Is the crypto project you want to invest in worth spending your money?

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Now that another bear market is close to its end, everyone has finally understood that cryptocurrencies won’t go anywhere. Few people have never heard of blockchain-based assets, most know at least the name of a couple of popular digital currencies, and many have already invested in projects. Most investors first check the Bitcoin price usd before they research the other cryptocurrencies because Bitcoin is the most popular digital coin and they want to compare its evolution with the others to make sure they pick the best solution for their portfolios.  Suppose there are beginner investors who want to explore the crypto market but can’t figure out which project would suit their needs better; this article provides them with guidance. 

When promoted, all crypto projects are eye-catching, but it’s not safe to pledge your funds to every new one launched on the market. It’s paramount to understand how to analyze a blockchain-based asset’s potential to deliver a return on investment. Once in a while, a new shiny blockchain-based asset is released on the market, drawing everyone’s attention. It doesn’t necessarily mean that it’ll also be successful. You might put all your money into it and end up empty-handed. Even after all the years of existence in the crypto sector, it still witnesses scams from time to time, and you would want to protect your portfolio from being exposed to one. 

Here is how to verify if a crypto project is worthy of your attention. 

Create your investment thesis

If you browse the crypto market, you’ll notice that there are thousands of projects waiting for someone to invest their funds. However, before putting your money into something, you should engage in some analysis because you need to figure out if it’s a suitable addition to your portfolio. You can start by exploring the multiple sectors functioning within the crypto market, identifying those with the highest prospects to perform in the future and finding the most relevant players that innovate the sector. 

Here are a couple of questions you should answer when trying to filter through the results. 

– Is the sector I plan to invest in relevant to the crypto ecosystem?

– Is the project scalable?

– Will the sector be relevant in 5 years/10 years from now?

– Which one of the projects I put on the list stands out?

Does the team behind the project have a long-term vision?

You can tell if a project is about to gain success if the developers have a long-term vision. It’s crucial for crypto projects to have roadmaps because they enable developers and end-users alongside to understand the evolution of an asset better. It also enables the team behind the project to share with the public how they plan to meet their goals. 

Unfortunately, developers could create fictive roadmaps, and if you lack knowledge in the sector, you won’t be able to identify their flaws. It’s actually quite challenging for someone lacking technical education in the blockchain space to determine if a roadmap is feasible or not. 

It’s best to invest in a project with a long history on the market so you can check if it missed any deadlines described in the roadmap or failed to deliver any promised features. It’s understandable for some mistakes to happen from time to time as blockchain is a complex technology, but you must look at how the team behind the project shared the failures with the community and if they are transparent about the challenges they experienced. 

What’s the token’s utility?

The utility of the crypto asset is the differentiator between a lucrative project and one that’s meant to fail. The token’s utility decides its longevity on the market because it’s supposed to serve the public in the long run. Hence, you should always check it to ensure that the project you’re going to spend money on has a high likelihood of surviving. When you pick an asset to add to your investment portfolio, ensure that it has value in the sector because if it doesn’t, what’s the purpose of purchasing it?

When a project has no long-term utility, the demand for it will drop, and it will eventually cease to exist. A future bear market will definitely wipe it out of the sector. 

Does it have a sweet spot on social media?

You want to invest in a project with a large community, so it’s essential to evaluate its presence on social media. Reliable projects are usually mentioned in several publications, and investors and crypto experts discuss them quite often. Take time to investigate the projects’ presence in media and take a look at the pages and publications that market them to figure out if they are genuine in offering information or promoting the projects that pay them the most. 

You should find online information that discusses both the advantages and disadvantages of a project. When you see only good reviews, the piece of content is most likely paid advertising. It’s up to you to evaluate its media presence and figure out if it naturally gained media attention, or generated it through PR effort. 

What’s the state of the project?

You covered most details about the project. You can tell if it can match the market’s requirements in the long term and if a strong community supports it, so it’s time to dive deeper and find out about its current state. 

It’s essential to determine if it already runs on a blockchain or if the developers are still testing some features. Please have a look at the technology because it will tell you more about its current state. You might want to put your money into a product which is still in the developing stages because it might require a lower initial investment

What’s the focus of the developing team?

What do the developers aim for? If the team behind the asset is more focused on how to make money than on how to upgrade the project and deliver better results to the users, then you should turn your attention towards another asset. 

Unfortunately, often, crypto developers aim to make money out of their projects and don’t follow the vision they present to the public. It’s therefore advisable to put your finances into a project with a proven history in the sector so you can check if the developers kept their word. 

Disclaimer: The San Francisco Weekly newsroom and editorial were not involved in the creation of this content.