MARKET CAP SIZE ANALYSIS
Among all our tips, we have not yet talked about a very important point: the total market capitalization of the cryptocurrency in which we want to invest. This will be our 8th point.
Many newbies rely solely on the unit value of a cryptocurrency (price) to determine its upside potential. This is absolutely not the indicator that allows you to determine the power reserve of a cryptocurrency.
For this we have to analyze 2 different factors:
1. Its total capitalization (market capitalization). It is calculated by multiplying the value of a token unit by the total number of tokens in circulation. High market cap with less upside potential than weak market cap.
2. Increase in capitalization since the ICO. A cryptocurrency that has already gained more value since its ICO is less likely to be promoted. On the contrary, a cryptocurrency that has plummeted since its ICO may actually turn out to be a scam.
Hence, it will be necessary to be very careful with the high capitalization and conduct a thorough research of the cryptocurrency, which has dropped in value after the ICO, because this could mean several things:
1. The project is a scam.
2. The team is working hard on the project and is not marketing it yet.
3. Market conditions were extremely unfavorable and capitalization fell along with the rest of the market.
9. MONITOR YOUR RESULTS
Now that we have reviewed all the best practices for proper cryptocurrency investing, our 9th point will explain how to track the evolution of your portfolio.
After investing in a project, 3 scenarios may arise:
1.you make money
2. Your investment remains stable.
3. You are losing money
Keeping track of your results can be tricky because you need to check each of your assets one by one and see how they have evolved since you last viewed them.
Fortunately, there are smartphone apps that allow you to instantly and automatically track your results.
To do this, you just need:
1.the quantity you own
2. Enter your cryptocurrency
3.Purchase value
4.date of purchase
After that, applications will provide you with extensive information.
Here are two mobile phone apps that will allow you to track your results wherever you are:
1. Blockfolio
2. Delta
Try these two apps and choose the one you like best. Be careful, these apps are addictive and you can watch your crypto wallet develop every 5 minutes.
10. SECURITY OF YOUR CRYPTOCURRENCY
Our tenth and final piece of advice concerns the security of your cryptocurrency. You've probably already heard about bitcoins stolen by hackers. Unfortunately, these stories, unfortunately, are true and have always been at the same level: on the cryptocurrency exchange.
Therefore, it is advised to take extra care and not list your cryptocurrency on exchanges. It will be stored in a so-called cryptocurrency wallet. There are different options for this:
• Metamask wallet for ERC-20 tokens
• Physical storage medium such as the Ledger Nano S
• A dedicated portfolio for a specific cryptocurrency.
Thus, you practically eliminate the risk of losing your cryptocurrency.
OUTPUT
So, we have come to the end of our guide with tips for optimal investment in cryptocurrencies. We hope this helps you to make the best possible investment at its best. And above all, it will save you from mistakes that can be financially costly.
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