Crypto news is flooding the banks of information sites like CNN, BBC, Al-Jazeera… your social media platforms and feeds.
This has become a little bit of a cause than a blessing depending on where you choose to be.
Why?
Scammers everywhere.
People bring up projects that are not genuine.
Because of this trend, we want to bring to you a few tips you can use to spot or do a critical analysis on certain projects before investing in them – whether Shitcoins or Altcoins or whatever coin they’re called.
Let these parameters guide you and thanks to Hazelvelvet, a Reddit user who gave this compilation as signals.
Signals mean that they are guides and not absolute… so that any decision you make off it is your responsibility.
Why did we call him a Lonner?
He has been a trader for a while and has experienced both sides of trading as he said, “I trade small coins for a living. In the beginning, while learning, I fell for all the scams just like everyone else. But with every loss, I learned something new and I’m now pretty good at it. Yes, I have losses like everyone else, but usually, I get out with very small losses compared to my gains.”
While he agrees that every project will always start from 0, and needs time to grow, here are a few tips, in summary, you can use to gauge a project for investment:
Use what you can lose…
Why?
You can lose or win in any investment. So investing a little portion of your money per time in any project is safer.
If it works, fine. If it doesn’t, it will not hurt as much.
I know some would go all in. And it pays off. Well, can you do so?
Remember, …
… if it works, you get the victory. If it doesn’t, you equally manage the loss.
Check how many holders are there…
According to Hazelvelvet, “a healthy new coin should have at least 200 – 300 holders. If it doesn’t, abort immediately.”
It means you have to research to know the number of holders for that coin.
Why?
Community is almost at the center of crypto investment. The more acceptable it is the more legitimate it becomes.
Take a look at the bitcoin case. Initially, not everyone wanted a Bitcoin. But when it gained more acceptability, the game changed.
Check the liquidity pool…
“If it has a few hundred dollars or even only $5k or $7k, abort immediately” advises Hazelvelvet.
The liquidity pool talks about how much money has been collected to make that project a success.
Another is this…
Check the number of transactions per minute ⏰
In Hazelvelvet’s opinion, a good number of transactions for a new coin should be about 5 – 10 per minute.
Higher should be good or better but lower is a red signal.
Check their online presence…
This is very important… From their website to Facebook, Instagram, Twitter, Telegram, and Discord community which is becoming popular amongst tech-driven projects.
As you see these platforms, you’ll have a deeper understanding of what it’s about and not a flaky feel of “I love it or it’s cool.”
Check for the team behind the coin…
Without a good team, nothing works well.
CZ is one of the major reasons why Binance will keep doing well.
His person and the team surrounding the project are making it possible and easier for trust to be built between the company and users.
When you do team research and you’re able to see real faces and their contacts, it shows authenticity.
Why?
No one wants to be publicly part of a faulty project. They know that people can see them and hold them responsible for whatever happens.
Lastly…
… don’t be in a hurry to invest. And if possible, invest by yourself, and always have a community you belong to.
In the multitude of counselors, there’s safety.
King Solomon
Blockchainemy 