There are hundreds of cryptocurrencies on the market. One look at an exchange will give you a never-ending list.
Web3 is the new craze in technology. Everyone wants to get in and make money.
The top of the list consists of cryptos everyone knows, such as Bitcoin, Ethereum, Solana, etc.
But as you scroll down, you see dogecoin, Shiba Inu, BNB, BUSD, Avax, and countless others.
It is sometimes hard to decide where to put your money. We’ve heard so many stories of people losing their savings in the Luna and UST crash. It can be scary.
What makes it worse is that top celebrities promote scams to make money. They don’t invest themselves, but their followers invest and lose money.
Many coins are “pump and dump” schemes. Sure, you can make money if you buy early. But if you buy at the wrong time, you will end up losing a lot of money.
Everyone promises tremendous results and profits. This makes it hard to differentiate between good and bad projects.
So how should you invest in cryptocurrencies?
Should you believe anyone that makes absurd promises?
No, you should not. While you can never know which project will make you money, you can discern which project will burn down.
Here are a few tips to help you invest!
Stay Away from Bots
While Twitter is great for networking, it has a big problem with bots.
Crypto Twitter is one of the victims of this problem. Any hashtag that involves Twitter is filled with bot posts.
There are so many bots promoting random cryptocurrencies. They might even look like actual users.
You should stay away from cryptocurrencies that are overly promoted by bots. This sudden spike in tweets is done to arouse interest.
This usually means a whale wants to sell off their holding to make a profit.
They create sudden interest to increase the price before dumping. Buyers who continue to hold the cryptocurrency after the dump get screwed.
Basically, stay away if your Twitter feed is suddenly bombarded with tweets regarding particular cryptocurrencies you have never heard of.
Lack of Public Team
Projects must have a public team. Members’ details should be public. This includes social media handles and emails.
Public teams have accountability. They can’t steal public funds and get away with it. They are answerable to their followers and users.
You might say that the creator of Bitcoin is anonymous. Well, that’s one exception. While some great cryptos might not have public teams, it is great for evaluating new projects.
If creators are interacting with the public, it is a positive sign. This also usually means that they have engaging discord and Slack groups.
Lack of Any Use Case
When you buy any company’s stocks, you buy a part of a company. You make profits or losses based on the performance of a company.
It would be best if you treated cryptocurrencies in the same way. Ethereum, Polygon, and Link all have revenues. The difference is that the profits get distributed to people who participate in the network or system.
For example, Link is used to getting information from data Oracles. Link is used to keeping the system running.
Another example is the BAT token. It is used to reward users for their attention on the Brave Browser. Advertisement revenue is distributed amongst users.
While it can be fun to treat crypto and NFTs like gambling, it is not sustainable.
When building a strong portfolio, you should look at cryptocurrencies with good use cases.
In conclusion, buy cryptos of projects that create value.
So many projects and blockchain companies are shutting down. They didn’t know how to survive in the bear market.
That’s because they did not have a defined roadmap. They thought that they could make money off the 2021 bull market.
A project is a business. It must have deadlines and stick to them. It should become better.
But also remember to weed out the fake promises such as “Changing the world” and “Revolutionary product.”
Check out roadmaps of successful projects such as Polygon and Solana to get a good idea.
The world of blockchain and Cryptocurrencies is confusing. It is filled with all kinds of scammers.
Use the above tips to help weed out the bad ones.