Let me guess, you want to trade in cryptocurrencies, and can’t seem to figure out, which asset to choose. I’ll try to help you with that because I can tell that you are among the very few, who have decided to make the right choice. The best thing about crypto trades is that they are available even to the common people, which is also a negative attribute.
The industry allows novice traders to enter the market as well but make blind picks, only to regret their choice. If you are here, it means you don’t want to become part of such a group. Therefore, I consider it my responsibility to guide you properly so you choose the right asset.
Never Make This Mistake
If you take the word of the traders who are not experienced or are trading just for fun, then there’s a high chance of you making the wrong choices. You should not listen to such traders because they would want you to invest in assets that will lose their charm after a short period.
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This means that you may be enjoying the profits now, but you may see all those profits go away in a matter of minutes or hours. It is part of human nature to go all out investing in something that shines. Similar to the general observations, inexperienced traders tend to do the same when it comes to cryptocurrency trading.
Most of the time, it is the newly launched cryptocurrencies that do rise to fame but it is for a short period. Once the hype and the charm are gone, such cryptocurrencies end up losing their trading values and valuations.
After that, the only things that remain are losses and regrets for the investors. If you follow the same trend, then I’m afraid you are destined to face the same fate in near future.
Therefore, it is highly recommended that you do not pay attention to such traders and do research before you choose the right crypto asset.
Do a Proper Research on the Crypto You Wish to Trade With
As mentioned earlier, people tend to choose a cryptocurrency that is shining for a short while. They do not realize that the asset is supported by the hype created by the developers and the community of the particular token.
It has been noticed that most of the time, the tokens with the highest level of hype that come out of nowhere, are nothing more than scams and rug pulls. The developers of such cryptocurrencies create a lot of hype, stories, and ad claims around their creation.
Such claims tend to increase the anticipation among crypto investors so when the crypto launches, it is sold like hotcakes. In such cases, most of the assets are owned by the developers themselves. As the asset reaches a certain threshold, the developers pull the rug and run away with the funds.
If you are among the group of traders who invested in such assets, you’ll be left with nothing but a few pennies in your possession and the best trading experience in cryptocurrencies.
If you do not want that to happen, then you must pay very close attention to the crypto market. Try and go for the crypto asset that is the most liked and adopted in the industry but has been around for a long time. If a token is mature (has been around for years), and is clearly showing a bullish performance for some time, you might want to go for that one.
Choose the Crypto with High Percentage
In trading, it is not important to look at the value but at the growth or decline rate of the asset. Just like the general trading concept, you have to keep an eye on the growth rate of crypto when trading in cryptocurrencies.
Imagine that an asset’s value is $100 and the other asset’s value is $10. The first asset’s year-to-date growth is 10% while the second one’s growth rate is 50%, it is the second one you have to go with despite the value of the first one is high.
The 10% growth for the first asset suggests that its value surged to $110 bringing you $10 worth of profit. However, if you invested $100 in the $10 asset, you would make a $50 profit. This is how things work in the trading industry and you have to be very careful with that.
You can apply the same rule to Bitcoin and Ethereum, where Bitcoin’s trading price is close to $28,500 while Ethereum’s price is close to $1,800. Despite having a great gap in value, it is the growth rate that would define the profits you generate from both assets.
Look at the History of the Crypto
Another important check is to see how crypto has performed in the past. Bitcoin has been pronounced a dead asset more than 300 times but it is still around. This goes to show that the token is resilient to market pressure and has the tendency to recover no matter the longevity of the downtrend.
You can take the entire year 2022 as an example, which shows that the price of Bitcoin saw nothing but declines. Still, the asset has performed well in the year 2023 and its price is still moving in the bullish zone.
Look for cryptocurrencies that always tend to rise even from the ashes. Even if such assets plummet to the lowest levels, their communities will keep supporting them and bring them back to life.
What does the Future Hold?
Apart from looking at the past of crypto, you should also look at the future of an asset. You should monitor how an asset is performing and how it may perform in the future.
You can assess that with the number of projects, services, upgrades, utilities, and adoptions being put in place in favor of the asset.
Let’s take Shiba Inu for example, which is constantly getting adopted in the mainstream sector such as Amazon, which is accepting it as a mode of payment.
If you are able to track these aspects, you will definitely be heading in the right direction. The crypto industry is full of opportunities for those who are ready to take the pressure and act upon their instincts after gathering enough knowledge and understanding of the crypto markets. If you are able to do it, then you’ll be among those who find success in crypto trading.