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Crypto-curious investors have changed the face of the cryptocurrency market over the past year.

For many such investors, bitcoin and ethereum have been the starting point. They are the most valuable and they have the longest track records to consider in terms of future potential. But what about investors who want to go further?

The deeper you get into cryptocurrency and less popular altcoins, the riskier you can expect your investments to get. With any cryptocurrency, experts say price and a handful of other key metrics can help investors make smarter decisions about what has high investing potential, and what’s more likely to flop. And along with quantitative factors like price, market cap, and trading volume, investors should also consider more qualitative factors like who created a given cryptocurrency, use cases, what’s in its white paper (if it has one), and more. 

“Before you look into the price action, you actually have to look at what we call the fundamental analysis, which is picking the right asset for the right goal,” says Kiana Danial, author of “Cryptocurrency Investing for Dummies” and founder of Invest Diva.

We’ve talked to dozens of experts about how to invest in crypto as smartly and safely as possible, and a few ground rules have emerged, whether you’re investing in bitcoin or a new token that was created yesterday. They are true of all cryptocurrency investments, and especially so for riskier and newer altcoins: 

  • Keep crypto investments to 5% or less of your portfolio
  • Only invest in crypto what you’d be OK losing
  • Make sure you have an emergency fund, have paid off high-interest debt, and secured a traditional retirement plan before investing in crypto
  • Start with bitcoin and ethereum, the most popular and mainstream cryptos

Whether you’re just getting started, or interested in going beyond bitcoin and ethereum, here’s a rundown of how you can evaluate any cryptocurrency’s long-term potential:

Understanding Crypto Fundamentals 

If you’re investing in crypto for the long haul, you should have a fundamental understanding of what you’re getting into before deeply looking at the technical factors that affect a cryptocurrency’s market value. 

“Focus more on the project itself, on the problem it’s solving, and on where it is actually deriving its value,” says Danial.

When analyzing potential crypto investments, there are several qualitative factors experts recommend looking at when you’re doing your own research and deciding whether to invest in a potential coin:

Project Website and Social Media

Experts say it’s important to consider an initial high-level overview of the project. Check the crypto project’s website and social media channels to also get a sense of how socially active the project is and gain greater insight into the project, the team, and its community. The project website should be easy-to-navigate, functional, and openly share details about the project, the team behind it, and its white paper and roadmap. 

The Team

The credibility and experience of the team behind a project can play a significant role in the success …….

Source: https://time.com/nextadvisor/investing/cryptocurrency/how-to-evaluate-any-crypto-coins-potential/

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