What Are Some Indicators of a Great Cryptocurrency to Invest In?

CryptocurrencyWhen deciding which cryptocurrency to invest in thorough research is required. Today, I will be talking about a few indicators you can spot in order to help you decide which cryptocurrencies to invest in.

First thing you can consider is whether the crypto has a significant user-base. You should be looking at cryptos that have a significant user-base and a sound usability. Good examples include; Ethereum and NEO, smart-contract blockchains and platforms for apps to be built on; Steemit, a social media platform that allows readers to reward curators with Steem for their content; TenX, a cryptocurrency payment and transaction system; or Zcash, a privacy coin that allows anonymous transactions via encryption methods. Look at coins that are huge differentiators; coins that may be disruptors in industries in the future. Usability also includes whether the cryptocurrency is supported by a variety of cryptocurrency wallets. A cryptocurrency that isn’t supported by different wallets or lack a method to utilize its currency to make transactions may see a small user-base. Additionally, find out how many exchanges can the cryptocurrency be purchased in. More exchanges available means larger user-base.

Another indicator is whether the cryptocurrency’s developers are constantly updating their technology. You want to know if their team is active in the project. You can find out by checking their Github repositories to check when they last updated. In my opinion, they should at least be making quarterly updates. Reddcoin is an example of a cryptocurrency that has not been updating as often as it should. Reddcoin is a cryptocurrency similar to Steemit. Its last update was made 9 months ago from this article’s date of posting. You should also check out their social media profiles to check the last time they have announced any updates. Reddcoin, for example, was last active on Twitter in June this year. That was 3 months ago. This certainly would make you anxious and question their credibility. Judging from these factors, you can expect to lose your investments in the long term with Reddcoin.

You should also consider the circulating supply of the cryptocurrency. You ought to look for cryptocurrencies that have low circulating supplies such as GAS, which is currently at 8,446,908 GAS. An example of a cryptocurrency with too high of a circulating supply is Ripple, which is at 38,343,841,883 XRP. The reason being is that the more abundant of a circulating supply a cryptocurrency has, the less likely or slower its value will increase to a large value like the values of Bitcoin, Ethereum, and Bitcoin Cash. You most likely will see small gains with investments on cryptocurrencies with high circulating supply. This however will not be an issue for investors who are willing to purchase a huge amount of coins, for example, 10,000XRP to 100,000XRP; which is around $1,800 to $17,500 in investments. Only then can you expect significant gains. Ideally, you want to look at a circulating supply of less than a billion and a maximum supply of less than ten billion.
The quality of the cryptocurrency’s website is an indicator too. A decent quality website implies that the team is serious and dedicated to their mission because they have put the resources, time, and effort into what they are doing. If the cryptocurrency has no website, that is a huge red flag.

In summary, weigh the cryptocurrency’s usability and value proposition, check out their social media profiles to find out how active they are, assess their circulating supply and maximum supply, and check out their website. You can find out exchanges cryptocurrencies are listed on and their supply at CoinMarketCap. Be wary of inactive cryptocurrencies and scammy cryptocurrencies.

Please note that I am not a financial expert. I am simply sharing my opinions on the topic. Do not take my words as financial advice. Always do your own research.

Get the latest in Asian Bitcoin news here at Coin News Asia.

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  • Dan Sicado

    This is great! Thank you!