Many crypto investors look back on 2017 with nostalgia: at that time Bitcoin rate skyrocketed almost by 20 times! Those who have already purchased the asset are waiting for it to reach “to the moon” level again, but novice traders have the jeebies, because not everyone can buy even 1 BTC right away.
Today there are many examples of successful investments in low-cost altcoins. But buying up everything awaiting growth is the wrong strategy. Which cryptocurrency is really worth your time and money, as well as when is the most favorable moment for investment?
What to focus on when investing in cryptocurrencies?
For sure, it’s up to everyone to decide what currency to invest in and how much. But beginners should remember a simple rule, which has no exceptions: you need to invest the money you’re not afraid to lose. Even while investing a small amount, you need to evaluate the asset and its position in the market by analyzing several criteria.
1. Product
Today, the main trend is the exit of altcoins that are not backed up by a real product from the market. Choosing out of the remaining coins, you need to answer a few questions:
- What real problem does the coin solve? The growth of many cryptocurrencies happens only due to the speculation of traders for quick profits, but there may not be a real product behind the asset. Such coins have a right to exist, but the increase in the rate in this case is very unstable.
- How actively is the coin used? You can find out it by visiting exchanges where the cryptocurrency is traded. The high liquidity of the coin shows that investors are really interested in it, and the high level of buying and selling will push the rate up.
- Is blockchain really being used? In order to attract customers, developers often add the “blockchain” prefix to their product, just to do slap dash. Check if the distributed blockchain is really used in business processes, or is it just a hype.
2. Success in ecosystem expansion
It is worth paying attention to whether the coin scales its functional capability. Support of an asset by an increasing number of platforms will lead to a stable price surge. Moreover, additional options for using cryptocurrency will definitely attract new users and, accordingly, investors.
It turns out that high community involvement, along with the popularization of cryptocurrency, creates a full-fledged ecosystem that allows to bring the product to a higher level.
3. References in the media
Don’t forget that any publication, even from well-established editions, can be purchased. Therefore, pay attention to what exactly is written in the articles about the project. If there are no publications at all – it is a bad sign. Journalists of specialized media resources will definitely write about a serious project.
4. Increase in value
It is necessary to understand how the rate of the cryptocurrency will grow. For example, if it is used only for making internal payments on the platform, then its growth can occur only with an increase in the number of transactions. Simply put, the more demand, the higher the price.
In addition to internal basic factors, you also need to draw attention to external ones. Assess the general state of the cryptocurrency market. If it recedes, and negative news prevails in the world, as for example was with the outbreak of coronavirus, then it is probably inopportune time to buy assets.
Study the news of the cryptocurrency itself: if positive messages about the conclusion of partnerships, rebranding, the launch of new tools prevail, the rate is likely to creep upward. In this case, put the coin to your portfolio and expect growth – it will not keep you waiting long.
But if you see that the development of the project is at a standstill, and the team is hiding reports on the work done, then investing in such a currency is definitely not worth it.
Example
Let's consider the above mentioned points using the example of one of the promising gaming altcoins – IQN.
Product. IQN token was created to give players an additional opportunity to monetize their achievements by competing in games of all genres.
Why is the product promising? Firstly, it is involved in a multi-billion dollar gaming industry, the profit of which is growing every year. Secondly, it solves the issue of monetization, which today bothers a lot of gamers. For the effort and time spent, they, one way or another, want to get income. IQN gives them this opportunity by prioritizing the player's skills.
Today, the token is traded on HitBTC, EXMO, BitForex, Exrates и Yobit.net, which proves that players receive assets for their in-game achievements, and crypto traders willingly purchase assets.
Ecosystem expansion. The token is actively integrated by gaming platforms in order to motivate their users and give gamers a chance to turn their efforts into an asset.
For example, PvP gaming platform IQeon.com became the first ecosystem which integrated IQN. This made it possible for players to monetize their progress in games and receive winnings without intermediaries. Players already receive IQN by competing with each other, for participating in various contests and activities held by the platform's team and for winning weekly challenges.
The expansion of the list of platforms which will integrate the token is an outspoken indicator that the gaming community is interested in a real opportunity to turn their time and energy into real assets. And with an increase in the number of motivated players, the value of the token will inevitably creep up, strengthening its position and opening up new prospects for the gaming industry.
Recently, IQN was added to the listing of some of the world's leading platforms for secure digital asset trading – the oldest crypto exchange HitBTC, the Singapore BitForex and the British EXMO exchanges.
Such an event created additional prospects for users of IQeon.com PvP gaming platform, and also positively affected the popularization of the asset and the growth of its price rate.
Mentioning in meda. The mention of IQN can often be seen in publications of crypto gaming portals. This shows the high interest of crypto enthusiasts and the real demand for the coin.
Increase in value. The token has set a course for growth: in just six months, the price of IQN has skyrocketed by 82%.
Such a confident upward movement means that the token has not yet formed an unambiguous bar of maximum value. Along with the growth, there are local price adjustments, however, it is difficult to find sharp and at the same time protracted falls on the chart, as it is often observed among TOP cryptocurrencies.
It should be understood that if the project continues to expand the list of games, applications and services that support IQN, then investors will really benefit.
Conclusion
First of all, there is always a need for thorough analysis, so as not to face weak or depreciating altcoins. Depreciating tokens not always mean “unpromising”, but it should be understood that the cryptocurrency market is very volatile. Prices can change at any time and sometimes for no reason. Therefore, unstable coins bear a real danger to investors. Since 2017, this category of coins has grown significantly, which makes them much more difficult to recognize in the market.
Weak cryptocurrencies are showing speculative growth, attracting newbies who want to get rich in short terms. But such assets are not supported by anything: they have no idea behind, they are rarely mentioned, the team provides a minimum of information about the project and is reluctant to communicate with the community. Therefore, you can minimize the "surprise factor" by doing a deeper investigation.
Purchase digital assets with a long-term perspective only. Due to the high volatility, no one can guarantee profitability in the short term.