Originally posted on lifestylemaniacs.com
There are more than 9000 cryptocurrencies on the market, but not all of them are a good investment. Just because it is available on a DEX like Uniswap doesn’t mean you should swap your money for it.
If you are familiar with the stock market, each stock has some fundamentals that can be analyzed and help you better understand if the stock (company) is worth investing in (e.g. financials, niche, CEO, vision, etc.).
Cryptocurrencies also have some fundamentals that can be analyzed. If you have been buying just because you saw the chart go up or because a friend told you to (like I did for a while), then you are not investing, but speculating.
Speculating is similar to gambling. You mindlessly put your money into some asset or bet and hope for the best. You mostly have a 50% chance of success, which is far from ideal.
Investing requires patient and careful research and there are tools out there that can ease the process. For your information, I am not sponsored by any of these companies. Let’s take a look, shall we?
The best starting point for our crypto research journey is CoinMarketCap. There we can find a lot of useful information about the overall crypto market and individual coins.
Coin market cap (obviously), volume, supply, company or coin description, analysis, rating, news, exchanges, socials, etc.
CoinMarketCap is enough for anyone to better understand what they are putting their money into. You already know more than most speculators out there.
CoinToBuy is very useful in analyzing crypto investment safety, potential profit, and hype. They calculate these values best on some ranking factors: volume, market cap, 24h change, social following, google trends, twitter citation, and user voting.
Basically, all the ranking factors indicate short-term hype. The higher the hype, the higher the profit.
The downside of this tool however is that you cannot spot long-term crypto investments based on fundamental analysis, just short-term hype.
The tool is very useful for traders though, because the ranking is constantly changing.
IntoTheBlock is more technical than CoinMarketCap and requires a paid subscription. However, it provides a lot of detailed information about some coins. It is mostly used for token economics (tokenomics).
CoinMarketCap has a tab called Analysis which offers a summary from IntoTheBlock, but it is not very clear. You need to get a deep dive.
Financial, ownership, network, exchanges, social, derivatives, and short-term price predictions are the feature we can find on this platform. It is quite interesting.
Crypto Rating Council
Here you can see if your favorite crypto is considered a security or not. Have you heard about the Ripple lawsuit? Ripple’s XRP was considered security and not a currency. Hence, XRP has the highest score of all on CRC.
Many crypto assets are close to being considered securities and this may negatively impact future prices. CRC is a good place to track those assets.
Every market goes in cycles, even bitcoin, and altcoins. The bitcoin cycle theoretically lasts four years (e.g. 2009, 2013, 2017, 2021, etc.), two bullish years, and two bearish years. Bitcoin’s halving date dictates the crypto cycles.
Look into bitcoin
LookIntoBitcoin offers very useful charts that tell you if Bitcoin is overvalued or undervalued. You should buy when undervalued, and sell when overvalued. Don’t FOMO.
If you don’t have the patience to read the project’s whitepaper like I do, you can search the project on Binance Research.
Here you can find “institutional-grade analysis, in-depth insights, and unbiased information to all participants in the digital asset industry,”, as they present. Indeed, here you find everything you need to know about a project.
How I use these tools?
- I make sure Bitcoin is not overvalued by checking the Bitcoin Rainbow Chart, Pi Cycle Indicator, and Bitcoin Investor Tool. Bitcoin is the main driver of the bullish or bearish crypto market;
- I choose crypto assets in the top 25 on CoinMarketCap;
- I make sure I understand and like what problem the technology behind is trying to solve, reading the Overview on CoinMarketCap or their whitepaper;
- I make sure the asset is not overvalued or overbought;
- I make sure it has good ratings on the Ratings tab on CoinMarketCap;
- I make sure the Safety Rank is higher than 4 in CoinToBuy;
- I make sure the active addresses are going up;
- I make sure there are less than 75% whales;
- I make sure the asset is on Binance;
- I make sure the asset is not a security;
- (optional, but powerful) I dollar cost average into the asset.
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Disclaimer: I am not a financial adviser and don’t recommend investing in anything as nothing is guaranteed. Everything I write on the topic is for informational and educational purposes only. Always do your research.