Top Ways to Evaluate a Cryptocurrency According to Waqar Hassan

Most of them see that cryptocurrencies are some kind of complex digital money and think that it’s not difficult to get into crypto or that it’s an easy way to make money. But the vast majority think this opinion is based on false information, because at some point everyone will find out that trading crypto is approximately the same as trading with any other asset. And one of the most difficult things for a newcomer will be experiencing the difficulty of assessing a crypto asset.

Find out in this guide, how you can analyze a cryptocurrency before putting money on it, according to Waqar Hassan. Known for his experience as a cryptocurrency analyst for over a decade now, he apparently knows the struggle of dividing his attention between a vast amount of data sources to decipher if the crypto asset that he plans to invest his money in, should make a lucrative investment. But, with the cryptocurrency mortgage investments tips he mentions in this guide, you would greatly improve your ability to tell the two apart.

How to Evaluate a Cryptocurrency

An interesting feature of cryptocurrency critique is that you can still use these steps to judge many other categories of trading assets – so you can medicalise your crypto portfolio, and improve your overall trading portfolio by taking the following steps:

Go through the White Paper

Perhaps the first thing you need to do when you are looking at any crypto you are considering investing in is check if there is a white paper. All good crypto ought to have a white paper. If the asset you like does not have a white paper, then that’s an immediate red flag for you. They could be used as part of a company’s proposal. They should outline what goals the asset is trying to meet and the methods or means it intends to follow.

A solid white paper can explain clearly what the crypto token offers and how it differs from competitors in the market en masse Along with the basic, high-level project pitch, good white papers will spell out token distribution and supply caps, explain how and when you can burn or mint tokens, since that’s often centrepieces of tokens’ ecosystems.

Now, you don’t have to understand the ins and outs of a white paper, because some are so dense that only crypto analysts can make heads or tails of them. You just want to get an idea of what strategy a token is implementing, how successful that strategy has been, and whether there are any provisions that look a bit sketchy.

Check the Website

The next step is to check their website. Any crypto asset you would get involved in at least for a couple of weeks is very likely to have a quality website – this is another low-hanging fruit. Aside from the fact that it is extremely easy to build a website, assume a company with any real aspirations of sticking around for the long run would update it continuously and make it more interesting. You might think that this is an absolutely irrelevant consideration, because you only care about the chances that the asset will be successful. Not so. Any good crypto company spends a lot of time with its public image, as well as with all the items that are branded around it, including the website.

You want to see if they talk about any possible misspellings that the site might have been caught up in, or might have because they are constantly being corrected. You want to see if the site is updated regularly. You want to see if it was built using one of the generic website templates that give the impression that the authors themselves spent countless hours finetuning the site. And you want to see if it has a white paper, and lists the functions of the token.

Check their Social Media

Go through socials if you want to know more about a crypto community. In all probability, says Waqar Hassan, almost every crypto project will at the very least have a Twitter and Redd, and maybe even an Instagram. If that’s the person’s primary audience, chances are ‘they will also have a Discord where you can freely ask questions’.

Look at their followers and see if their engagement is in line with this. For example, an account with more than 100,000 followers, but only 20 or 30 likes or retweets on their posts, is not likely to be active, nor do they have genuine reach.

If there’s a Reddit or Discord server, look for how often the mods are talking to others (and to whom). It can also be nice to get a feel for the general culture that’s being encouraged – if the community (including the mods) responds to queries or criticisms with you just don’t get it, they’re not promoting much of an open community.

You can also evaluate whether the project is worth your time by checking online on social media. Check if there are posts or tweets about crypto. Check if people talk about cryptocurrency or not. Check if they do it naturally or if it is being artificially created via bots. It becomes apparent that the project is not worth it if there is not enough attention to it or if a lot of attention to it is artificially created.

Go through their Market Metrics

You will, however, need the services of a data aggregator to store the information on the crypto asset in question, such as its market capitalisation and the general trajectory the product has followed over a representative period of time. If the trajectory is generally downward and unprofitably so, you should ditch it.

You also want to look at the trading volume of the asset, so you know how many people are trading that asset, how often and how fast. This will tell you if people are cashing out of the asset or hoarding it, or if there’s a big increase in demand and people use it as a unit of account. It’s better if people are not hoarding the asset. If the trading volume is low, usually it means there’s low trust in the asset. Limit or no limit of the supply of the asset, which also gives you some information. Unlimited supply would be even better.

Be Careful when Trading

Hopefully, these set of evaluations will have somewhat civilised the ease impression that you may have regarding the trading of crypto. By all means trading crypto is a bit complicated but just give it a few weeks, you’ll be used to it. There are individuals who consider themselves professionals or veterans in the crypto market, owner is one of them. I am Waqar Hassan and I struggled with the concept of trading for quite a while. I didn’t know what to do initially. But I learnt along the line of the confidence or港 disorders’ I, just like you, can learn.

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