What cryptocurrency should I buy?

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Cryptocurrencies grow like mushrooms, and there are already more than 1,000 these days, and their number won’t decrease in the years to come, quite the contrary! For example, you must be aware that cryptocurrencies (like "Simple Token" (OST)) were launched with the objective of simplifying fundraising for small operations, consequently generating the creation of new cryptocurrencies. You can, therefore, easily imagine seeing more than 10,000 cryptocurrencies in circulation before the end of 2020.

But then which cryptocurrencies should you invest in? What are the criteria to take into account to motivate your purchase of a cryptocurrency? In this post, I will try to establish the elements that can be taken into account before investing in a cryptocurrency, but do not hesitate to add to this article by posting your comments.

What cryptocurrency to buy

1/ What is this cryptocurrency’s project? What is its purpose?



Behind every cryptocurrency there is a "project". It is important for the investor to find out about this project before investing. On each cryptocurrency’s official website, you will usually find a "white paper". This document (often in English) presents the project details and its usefulness. Is it about the creation of a trading platform, a means of payment, digitalization of objects, connected objects, etc.? The projects are diverse and varied. Take the time to find out!

The cryptocurrency buzz has made investors forget this element (which is the most important). Cryptocurrencies all tend to drift away from their first rating, investors then begin to buy everything and anything. Which gives birth to SCAMs.

Reminder: what is a SCAM? It's a pile of baloney that should be avoided at all costs. A fundraiser without a project behind it, a cryptocurrency that will inevitably end up at zero sooner or later.

2/ Capitalization of this cryptocurrency



Whether it is 0.0001 or 1,000 Bitcoins, whether it is 0.0001 or 1,000 Ethereum, you should not look at a cryptocurrency’s price. Only the cryptocurrency’s capitalization let’s an investor judge if it is currently under or overvalued.

The investor generally compares a cryptocurrency’s capitalisation with the capitalisation of cryptocurrencies that have an approximately identical project.

It is important (and often forgotten by investors) to not only consider the number of 'tokens' / securities outstanding. Each cryptocurrency issues a certain number of securities onto the market for trading, but reserves a number of securities for developing the company, projects, etc. Too much held in reserve will make the project look like a SCAM. Not enough held in reserve would lead investors to wonder what use raising funds is.

3/ The liquidity of this cryptocurrency



As soon as a new cryptocurrency is listed at a broker like Binance or Bittrex, it generally registers an increase of more than 50% simply because it becomes more easily tradeable.

It is important to take into account your cryptocurrency’s liquidity. If it is not very liquid with the establishment that you use to trade the cryptocurrency, do not hesitate to consult another establishment. Remember; opening a cryptocurrency account takes no more than 5 minutes!
The risk of buying or trading an illiquid cryptocurrency is paying highly for the spread.

Note: you may want to choose sufficiently liquid cryptocurrencies. "bottom of the table" cryptocurrencies will be difficult to trade without paying a high price.

4/ Your cryptocurrency’s team and community



A solid project can only be led by good teams, and a large community of developers. Small cryptocurrencies supported by two/three people are very risky. Forget about them.

A final tip:

Many new cryptocurrency traders first choose cryptocurrency simplicity, and buy Bitcoin. Don't look for too much complexity when making your debut. The TOP 200 cryptocurrencies, sorted according to their capitalisation rating should normally satisfy your appetite for risk. And if that's not enough, turn to ICOs from major cryptocurrencies (e.g.: NEX or APEX on the NEO blockchain) Read also: TOP cryptocurrencies 2018: NEO

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