Finding the best cryptocurrency to buy can be a tricky process. Many self-deemed experts promote various recommendations. However, if you don’t know why you’re buying a particular cryptocurrency, you could be investing in the wrong place.
You may see big names in the crypto world, like Bitcoin and Ethereum, and think that’s the optimum place to put your money. While there’s certainly an argument for investing there, many altcoins also exist. Some examples include Lucky Block, Aave, Shiba Inu, Stellar, Cardano, Curve, Decentraland, Algorand, Ripple, and so many others.
These altcoins all offer massive potential. However, it’s difficult to pinpoint any of these or others and say, “That’s the one!” Keep in mind that there are always risks. Buying the wrong cryptocurrency for your situation can have serious consequences.
Here is how to decide what cryptocurrency to buy, irrelevant of what advice you’re getting.
Look at Why You’re Buying
You may be buying cryptocurrency to hold long-term. How you strategize would differ from someone looking to buy and sell within 24 months. Some people buy crypto to participate in a specific space or area, such as DeFi, stablecoin trading, metaverse crypto, or scalable blockchain.
Since crypto continues to be highly volatile, you don’t want to jump in without a strategy. It will only result in clumsy decision-making and disappointment. Think about it and apply this approach when strategizing what coin to buy. When you are ready, head to a Bitcoin ATM near me and you to start investing.
Look at Past History
The first place many people analyze is a coin’s past behaviour. Fluctuations in price are common in the world of crypto, and they can be abrupt. Try to understand why the changes happened, if you can find the information.
When looking at the history of a coin, determine how volatile the value is. Will the currency remain resilient when the market takes a dip? Is the coin priced at an all-time high or trending downwards? Make an educated guess based on these existing indicators.
Look at Credibility
Some cryptocurrency coins do not have the best reputation. The backers or development process could seem a little sketchy. Likewise, maybe the coin has a history of volatility. There’s no reason to believe a crypto coin won’t continue to be highly volatile despite any prediction otherwise.
Avoid coins that don’t have credibility. There are many scams and hype on altcoins, stable-coins, and more. Always look for evidence and facts. Hype and speculation are not enough to build your investment, regardless of whether it’s short-term or long-term.
Avoid Meme Coins
A meme coin is a cryptocurrency like Shiba Inu or Dogecoin. It comes into the market capitalizing on a meme or current trends and then explodes in growth. All meme coins have a similar feel. They’re cute to own, but there’s no telling when the bottom will fall out.
For cautious investors, this is a sector of crypto most experts will recommend avoiding entirely. Meme coins don’t often serve a function other than capitalizing on something already popular. The result is a dated coin that is highly likely to collapse in value. At what time, nobody knows.
Look for Popularity
A cryptocurrency with a community behind it is an excellent indicator of its long-term potential. Browsing online communities like Reddit can show you a lot about what’s happening with a cryptocurrency. Many crypto coins are developing new applications, each brimming with potential. This search for crypto communities should be a part of your ongoing research.
Keep in mind this isn’t about buzz. It’s about legitimate people working with a crypto coin and on applications around it.
Look for Support Team
No cryptocurrency drops out of nowhere. There are big teams behind crypto and big investors. Look at who created the cryptocurrency and who’s bankrolling its development. Determine their ambitions for the coin and if there’s a proven track record of success behind them.
History will support the idea this cryptocurrency could grow. Once again, steer away from crypto built from a short-lived buzz. It’s like buying a car. Look under the hood and see how the engine’s running.
Look at the Technology
Do your research before heading to a BTM machine. You can discover a lot about the underlying technology of a crypto coin. Ethereum is a great example. Ethereum’s technology has smart contracts, can integrate blockchain into various applications, and makes it easy to create applications. In discovering the tech side of crypto, you also might uncover different companies and governments using a given coin, adding to its appeal.
Look at the Purpose
Some crypto coins have a defined purpose, such as Lucky Block. It uses blockchain technology to create a lottery competition. The competition offers increased transparency, reduced draw times, and increased chances of winning than the traditional lottery. Comparatively, Ethereum has different potential uses and seems highly scalable, which is why it’s the most popular cryptocurrency to buy in 2022.