When it comes to cryptocurrency investing, it’s important to understand the underlying fundamentals with five questions.
What is the purpose of coin? Is it quick, reliable technology that’s easy to use? Is there a solid team behind the cryptocurrency? Growing adoption in the press? High demand for coin, or low?
What problem does it solve?
This is one of the most important factors is determining the potential long-term value.
In fact, we’ll often advise that you think of crypto like a tech stock. What’s the purpose of technology? Does it solve something that has real world value?
For example, Bitcoin has been used for many payment solutions, including everything from international payments and online gambling sites to paying for pizza…
Ripple for example is a tool that’s use to exchange money across borders.
IOTA developers created the coin to enable Internet of Things (IoT) devices to make micropayments to each other, as well as to traditional bank accounts.
Who is on the development team?
Whether you’re getting involved with an existing crypto or even an ICO, or an Initial Coin Offering, which acts as a fundraising mechanism for new projects, understanding who is on the development and management team is one of the most important steps when you invest.
Is there high demand for the coin in question?
If there’s not enough demand, there may not be much reason to buy a particular coin. We want to make sure the cryptocurrency is very liquid with higher trading volumes. If not, buying and selling can become difficult.
Also, is the coin getting a good amount of press? If not, why?
These are just some of the questions to ask, and answer before investing.
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