Crypto investment – guide to analyze for positive ROI
Every investor aspires for positive ROI while putting his hard-earned money in an investment asset, be it a company’s stock or a cryptocurrency. But, the potential of high ROI for cryptocurrency investment (or any other investment asset) depends largely on the crypto you choose. It’s especially significant in the crypto world – while the crypto verse is welcoming new cryptos every month not all cryptos can assure you high returns. Thus, you must deploy due diligence while choosing a crypto for a profitable cryptocurrency investment. Visit now Bróker de trading Forex, metales, acciones e índices | Grupo Multibanco
There are two ways to evaluate a crypto while analyzing it for cryptocurrency investment. One is through fundamental analysis while the other is through technical analysis. Now, the technical analysis evaluation is mostly common for trading a crypto while the fundamental one is usually popular for cryptocurrency investment. However, you need both to land up with a complete evaluation while choosing a cryptocurrency for investment.
Fundamental analysis
The fundamental analysis focuses on the fundamentals of the crypto you are about to choose for cryptocurrency investment. The term “fundamentals” here refers to the attributes that make up the crypto project. Here is a brief on the attributes or aspects that you have to study to carry a fundamental analysis of your chosen cryptocurrency.
The team
A reliable crypto project would generally disclose the credentials and name of team members. So, make sure to study the team behind your chosen crypto for cryptocurrency investment. Try to gather an idea about their professional background, expertise, vision, and specialization. You can also study their profiles on LinkedIn.
Added to the founding members and the CEO, study the list of advisors behind the crypto projects. The team could be a new one but if the project has been able to garner leading crypto experts as advisors, the crypto could be worth a shot for your cryptocurrency investment.
If a crypto project is not willing to disclose about team members, consider a big red flag.
The whitepaper
You must study the crypto project’s whitepaper if you are considering crypto for cryptocurrency investment.
You need to understand the mission and goals of the crypto where you are planning to put your hard-earned money in. The whitepaper of a crypto project will generally outline all the key fundamental details about the crypto project, such as objectives, use cases, reason behind the launch, future plans, and so on. Look for a crypto that is backed by a realistic use case as otherwise it won’t be able to sustain itself in the cut-throat crypto market. You can’t put your hopes and money into a crypto project that cannot promise long-term sustainability and growth.
The roadmap
You cannot expect a crypto project to grow if it doesn’t have plans for upgrading.
So, make sure to study about the roadmap of the crypto you have chosen for cryptocurrency investment. Check out the project’s future plans, plans for fork, further developments, and so on.
The community
You should also need to browse through the online forums and discussion groups while evaluating a crypto for cryptocurrency investment.
A promising crypto project would always draw people towards it and would be backed by a bustling community. You would know that you would be able to bank on a crypto for cryptocurrency investment if the community is hopeful about a sustainable future of the crypto.
Now, it might be slightly difficult to find several discussions and comments on a crypto if it’s a new coin/token. Thus, the smarter thing would be not to focus on recently launched cryptos for cryptocurrency investment. Rather, you should wait for some time, say more than 6 months. By that time, you will be able to find a sizable number of posts and discussions about the crypto.
Technical analysis
Technical Analysis aka TA refers to study of the previous market conditions or status of the crypto you have chosen for cryptocurrency investment. The study combines patterns and statistics to find or predict the market condition of the crypto in future. In that light, TA involves study of chart patterns , price action, volume, trends, indicators, and all those factors that would help to predict price movements of the crypto in future.
Now, of course, these predictions might not match up with the actual outcome in future. However, TA is always relevant as it helps to attain a basic picture of the future market condition of your chosen crypto for cryptocurrency investment.
TA is handy for crypto market
TA has always been a fundamental part of the traditional investment and trading market. However, with the launch of crypto, it seems that TA might be more relevant especially for this emerging asset class. It’s especially because the crypto industry presents an unstable and volatile market, and cryptocurrencies are majorly speculative assets. Now, it is always more arduous to come up with a reasonable prediction and valuation for speculative assets.
You don’t face this problem with stable assets like share prices of company stocks. It’s because these share prices (of a business) are pegged to the overall performance of a company. When it comes to evaluating the performance of a company, you can have real-world tangible data for easy analysis. But, it’s not the case with cryptocurrency as the asset class is still in its infancy.
Hence, cryptocurrencies are classified as “speculative assets’ ‘. Investors here mostly have to evaluate crypto for inversión en criptomonedas based on guesswork and speculation. It also implies that in the crypto sphere, price swings are mostly inspired by human instincts or emotion. As a result, cryptos are able to respond or behave more compatible to the process of finding price movements and patterns- the heart and soul of TA.
Final words
You will need to make a shortlist of 5-6 top cryptos for cryptocurrency investment.
Once you make that list, the next task is to individually study each of the cryptos in the list. Follow both fundamental analysis and TA as mentioned above to get a complete picture of the profit potential and investment worth of the crypto. It will take some time but the study is worth it.
