Before you buy any crypto coin, there are major things to consider, this is to prevent you from walking into the bear period, walking into the bear period, especially for a beginner can discourage you from the benefit that is in the cryptocurrency world. If a person wants to venture into Crypto, he should make sure he researches very well beforehand, the research helps the person to make the right choice on which cryptocurrency to buy. Some of the major things to consider before buying any cryptocurrency are listed below.
Read Also: Custodial and non-custodial Wallets: Definition and Differences
Past Record of Price
The record or history of a coin’s price is one thing to look out for when you are buying a coin, this is because factors like the demand of the coin and the supply can affect the efficiency of the coin.
Even in the physical world demand and supply can be determinant factors in the market boost of any product, to explain this; a newbie that is trying to buy a cryptocurrency should find out how many people are trying to buy the same coin at that time if people that are buying are more than people that are selling at a particular time, it means the coin will likely experience Bull (the price will go up) soon, which means you will gain, but if the people that are selling are more than people that are buying, it means the coin will likely experience bear soon (the price will go down), which mean you will lose.
Any newbie that takes this into consideration will likely experience a good chance of success in the market.
Read Also: How Is Crypto Different From Coin And Token?
Total supply and circulating supply of the coin
This is the total number of coins that can be in circulation after the launch of any project, However, the total supply can fluctuate depending on the number of coins that are mined and sold, while circulating supply is a term used to refer to all the coins currently in circulation.
To explain the above; let’s say there is 8 million Near token, but the number that is sold is just 2 million, that means only two million is active (moving from hands to hand), and the remaining 6 million still exist in the blockchain but it is not active.
Understanding Circulation and Total supply can help a beginner consider which coin to invest in.
The Profile of the team behind the coin
The team behind any crypto should be known for their quality, and a good reputation with the ability to give an ample explanation of their product effectively, and also be able to answer any question that comes. To know about the team, you should follow them on social media and watch their videos, read their article, and post.
Read Also: Some Trading Strategies To Use In Crypto
User belief and community support
This is the process of checking if there is any community around the coin, this can quickly be done in CoinMarketCap or Telegram.
By doing this you will get to know how many communities are actively working to see the growth of the coin/token, this will help you to know and make a decision if the coin is worth investing in, because they will be regular information about the coin in the community which will make using the coin comfortable and trusting.
The last thing to note is that, when the price of the coin is not stable, (it goes up and down every day or minute), this means that there is some level of dishonesty behind the coin, what this means is that, the more people buy the coin the more it increases, as they sell it off, the coin decreases, the reasons for selling the coin are the factors that contribute to the unstable condition of the coin.
Final Note
Putting all this into consideration, you are expected to research carefully and recursively before buying a coin, the research will help you to select a coin that you will benefit from.