Smart Tips for Analyzing Crypto Tokens

While Bitcoin is perhaps the most significant cryptocurrency, it is not the only one – not by far. In fact, there are currently over 5,000 cryptocurrencies in existence – a number that continues to increase with every passing day.

Naturally, this makes investing decisions immensely challenging – especially considering that many of the cryptocurrencies are not even real. Yes, scammers have identified the immense potential existing in the world of crypto and have come up with fake tokens to rob people off their hard-earned money. Read more here from bitcoin revolution.




In this blog, we will be covering some important ways that will allow you to analyze any token.


Smart Tips for Analyzing Crypto Tokens

1) Assess the whitepaper:
The whitepaper of a token details the project’s aims as well as use cases for the token. Hence, a critical assessment of the whitepaper will allow you to see if the outlined goals are real(istic).

Even if you find the goals realistic enough, you need to ensure that they were not simply copied from a different project’s whitepaper – as it has certainly happened before.

2) Assess the project team:
Once you have learned about what the project has to offer, you need to know more about the people offering the project itself. See if any team members have contributed to any past reputable projects, or if they are known within the blockchain environment. Also, take a close look at the members’ qualifications.

This assessment will allow you to rest assured that you are not making an investment in a project that is driven by people who do not have any knowledge of what they are executing. This is a type of fundamental analysis, intended to prevent you from making investments in companies created with the sole purpose of ripping naïve investors off. Once again, it is important to remember that an image can easily be downloaded online.

3) Visit the project’s social media accounts:
Keeping a keen eye on a project’s social media community is another effective way of performing a token analysis. This way, you will see if the project’s cause is being backed by a community. For starters, you can visit the major social media platforms like Facebook, Reddit, Telegram, and Twitter.

The social media analysis will also help you learn other people’s feedback and comments pertaining to the project, and allow you to come to an informed decision. However, be mindful of the fact that sometimes, people make positive statements about projects, in return for bounties and incentives. So, even positive reviews should be taken with a pinch of salt.

4) Be clear about any legality issues:
You have learned about an excellent ICO and you are ready to invest. However, what you do not know is that your jurisdiction might prevent you from investing – and if you go ahead, you will be violating the law.

To avoid this hypothetical situation from becoming a reality, you need to make sure that your country’s regulators have not placed any restrictions on participation. Nevertheless, many regions have still not regulated ICOs and many of those who have placed regulations are trying to devise more flexible rules.

5) Look for reliable people:
If you are extremely busy, it is understandable to struggle to deeply assess every single project. In such cases, you should scour the cryptocurrency arena for people you can rely upon to perform project assessments. Make sure that you hire people with sound crypto knowledge. Choosing the right people will save you a lot of time that you would have otherwise spent staring at your computer screen.


Final Word

Performing token analyses is no piece of cake. However, with the tips discussed in this blog, we hope that you will be able to pick the right projects and generate healthy, consistent profits.

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