Whether it is crypto, any other asset, or even your time it is important for the person to DYOR (i.e. Do Your Own Research) before investing in anything.
What was or what is suitable for someone else might not suit you, thus conduct the research as per your choice, your suitability, and your needs.
This suggestion can be applied while investing in crypto also. If you invest in crypto on the basis of tips and suggestions by others then this article might not suit you. Because here, we will try to focus on how a person can start researching where to invest in crypto.
Let us start by knowing your coin!
There are various websites from which one can know about the coins and their current trends like CoinMarketCap, Coingecko, etc.
Through such websites, we can study our coins easily.
Let’s start with CoinMarketCap!
CoinMarketCap
In the above image, you can see a part of the website of CoinMarketCap.
At the top, the site mentions the number of cryptocurrencies available, the exchanges available where we can buy and sell the crypto assets, the market cap which is the total amount invested in the market, 24hours volume which is the number or volume of the buy and sells that took place in the last 24 hours, Dominance of Bitcoin and Ethereum (it is observed that when the dominance of Bitcoin falls then comes the Alt season which means the Altcoins go up, if you are unaware of Altcoins then let me mention that anything apart from Bitcoins are Altcoins or Alternative Coins), and the gas rate of Ethereum.
Source: CoinMarketCap
In the above image showing another part of the website, we can notice the rankings provided for each coin which are based on the market cap.
The coin with more market cap is at the top.
The ones with a price of $1 or near to that are known as stable coins like Tether, USD Coin, Binance USD, etc.
The table of these coins depicts the prices which keep on updating in the real-time, the percentages with which the coins moved up or down in the past 24 hours and past 7 days, the Market cap, Volume in the last 24 hours, the circulating supply, and the past history of the last 7 days.
Now, what is the circulating supply?
It is the number of coins that are being circulated in the market.
NOTE: While researching one must always look upon the circulating supply and the total supply because it will help us chalk out whether that asset is an inflationary or deflationary one.
If there is an unlimited supply of such crypto-assets then it would become difficult to appreciate its price.
For an instance, let us consider that we are knowing our Bitcoin. Now, how will we research it?
In the above image, we can see there are various options showing: the one which would direct us to the Bitcoin’s website, Explorer helps us to know if the transaction is confirmed by checking the addresses of the buyer or the seller, Community provides us information on the views and ideas of people, Source Code which contains the code written for that particular coin along with the current status of the developers.
NOTE: checking out the source code and the developer’s status on the coin can help us know how much progress the coin can have.
This webpage also has an option of Whitepaper, which helps us know the information on the motive of that cryptocurrency to be launched. If you feel it is copied or that it is not solving a particular problem then you mustn’t invest in that cryptocurrency.
NOTE: one must read out the Whitepaper before investing in any coin, if you are investing without knowing that coin then you are gambling. Thus, you must give it a read before deciding to invest.
The prospective investor can also get information on the MarketCap of a particular coin which is the Current Price*Circulating Supply, Fully Diluted Market Cap which is the Current Price*Total Supply, 24 hours Volume, etc.
Source: Coinmarketcap
We can also find the Bitcoin chart and the Price Statistics. The Price Statistics give insights into the Trading Volume, All-time high and low, Market dominance, etc.
Such websites also provide you with the list of the exchanges where these coins are available, the historical data of the concerned coin’s pricing, Holders which tells you the unique addresses holding these coins, total addresses, active addresses, percentages of top holders of the total circulating supply.
NOTE: the lesser the top 10 holders have the better it is.
There is data on the Wallets (where we can store our coins, current news on the concerning coin, the socials of the coin, and Analysis which provides us with the on-chain metrics to understand the state of the coins.
So, all such details and statistics on the coins help us make a better decision on investing in a coin by researching.
Conclusion
With this article, you must have inculcated some knowledge on how to DYOR before investing in crypto assets.
We know how to use websites like CoinMarketCap to know our coins, how to use Whitepaper, Source Code, Market Cap, Volume, Circulating Supply, and many other details.
It is crucial for us to know the legitimacy of the projects in crypto.
Research smartly and invest judiciously!
Written By: Devangi Sharma
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