How to Research Cryptocurrency

Making profitable investments in the cryptocurrency world requires knowledge on how to research crypto.

The concept of digital currencies hit full throttle about three years ago, with a significant rise in Bitcoin’s value from $10,000 to $20,000 in late 2016.

During that time, most of the fuss about cryptocurrencies was polarized on Bitcoin and Ethereum. Today, there are over 1,500 cryptocurrencies and the number continues to rise.

How to Research Cryptocurrency with Social Media

Using social media as a cryptocurrency research tool is one of the most effective means of specific information about digital currency. Historical data has shown that when the masses are drawn to one particular coin, it is bound to increase in value.

Therefore, don’t go to social media asking for advice but to check market polarization and check which currencies they are inclined to invest in.

Read and Understand the Whitepaper

A whitepaper is a document provided on the crypto-trading platform to highlight the details about their digital coins.

That information should entail how their tokens are used, the vision of the project, the economic model of the coin, and technical issues, among others.

It is of great importance to find out whether they have a roadmap detailing the timeline of the project.

How to Research Cryptocurrency and Analyze Future Events

Successful cryptocurrency research also requires an in-depth analysis of upcoming events. Take a look at the crypto market on a global scale, understanding the events that will take in the future.

That works effectively, especially when you can’t interpret the outcomes of past events.

You can use the CoinMarketCal feature that lets you research on the future activities of a specific cryptocurrency.

Research Cryptocurrency with Fundamental Analysis

cryptocurrency research

A fundamental analysis data gives the information you need to decide whether it is worth investing in a particular crypto coin or not.

You may either be a bottoms-up or a top-to-bottom investor; either way, you need to find a fundamentally powerful project with strong entry points.

Look at the website, social media following, and community forums on different apps, such as Telegram or BitcoinTalk.

Research the Advisors and Investors

Finding out more about successful advisors and investors within the blockchain industry can provide valuable knowledge about the sector.

Many crypto-trading platforms lack the experience and financial power to attract professional talents.

When it comes to investors, check the profile of the names behind the project. If it is a venture capital firm, ensure that it is a reputable company backing the project.

How Many Cryptocurrencies Are There?

As of April 2020, cryptocurrency capitalization totalled $201 billion. The market has approximately 5,390 cryptocurrencies being traded. Some of the top cryptocurrencies are Bitcoin, Ethereum, Ethereum Classic, Litecoin, and NEO.

Bitcoin was authored by an inventor who goes by the name Satoshi Nakamoto. The crypto was launched on October 31st, 2008, as a peer-to-peer electronic cash system.

Later, Ethereum was launched on July 30th, 2015, with 11.9 million coins.

What about e-wallets like PayPal? Are they considered to be a cryptocurrency? Well, no. PayPal is an online digital transferring of cash platform.

The most used currency on PayPal is the USD, which is a “regular” currency, not a crypto one. Although PayPal was initially reluctant to invest in crypto, the company’s CFO John Rainey has recently shown interest in blockchain technology.

The company may soon invest in Bitcoin.