Cryptocurrency investment seems to be the new deal for some time now. Considering the quick profit the crypto market provides, new investors are looking to just hop on without any tips and knowledge on the coins they are buying.
However, there have been many articles and reports which cautions crypto investment and have installed some kind of fear and doubt in new investors.
A lot of things come to play when looking to invest in the crypto market, but when it comes to buying specific digital coins, there are three key things that shouldn’t be overlooked. We throw more light on those things in this piece.
1. Team Behind digital coin
To begin with, the group behind a digital coin is a very vital point one should consider when buying crypto. Some coins just popped out of nowhere, without any form of management or effort to drive it forward by anybody.
Their prices are then left to rise on speculations, and even though that may be true at times, it isn’t the major driving force to push up the price of a coin. Other coins have in place a well experienced, equipped and dedicated team that works day in day out to make sure the coin is thriving. Their only target here is to see the coin be successful and wouldn’t stop for anything until that is achieved.
2. Available Supply
The available supply of a cryptocurrency is also a point to consider when trying to invest in a coin. Cryptocurrencies with higher prices normally have a small available supply, thus considering the trend of the market. You can learn the current price of a cryptocurrency by dividing its market capitalization by its available supply and in respect to this, future prices can be also predicted by dividing the available supply of a coin, by a projected market cap.
3. Market capitalization
Market Capitalization, as mentioned above in literal terms means the number of investors holding the coin. The market cap also is an integral factor in determining the price of a digital coin. At a point where a market cap lies beneath its available supply, the cryptocurrency trades at less than a dollar, and when it rises more than the available supply, its trade’s above a dollar.
When the market cap of a cryptocurrency rises, it means more investors are getting hold of it, and so as when it falls, it denotes that, many holders of the coin are converting it into fiat money.
