Choose The Right Altcoins With These 3 Tips
Tags: Cryptocurrency, Finance, Fintech, Altcoins, Blockchain

If you do not live under a rock, you’d probably be flooded with news about cryptocurrencies and blockchain technology. Once a niche subject area, it feels like 2020, in all of its peculiarities, has shone the spotlight on the new role that cryptocurrencies can play in our increasingly digitized future. With news of Bitcoin surging past $20,000, DBS launching a digital currency exchange and other players coming into the crypto space, it is hard not to pay attention to Bitcoin and other altcoins that may possibly bring you a windfall.

So if you are like me, you’d probably be feeling a little FOMO now, looking at your friends who have leapt onto that Bitcoin bandwagon years ago who are now enjoying the moon (as defined by coinmarket cap, “a situation where there is a continuous upward movement in the price of a cryptocurrency”). But the perennial question is “what altcoins should I buy?”

I’ve been there and honestly, I don’t fault you. With over 5,000 altcoins in the market that (more often than not) seem one and the same, there is not only decision paralysis, but also huge difficulty in differentiating the good ones from the bad.

But lucky you, because in this article, I’ll be sharing 3 factors that I personally look at when choosing which altcoins to purchase and hopefully, my two cents can help get you started on your journey into the crypto space.

Financial Performance: market cap, circulation and trends

So this may seem really obvious but many new investors often are driven by emotion and buy into projects that are overhyped and which die out shortly after. Unless you have a huge pile of cash at home which you don’t mind splurging and handing out for free, you gotta do your due diligence.

Just like any other investment, an investment in the crypto market will warrant some in-depth research on your part in terms of the coin’s historical performance, market capitalization and circulation. Coinmarketcap is a great resource to look at. On its website, you will be able to see essential information about each altcoin: its price, 24-hour and 7-day change, volume and circulating supply. To see a cryptoasset’s trajectory over the past week, there is also a small graph visualization at the bottom. One other feature that I like a lot is the ’market pairs tab’ under its ‘Details’ page. Each market pair has their own confidence indicator, which helps you pick an exchange to trade your crypto. According to Coinmarketcap, its confidence score reflects the liquidity of an exchange. So basically, the more liquidity it has, the easier it will be to trade crypto.

2. Project’s Aim

Make it a point to truly understand the project’s aims and its roadmap for the future by looking at its whitepaper. To me, projects with a weak purpose are flimsy and easily beaten down by other projects that aim to alleviate or solve a real world problem, such as security of assets, banking the unbanked or increasing accessibility to affordable credit.

You can find out more about this via the project’s Reddit or Discord pages as well as their telegram group chats.

3. Find out more about the team behind the project.

Going a step further, also learn more about the founders, developers and CEO of the project and attend the events to listen to what they have to say about their vision for the future. This is so that you aren’t putting money with people who are merely building castles in the air!

This is something that I pay particular attention to because at the end of the day, the people who drive the project play such a huge role in the project’s success.

One of my favourite projects has got to be EMOJIS.farm, where they have been extremely transparent since day one.

EMOJIS.Farm was borne out of a desire to unite the DeFi community and through providing an active and fun reward environment, catalyze user adoption and create a self-sustaining community who can enjoy greater liquidity and stability.

The project is backed by the Consentium ecosystem, a revolutionary platform that bridges the gap between social communication and cryptocurrency. Operating on its own proprietary blockchain, CSM Chain, Consentium has a higher TPS that allows its 100,000-member strong community to enjoy a more seamless transaction experience. In the near future, Consentium aims to become the premier chat platform and super-app for the DeFi space and has many exciting plans in the pipeline to expand its ecosystem.

Not only does this project have all this information on their website, they also provide opportunities for $EMOJI users to engage with the team on project details and future developments. One most recent event was the Block Live Asia event, where users had the opportunity to hear from Jeremy, a partner at Consentium and EMOJI. The talk not only allowed me to clarify some of my questions about the project, but also further cemented my trust in the founders to do the best they can to keep the project running smoothly.

Personally, I am excited to see the role that cryptocurrencies will play in our post-covid future. But once again, beware of falling into the traps of the hype that sometimes gets people a little too carried away and do your due diligence before committing to any altcoins.

Till the next time, friends online!

Gale