It’s time to diversify your portfolio! It might have been fun to trade a cryptocurrency that eventually brought you success, but with so many digital currencies that have flooded the market lately, it would be a pity to hold only onto that one.
Identifying the next prominent cryptocurrency is by no means an easy job, as it implies thorough research and patience, but if you’re serious about that, you’ll most probably find a gold mine. Indeed, since its launch, Bitcoin has been the world’s largest cryptocurrency. But apart from Bitcoin, there are some other kings and queens that are just waiting to be discovered. Some of the most popular cryptocurrencies at the moment are Ethereum (ETH), Ripple (XRP), and Litecoin (LTC). Nonetheless, you’ll see that the world of crypto is vast, with more than 5,000 digital currencies and even more to be launched. Some have great liquidity, high volatility, and the potential to be adopted, whereas some are more likely to be forgotten.
Besides, there are all those market players that promote their coins as the next Bitcoin, so it’s inevitable not to be confused about your next crypto investment.
We’ve got your back! Below are valuable recommendations for choosing a promising cryptocurrency:
Educate yourself – it’s worth the time!
Before investing in any cryptocurrency, it’s essential to carry out a deep study. What is that asset all about? What are its prospects? And most importantly, why did it grab your attention? Take your time to analyze all these aspects and understand the crypto fundamentals – the project’s website, team, major investors, trading history and volume, market capitalization, liquidity, supply, etc. It might sound a lot, but all the information is at your fingertips if you know where to search for it.
Consider conducting independent research, particularly if you’re planning to invest for the long haul. Start by looking at the cryptocurrency’s historical charts. You should pay special attention to factors such as market cap and circulation. What about the price? It’s essential, but it shouldn’t make or break your decision. When finding a cryptocurrency’s entire history, ensure you look for stability. Avoid those currencies that have undergone significant drops in their market cap and even those that fluctuate too much. More than that, inform yourself about the company providing the cryptocurrency and its leadership; this might tell you a lot about its stability.
Don’t focus on the hype
While cryptocurrencies that manage to generate a buzz might be promising, this shouldn’t be a guide to your choice. If this popularity is only temporary, you’re likely to be at high risk. Since the crypto industry is in the early stages, a digital currency might suddenly crash, so relying on only what other people say about the crypto you’re interested in is not the best decision. Instead, do thorough research about the crypto’s price, utility, supply, and many more other factors determining the condition of a cryptocurrency in the marketplace. Moreover, educate yourself from trustworthy and reputable sources such as Binance, where you can find live information about any coin that might have caught your attention. You can also have a look at how to buy cryptocurrency if you’ve just entered this game. Constantly informing yourself is always recommended, whether you’re a newbie investor or a true veteran.
Understand the risk
Taking financial risks is inevitable when it comes to cryptocurrencies, as they are volatile in nature. Understanding this risk and knowing where and when to stop matters here. While some individuals might seize the moment and enter the door of opportunity, some might be nervous about that. Which side are you on? Generally, if you’re anxious about taking risks, you’re not recommended to invest in crypto. Or, preferably, invest just as much as you afford to lose.
If you’re a risk taker, you may want to diversify your investment, which can help spread the risk. No matter how much you love to venture, be always cautious with the coins you are about to store in your e-wallet and try to invest in stable cryptocurrencies such as BTC, ETH, and LTH.
Look for prospects for adoption
The more a cryptocurrency is to be widely adopted, the more profitable it is. Bitcoin has, without a doubt, an edge over other digital currencies, but this does not mean others are not going to be adopted in the future. Remember when Elon Musk announced on Twitter that he would accept Bitcoin as a payment method for his Tesla vehicles? Meanwhile, he changed his mind and is not accepting Dogecoin as a crypto payment. The same is true with ETH – increasingly more companies, including Shopify, Gipsybee, and Overstock, have embraced ETH payments.
Assess the crypto’s white paper
As an investor, you should direct your attention to a well-defined white paper when assessing a cryptocurrency’s long-term value. This document is provided by the crypto project and reveals crucial information about that coin or token. Among the details you’re going to find here are data about the technology behind the project, its purpose, and major investors. You should also be able to find the team that has worked on the project and how it is forecast to evolve in the following months or years. Once you’re able to access this white paper, you’ll have a clearer idea of the crypto’s future success and adoption, so make this a priority.
Best cryptocurrencies to invest in 2022, according to Forbes
From the multitude of cryptocurrencies that exist on the market, Forbes has selected ten of the most gainful based on their market capitalization.
Binance Coin (BNB)
Some other worth-noticing cryptos in 2022 are Tamadoge (TAMA), Battle Infinity (IBAT), Lucky Block (LBLOCK), Dogecoin (DOGE), DeFi Coin (DEFC), and Hedera Hashgraph (HBAR). These have just been launched but are already promising targets.
Fearful of new? Bitcoin was once new, too, and look where it is now!