The head of the crypto fund shared methods for analyzing promising cryptocurrency projects. What to look for when choosing and which projects are best avoided.
In the rapidly changing conditions in global markets, investing in cryptocurrencies requires not only caution, but also in-depth analysis. Experienced funds use hundreds of metrics and tools, involving dozens of experts to make forecasts and assess prospects.
Sergey Khitrov, the founder of one of the world's largest crypto conferences, Blockchain Life, the Listing Help service - the world's largest agency for listing (adding) projects on crypto exchanges, and the cryptocurrency-focused venture fund Jets Capital, identified several important criteria for self-selection of investment projects that will help determine the success or failure of investments.
"We have more than 200 criteria in the fund, and there are 93 key criteria by which we monitor the project in order to get a complete picture from an investment point of view, whether it is a project at an early stage or already traded on the market," Khitrov said.
When evaluating a project, the most important thing is to evaluate its team, the expert noted. In his opinion, strong leaders and personalities can really make high-quality projects: "We look at the team, because without it it is almost impossible to implement a strong project."
Khitrov says that there are no unimportant members of the project team, and his analysts look at each participant, as well as ensure that the founders remain on staff.: "It often happens that the presentation says that they have a famous co—founder, and he's been gone for a year."
In addition to the team, the community and the user base of the cryptoproject play an important role. This is an important element of evaluation, because even a technically strong team and creators cannot cope with the downward movement of quotes simply because they have neither an audience nor marketing.
Following this, it is important to determine how real this audience is and how involved it is in using the product: it should not be a hyped-up mass of users who came for awards as part of marketing campaigns.
"It's quite simple: if there are no buyers of the token and normal marketing, then the prospects for the token are, to put it mildly, sad. Even crypto exchanges pay special attention to the audience when considering projects," Khitrov noted.
"It is especially important to understand the activity of the audience, because many have gained a fake audience, especially through all sorts of airdrops. There are accounts with 2-3 million subscribers, and there are only 10 thousand or even fewer message views. This means that everything is screwed up. We look not only at Telegram, but also social networks like X and Discord — they also show activity."
The next key element for analyzing the prospects of the project is the distribution of tokens among the team, early investors and other large holders of tokens:
"This is one of the main indicators — who owns the tokens and how many are already in circulation. If it is clear that large holders have most of the tokens, they can start selling tokens and continue doing so almost indefinitely. Such a token has almost no chance."
Khitrov clarified that he pays attention to all token holders, trying to determine whether the holders are interested in the development of the project and the increase in token prices. According to the expert, large funds and long—term investors are often a plus for the project, however, with some caveat.
"I often hear that if the investors of a project have funds of the first and second echelon, then this is a success. But as one of the venture investors, I will say that very often such funds sell their shares in the secondary market even before the release of the token. They don't want to wait. They entered at an estimate of $ 100 million, sell at an estimate of $ 2 billion, although the market is estimated at $3 billion, and thus "cut" the market."
From this point of view, it is also important to monitor the unblocking of tokens intended for large players. Khitrov believes that when funds exit strong projects, this is not a good signal, and if it is clear that "smart money" is transferring tokens to centralized or decentralized exchanges, then this is a reason to be wary.
The expert also paid attention to the volatility of the market and the fact that scenarios for the development of the situation may change, as in the case of the US trade duties imposed in early April, which "pulled the markets with them." And here it is important not only to soberly assess the situation, adapting to the new realities of the market, but also to be able to wait.
"My advice is to always look at the fundamentals. Not to believe the "wrappers", but to understand the essence: what the project does, how it does it, what kind of on-chain activity it has. This is more important than any presentation. The current collapse in the markets is a "temporary pain" that will be replaced by growth by the end of the year," the expert concluded.
