The only advice I will ever give anyone investing in the crypto currency is, educate yourself and do your own research!!!! These two things really go hand in hand as by doing one, you will be complimenting the other.
Presently there are no experts in the field of Crypto investments. Anyone who says they are, has either been lucky or is just a liar. None of the crypto projects currently have any revenues, earnings or profit margins. This means that there is no standard method to determine the value of a project, as none of the existing methods will work. This in turn means that the values and market caps being assigned to these projects are pure speculation.
Evan Ari Paul (@AriDavidPaul), who is someone I respect greatly in the space tweeted this on 23 Feb 18,
So, what do us mere mortals do to try and protect our investment and risk capital? Personally, I have a process that I follow before investing in a coin to try and give me the best opportunity to make the right decision. I’m 100% convinced this process can be improved upon so any suggestions would be greatly appreciated! However for those that don’t have a process, I hope this gives you a starting point and hopefully helps you make better decisions.
The best place to start is reading the White Paper. If you don’t read the whitepaper, it’s like buying a chocolate bar without knowing what flavour it is and when you take your first bite, it tastes horrible. The white paper will tell you what the project is trying to achieve.
It will also tell you things like what is the token distribution? Are the founders holding back most the tokens, where is the money raised going to be spent if it’s an ICO. These can also be an indicator of whether it is a money grab or a serious project.
Watch videos and listen to interviews on the project to gain further insight. Don’t look for just the positives comments and viewpoints, look for interviews highlighting flaws or negatives in the project so that you can get a balanced view.
Research the team! What experience do they have? What did they do before this project and are those skills transferable? Are they new to blockchain? Have they worked on other projects? Have they run a million-dollar company before? Remember that at the end of the day, no matter how good the tech, if they have not run a business before, what chances do they have to succeed? Be as honest and brutal as you need to be, remember its your decision and your money at the end of the day! I know how I approach it.
Have a look at their social media and community. Twitter, Reddit, Telegram and as previously mentioned videos and interviews. On socials, you will get both positive and negative comments. Consider these as part of your research and don’t just look at the “moon” comments. Remember, you only stand to lose your own money if you make bad decisions.
If there is a working demo or Beta product, use it and play around with it. This will give you a feel of what the project is working towards. Also consider if the product is something that you would use in your everyday life. Remembering that if people don’t use it, how will it grow and how will the value of the token grow?
What is the tech about? If you have the skill and a programming background, have a dive in to the code and see if it does what it says in the white paper. Personally, I don’t have this knowledge so am not able to do this.
This brings me on to knowing your weaknesses. We all have strengths and weaknesses, find out what you are good at and fill your areas of weakness with help from others. Reach out to crypto meet ups, communities etc and grow your network. Everyone has a different point of view and the more points of view you get, the more balanced your decision making should be.
Finally, and probably most importantly ask yourself this:
What real world problem is the project trying to solve and does it need a token to solve this problem?
Remember you are the only one that decide whether you invest in a project or not. You need to be a control freak with your money because everyone else will gladly take it off your hands!
Disclaimer: This is not financial advice and only my opinion.
Link to the best Crypto Course in Europe that I myself have paid for and am a community member of:
http://bit.ly/Crypto_Tsunami_Blockchain_Ray