Aug 4, 2021
Wise Investing — 5 Logical Things To Look For In A Cryptocurrency
Cryptocurrencies have taken the investing world by storm over the last decade.
Ordinary folks who never dreamed of playing the markets have been diving in, and often making a bundle.
That doesn’t mean it’s necessarily easy, though — or always safe.
While cryptocurrencies can be a great way to invest your money, they always come with some risk.
Not all investments are created equal, some are much safer than others.
Here are 5 logical things to look for before investing your money.
- Doxxed Developers
This means that the team behind a currency isn’t hiding behind the anonymity of the internet.
Their identities are publicly available.
While nothing absolutely guarantees the safety of a currency, the fact that the developers are willing to publicly put their names to it is a great sign that it’s above board.
2. Marketing
The rising value of cryptocurrencies is assured by the ever-increasing flow of money invested in them.
A well-constructed token structure will often put a small amount of money from each purchase towards marketing the cryptocurrency to new investors.
Knowing that the currency will continue to be advertised is an excellent sign that you can expect it to keep on growing.
3. Deflationary
Another great way that currencies can be set up to ensure they regularly increase in value is through currency burning.
The way this works is by having a small amount of each transaction sent to a “dead wallet.”
The “dead wallet” approach is sometimes referred to as a black hole, or a burning because the currency that goes in never comes back out.
Burning the currency results in less overall being available, so the value of what remains automatically increases.
4. Holding Incentives
Some investors like to buy and sell their currencies constantly, and that’s not the best thing for the tokens in question.
A good sign of a wise investment is an incentive for token holders to keep their currency, rather than selling it off.
This usually comes in the form of some kind of regularly distributed rewards for token holders who own a certain amount.
5. Liquidity
This is important for any tradeable asset.
Keeping a certain level of liquidity ensures that the currency can be bought or sold quickly without affecting its overall price.
Many of the better cryptocurrencies are designed to automatically ensure liquidity through the use of a “liquidity pool.”
If you’re just starting your journey into investing, it may be a good idea to also look for a currency that provides a learning opportunity.
Some of the best currencies are geared towards beginners and will provide things like 24-hour financial advice via voice chat.
If you watch out for these simple signs when looking for a cryptocurrency to invest in, you should be able to find one of the better options.
Good luck, and happy investing!
Disclaimer: The information provided on this page does not constitute investment advice, financial advice, trading advice, or any other sort of advice and it should not be treated as such. This content is the opinion of a third party and this site does not recommend that any specific cryptocurrency should be bought, sold, or held, or that any crypto investment should be made. The Crypto market is high risk, with high-risk and unproven projects. Readers should do their own research and consult a professional financial advisor before making any investment decisions.
