high, why would you buy it? Naturally, determining a coin’s real value also ties into all of the other factors, including the team and talent behind it. Study as many metrics as you can and get as much team info as you can in order to successfully understand what the fair value of the coin should be.
There is a third factor to look at, and it’s very important — real-world goals. This isn’t just about the current level of user activity, but it’s also about the value proposition that the project brings to the world. What is the project looking to actually achieve? What real-life problems does the project solve? Is it something that consumers will clearly want? Does it personally solve any problems or help improve the quality of something in your own life? This is a true indicator of success. Once you find a crypto coin that is actually able to solve real-world problems in a unique manner, that’s when you will be able to make insane gains.
So never forget to research your crypto coin buys, and don’t forget the three analysis pointers — origin, market value, and goals. While researching, if you ever forget the important parts of each analysis factor, jump back to this video and watch it again! Knowing these things thoroughly will make you a master of the crypto world, and you’ll easily be able to make huge amounts of profit in your trading journey. As always, don’t forget to like and subscribe if you want to see more crypto videos like this one!