Due to the rapid development of Blockchain technology, a series of other virtual currencies were born to serve many different purposes, making the overall cryptocurrency market very diverse and the choice and decision making. Determination is sometimes not easy.
Therefore, in this article, I will talk to you about the cryptocurrencies worth investing in the second quarter of 2020 under certain criteria.
In addition, I will introduce some strategies for selecting virtual currencies worth investing in. Start!
- Cryptocurrency market in the first quarter of 2020
The first quarter of 2020 marks a period of global economic crisis due to the strong impact of the corona virus, although the cryptocurrency market has always been considered a safe haven channel whenever the world. geopolitical events occurred
However, it seems that this time the impact of the translation is so great on the liquidity of the financial market that investors are forced to sell everything their intangible assets including money. electronics and especially Bitcoin.
This action caused Bitcoin to lose 10% of its value in the first 3 months of 2020 even though it achieved a significant 30% increase in January thanks to tensions between the US and Iran.
The fall in Bitcoin price is also one of the reasons why the market capitalization of cryptocurrencies also evaporates 5% (According to TradingView), which is understandable because basically BTC is still a valuable virtual currency. value and highest liquidity in the market.
However, the problems with the cryptocurrency market do not come from the market itself, but are largely affected by a force majeure reason (corona virus) and the fact that this potential market will soon turn. back to development is undisputed and that is reflected by the fact that BTC had a strong price increase to return to the price of over $ 7,000 after only 18 short days (from 16/3 up to 3/4).
And like the comments of the CEOs in the field of digital technology, it has been said that the recent decline in the price of the cryptocurrency market is simply due to the emotional behavior of investors, not from the its value proposition.
Therefore, the market overview in the first quarter of 2020 is most objectively considered as a small incident of the market caused by the emotional behavior of investors, and when the world is preparing to turn. With the normal development trajectory after the pandemic, the cryptocurrency market will surely explode as strongly as before.
Every investor participating in the cryptocurrency market wants to buy the best coins to maximize their profitability, but assessing which virtual currency is "good" is Not everyone can do it now. Experienced investors rely on the following general characteristics to evaluate a coin to see if it is really worth investing in:
- ۞ Stability: In essence, cryptocurrencies are the most reliable market for long-term investors, so to determine whether to invest in a coin or not The first issue to consider is the stability of that coin.
Let's look at BTC as a prime example. Although its value fluctuated up and down with the time reaching over $ 20,000 and reaching the bottom below $ 4,000 as recently, its recovery It is almost instantaneous, which means the core value of the coin is high and should be included in the list of coins to be noted
- ۞ Exception calculation:
Certainly, creating a highly stable currency like BTC is not easy, especially in the context that most of the altcoins are now traded with BTC itself
However, there is no way that only BTC can make a miracle, so when you discover coins with high base value and high development potential, you should focus on it a lot. possible.
Following a coin with great potential in the first place will help you earn a huge amount of money when it is noticed by other investors.
- ۞ Growth rate
This issue has always been at the core of every process of evaluating any asset commodity and with the cryptocurrency market it is no exception.
Looking at the growth of the coin will show us its future development as well as make forecasts about the value of the coin over time in the market. is high or very high that investors will choose short-term or long-term investment for good coins.
- ۞ Technology that makes coins
Because of their nature as `` electronic '' coins, the technology that makes up the coin has always been a criterion for evaluating its long-term development, although currently most major coins such as BTC, XRP, ETH works according to a common model and they connect
- How to choose a cryptocurrency worth investing now !
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- ۞ Rule No. 1: Read the Whitepaper
A whitepaper, or white paper, is a type of document designed to explain all the issues related to the process of formation and core value of money, in addition to providing information. It is also important to read the future of the coin and the group behind it to create the coin.Whitepaper should be read first in the process of understanding the coin so that investors have a look at it. in advance about the operating form as well as potential future values
- ۞ Rule No. 2: Understanding market capitalization (Coinmarketcap)
The number two rule of assessing a coin before deciding to invest in it is that you need to check the supply and price of a coin in the market.Only pay attention to coins that have at least 80% of the number currently circulating in the market because only when this rate is reached will the liquidity of the coin be considered acceptable.The value of a coin only reflects the value of how people perceive it, so it is not a determining factor for your investment. The important thing is that the development potential contained in each new coin needs the most attention.The tip of investing from professional traders is to not buy a cryptocurrency simply because they are cheap!
- ۞ Rule 3: Check transaction volume
The liquidity and trading volume of money are an important metric in assessing its future development.Coins with high transaction volume proves that it is gaining high recognition from investors around the world and this indirectly guarantees the future of the coins themselves in the market. then, its trading volume must increase in proportion to its value.As a general rule, we recommend investing in coins with a trading volume of at least $ 10 million, and the probability of success investing in coins that meet this condition will be many times higher. compared to spending money on a coin with a low trading volume and waiting for the magic to happen.
- Smart cryptocurrency investment strategy
The best cryptocurrency strategy for 2020:A few months ago people were optimistic that BTC would soon reach the $ 100,000 mark this year or 2021 but at the moment the price of BTC has once dropped below $ 4,000 and is only recovering. back at $ 6762.73.Obviously this happens often in any trading market in the world. Of course the ultimate goal of the investor is to buy low and sell high but how do you know when the trend is? price reversed to be able to make a reasonable buy / sell order?This question is always a difficult problem for all investors and only devising a smart investment strategy can limit the risks and find reasonable entry points. Here are a summary of 5 investment strategies that you can refer to:
- Strategy number 1: start with small deals
As with any financial investment, when you're just starting out, put most of your capital into anything, start with a small investment and make sure that if you have one If you lose them, you will not be too affected by psychology. This helps you just have practical experience in investing on the other hand if the risk occurs, you absolutely have a chance to start again.
- Strategy No. 2: Spread investment
It's not always a good idea to invest in the top coins.Instead, use only 60% of your investment in the top 5 most valuable coins and the rest. divided into many allocations to other potential altcoins.After observing the price movements of these altcoins for a certain period of time, you will be able to find rules that influence their price trends.
- Strategy No. 3: Optimize assets
If you have idle cash funds and don't use it for business purposes, it can be converted into investments at a rate of 80% of the idle cash. allocate to the 3 most potential coins in the form of long-term investment and withdraw only when they reach your price target
- Strategy No. 4: Choose a suitable investment method
After taking a long time to understand the market as well as potential coins, the next thing you need to do is determine for yourself the appropriate investment form for each corresponding coin. different
Form of long-term investment (Hold): is the form of investment in which you will own the coin for a long time (maybe up to years) wait until its value reaches the expected price of the copy. Dear friends, in the process, you will continue to buy coin if it goes down. This investment method is only suitable for coins with great potential and strong development such as BTC, ETH.
Short-term investment (surfing): is the form of investment that you will rely on the daily price fluctuations of coins to make profit based on those price differences.
This form requires you to look for coins that have not too large transaction fees and fast money movement speed in seconds because with this form of investment, speed is the key to success in trading. This is not really suitable for BTC investment but only suitable for coins like XRP, ETH ...
- Strategy No. 5: Keep your distance in cryptocurrency investingInvesting in cryptocurrencies can create wealth for you, but be alert for tempting information in this market.It is best to treat your investments as your own working capital and for emergencies only, restructure your cash reserves and invest in this market. Moderately recommended by experts than putting all of their wealth into it.
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Thank you for reading my article. If you need any help, please let me know in the comments so I can assist you.
