Cryptocurrencies are becoming an increasingly popular investment tool, including for investors from the traditional financial market. However, today there are tens of thousands of crypto projects, with new ones appearing every day. Such a volume of offer can be confusing, especially for beginners. We tell you how to decide which cryptocurrency to buy and how to get around the “pitfalls” when choosing a crypto project.
The main rule of choice is to invest in cryptocurrencies with a solid foundation that have a certain value. It is also worth paying attention to how long the coin of interest exists, as well as how it behaved during periods of active growth and market decline.
We have compiled a list of the most popular cryptocurrencies with a strong community that development teams are still working on. All of them have already proven their viability, having gone through several cycles of growth and fall of the digital asset market. Its launch took place in 2009. Blockchain technology owes its popularity to bitcoin. Gold reserves are also limited. Therefore, investors often compare cryptocurrencies with precious metals.
As conceived by the creator – Satoshi Nakamoto, bitcoin can act as a means of payment. The limited issuance became the basis of the deflationary nature of the coin, making it also a convenient tool for long-term investment.
Without a doubt, bitcoin is an excellent choice for investment and the first possible answer to the question of which cryptocurrency to buy. The coin has proven its viability and effectiveness as a savings tool.
The project popularized smart contract technology and decentralized applications (DApps). The project’s native token, ETH, is used for payments and also as a tool for paying fees for network operations.
The project was launched back in 2014, by the standards of the crypto industry. It, like bitcoin, has survived several ups and downs of the crypto market, proving its viability and investment attractiveness.
For example, it can be used to invest in new projects on the Binance Launchpad platform and receive discounts on commissions for operations within the walls of the project platforms. BNB is also used to pay fees on the BNB Chain blockchain.
It is worth investing in a coin, if only because the project has a close-knit team that is constantly working on its development.
Ripple (XRP) is a California-based payment platform with its own cryptocurrency. The project offered tools for instant money transfers around the world, which, among other things, are used by many classical credit organizations.
In December 2020, Ripple faced accusations from the US Securities and Exchange Commission (SEC) about the illegal issuance and sale of securities under the guise of XRP tokens. In July 2023, the California project partially defeated the regulator. The court recognized the private sale of XRP legal. At the same time, the judge saw a violation of the law on securities in the institutional sale of cryptocurrency. Despite the protracted showdown with the Commission, Ripple continues to live and develop.
The proven viability of XRP, as well as the potential for a complete victory over the SEC, which can cause the active growth of the coin, is a reason to buy Ripple cryptocurrency in your portfolio.
The coin is often referred to as “digital silver,” a reference to the “digital gold” that many consider bitcoin to be.
The project has its own cryptocurrency – DOT. Many believe that it is thanks to the technical developments of Polkadot that the blockchain will receive an impetus for further development and distribution. The loudness of the developer’s name and good development potential make the DOT cryptocurrency promising for investment.
Chainlink (LINK) is a platform that allows blockchains to exchange data in real time. LINK is the project’s native token, which is used to pay for services on the Chainlink network, such as accessing data from external APIs. Project tools are popular. Therefore, LINK cryptocurrency is worth considering for investment.
Technology and application. Answer the questions: does the coin you are interested in solve real problems and does the project offer any innovative solutions. Two “yes” is a reason to think about buying cryptocurrency.
Team and collaboration. It is also worth checking if the crypto project has valuable partnership arrangements.
Community. The development and scale of the community formed around the project speaks volumes. Rate the activity of the community. The larger the community and the more active its members, the higher the project’s chances of success and the more attractive, in terms of investment, its cryptocurrency looks.
Opinions. Find out what the crypto community is saying about the project. To do this, it is worth diving into crypto forums, such as Bitcointalk, as well as social networks such as Reddit or Twitter. Also, on the platforms, you can start your own discussion of projects and ask the opinion of users about which cryptocurrency to buy.
Audits. Audit checks are extremely important for projects that work on smart contracts. One small vulnerability can cause an attack that will deprive investors of their money. Therefore, it is worth examining the results of project audits, if available.
Technical and fundamental analysis. Fundamental analysis includes an assessment of project fundamentals such as business model, market prospects and competition.
Whitepaper and roadmap. Carefully read all the technical documentation of the project. In the whitepaper you will find all the necessary information that will allow you to evaluate its prospects. It is also worth paying attention to the roadmap and checking whether the developments meet the specified deadlines.