You see commercials about future ICOs, but you still feel hesitant as you are unsure of how it will earn you profit. The market of cryptocurrencies today has gone through a massive fluctuation because of the latest projects. They are not beneficial, however, which makes the value of the token decrease.
Use the following seven points to help you in avoiding these kinds of ICO scams before you invest in a future Cryptocurrency or ICO.
Positive ICO News
The value of a future ICO is mainly determined by the people’s view of it and the public’s present opinion of the coin. If individuals think that a coin is on a downward spiral, they start trading, thus decreasing its value more. However, if you wish to invest in the long term, you should not give much thought to the small challenges.
How Useful is it in Solving Real Issues?
Find out the actual value of the ICO. What problem does the digital token aim to resolve? For example, there were several useful reasons for setting up Bitcoin. It solves the problem of transaction fees, facilitates the confidentiality of its traders and provides a real-time exchange for users in a decentralized network.
Technological Growth and Strategy
People examine all aspects of the business if they want to invest in it. They find out the perks the company offers to find out its success rate as well as the group managing it as well. When using a crypto investment technique that is long-term, you need to use this method. Technology has an impact on ICOs’ viability, how developed it is and the individuals answerable for it.
A Steady Increase in Transaction Volume
The coin’s transaction volume presents a crucial metric you should keep in mind. It describes the amount being traded or used. Login to your favorite cryptocurrency exchange and view the volume over a long time period. This data assists in finding out whether the transaction volume is high and whether the wallet numbers have increased.
If this is the case, it indicates that the coin is on demand and a lot of individuals are using it. Significant increases in a short span may be short-lived. It is essential to examine these metrics in a longer timespan.
Provision of Coin
Another error that investors make is deciding quickly to invest in an upcoming ICO because of the lower price per coin. But, it does not promise good returns. Some individuals believe that a project with affordable coins is better in contrast with the ones with low supply that are expensive where cost per coin value is concerned. However, an investor needs to find out why each Cryptocurrency has a fixed price and how many coins are there for trading.
It is necessary for you to know a coin’s market cap. A formula or equation forms the foundation of each cryptocurrency. Therefore, every kind of crypto offers some amounts of coins. For a potential investor, the most fundamental reason is how it is going to connect to the demand for law and supply.
Total Market Share
You need to find out the possible value of a coin and its market share. It illustrates its market capitalization compared to the different cryptomarket linked to its rivals. It is useful in revealing the health of the coin and its long-term usefulness. A significant coin market share shows that a lot of individuals are using it. The versatility of the coins is impacted a lot by the number of potential users and holders.
When you learn the elements of a coin above, you gain enough information to decide whether or not you shall invest in a coin.