How to Recognise your crypto investments potential?
Is it going to the moon or not? Is it bad because someone said this or that about it?
I will tell you 3 simple steps which you can use to understand the potential of any crypto even if you are not so technical to read the trading jargon.
Without wasting time these three steps are:
- Use Cases
- Circulating Supply
- Industrial Collaborations
- Use Case: One of the biggest indications that a cryptocurrency will take off is the use case of that crypto. So what is a use case. Think of it as the problem the crypto project is trying to solve in the real world. This is a really important factor to take into consideration. Example of some famous cryptos like Ethereum is that it brings in smart contracts which will be helpful in finance, business and other industries. As we move towards more online applications for business and web applications, this will be a huge advantage and that is why we can see the value going up in the near future and even in the past year.
You can research about this on various sources but the main source of truth about what problem a crypto is solving is available on their website.
2. Circulating Supply: This is a great way to understand if the cryptocurrency is already in use in the market. The more the circulating supply in the market, the more the demand. IT is like a supply and demand method. Circulating supply lets us know if there's any application for the cryptocurrency and if people are already using it for various purposes. You can find this information on most of the price analysis websites including coinmarketcap.com or coingecko.
3. Industrial Collaborations: This one is something that I definitely look for when investing in any cryptocurrency. For me it is really important that I see the potential of a future where the crypto I’m invested in is of wider use than just being used as a stock or store of money which might go up. This is just my personal advice no financial advice. To find this kind of news or information, you can keep an eye on crypto’s website where you will see most of the collaborations update. You will also see this on different platforms like Decrypt. I mostly use these or try to find credible resources online. Rather than listening to the mainstream news which has surface level information.
