The Fundamentals: How to Analyze Cryptocurrency

HOT TIP On both Facebook groups, click on the “File” tab to access educational documents that are definitely worth a read. Crypto Coin Trader – This group is heavily moderated and counts more than 115,000 active participants. You can easily access not only other members of the community but also the admins, which are more than willing to help you out. Doing your own research is all about getting different angles and opinions. Searching through forums, watching Youtube videos, talking to people… all these are simply tools in your toolbox.

However, most legitimate cryptocurrency projects will have a publicly listed board of directors or even partner organizations supporting and developing the currency. Lastly a nice thing to also check on once in a while is how Bitcoin is performing relative to the stock-to-flow model. If you don’t know what the S2F model is then CB has got you covered again. Shortly, it’s a valuation model that has so far proven to be one of the most accurate in projecting Bitcoin’s price.


The volume of all stable coins is now $22.81B, which is 95.23% of the total crypto market 24-hour volume. Now, put the pros and cons up against each other and determine whether it is worth investing in the cryptocurrency. Crypto prices are known to swing up and down wildly, but there are many factors that cause this. Token supply, marketing efforts, project milestones, and many other factors can greatly influence the price of a given cryptocurrency. All three of these statistics can greatly affect the price of a given cryptocurrency, so understanding supply is very important for cryptocurrency investors.

Therefore, before you put any money at all into a cryptocurrency, you should spend some time investigating whether the currency is legitimate or not. As I mentioned with LunarCrush you shouldn’t be relaying on just one of these tools and not even only those mentioned in these lists. There’re tons more useful tools and doing research also includes looking at the project site, including reading the complete whitepaper.

  • It’s also important to think about the potential use cases for a project.
  • It also has a great focus on decentralization and development, as well as celebrating and rewarding its community.
  • Every day several new projects are born and several of them die and newer coins are often experimental.
  • Generally, if you cannot find any crypto exchange (CEX or DEX) where you can buy a particular cryptocurrency, it might not be worth your time.

Most of the things they offer are free but they do have two paid plans available. First is the premium plan for roughly $4 a month which gives you an ad free CoinGecko. Then they have the premium+ for roughly $8 which opens up a lot more including access to their books, research reports, chat with their research analysts, and a lot more. The above mentioned methods are some of the common ways which we and many other people use to discover new Cryptocurrencies. We are pretty sure that apart from this list there are many other websites, forums, YouTube channels and social media’s that discuss about new crypto currencies. If you knew any such source then kindly mention it in the comments section which will help new crypto users.

As a platform that provides complex tools in an incredibly accessible way, yPredict has much potential, which gives its native token a chance to rally in the future. Decentralized finance (DeFi) platforms are a relatively new venue for crypto investments. They function like traditional finance marketplaces, except that they use smart contracts to execute transactions.

The above factors will give you some insight into whether a team is strong and likely to make their project successful. Bitcoin has been around long enough and has enough of a demand that supporting itself is enough. That’s not likely to be true of any other coin playing this game. In other words, Bitcoin is not a scam but any coin promising to be the next bitcoin is probably a scam.

If there is sparse engagement and no substantive discussion on any community platforms, this is a red flag. Cryptocurrency investing can be a great way to diversify investments, but figuring out which cryptocurrency is suitable and which isn’t can be challenging. To make an informed investment decision, it is important to know how to analyze cryptocurrencies. Based on your list, you will be able to find well-founded arguments for or against investing in a crypto project or cryptocurrency. Usually, only well-established cryptocurrencies are supported by hardware wallets. For smaller projects, you can usually use dedicated wallets or keep your coins in an exchange.

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By looking at a coin’s transaction volume for a certain period of time, you can learn a more in-depth observation point. According to Bitwise, who conducted a recent study, only ten exchanges show their real transaction of the volume of the coins in their platform. These are Binance, Bitfinex, Kraken, Bitstamp, Coinbase, bitFlyer, Gemini, itBit, Bittrex, and Poloniex.

That way, you’ll have confidence as you hold through any lows, or know if it’s time to sell. Ultimately, it’s your hard-earned cash, and only you can make decisions about what to do with it. In addition, looking at the number of people on the project’s watchlist, and whether it is listed on or CoinGecko, can also be a good confidence booster. BiteMyCoin has some of the best altcoins to watch in 2018 lined up for you to read next.

A red flag on any crypto project would be a white paper full of generic promises with no details. I analyze crypto trends and turn them into easy to read and understandable research articles for thousands of crypto investors. Because in the end, this is all about protecting your investment and avoiding mistakes I made a few years back. I lost a lot of money because I thought it was not worth spending some time to make sure a project was legit.

You will also want to see how the team communicates with the community and how their marketing is done, as this will be needed for a coin to go mainstream. It could raise a red flag when there is no track-record at all. However, this doesn’t mean a cryptocurrency can’t become successful.

When it comes to cryptocurrencies, you need to consider a few key factors before you decide whether to invest. Cryptocurrencies are built on solid software and there are genuine and promising applications for them. Furthermore, people do make money investing in cryptocurrencies, but people also lose a lot of money in cryptocurrency scams.