The fundamentals: How you can analyze cryptocurrency

Despite being around for a while, cryptocurrency is still considered to be in a gold rush phase. As some experienced investors continue to make big money, others don’t have the right knowledge about crypto trading. Some studies have indicated that most of the investors have no or little understanding of this sector once they first get involved. 

And, with many people now trading in cryptocurrency, there is a good chance that most of them don’t have crypto knowledge. Before you decide to trade in cryptocurrency, you need to find a reputable exchange like Swyftx so that you can buy and sell your cryptocurrencies. That said, it can be hard to figure out the cryptocurrency prices that is suitable for you. This article discusses how you can analyze cryptocurrency. 

Review the white paper

Many crypto projects offer a white paper that outlines the technical details and objectives of the cryptocurrency. Some while papers can have technical jargon that a casual investor may find it hard to understand, but you should still read it to learn about its vision.  

A good white paper needs to define the project’s goal. It should also explain how their technology can achieve these goals and how the crypto may work. Many white papers usually define a problem that they intend to solve using the currency itself. And, these problems and solutions can be clear to investors. But you should watch out for any crypto project that has a white paper with a lot of generic promises without details. 

Research the team

A cryptocurrency is usually made by a founding team and software developers that assist to create the solution to a specific problem. You need to research the experience of the team members who intend to run the project so that you can understand how a project can run 

In some cases, this can include checking the LinkedIn profile to know about the background of the leadership or technical staff. You can also learn about the projects that the technical staff members have previously launched. Besides, the About Page on the cryptocurrency’s site needs to articulate who is building the project as well as state their expertise. 

A team of anonymous developers and founders can indicate that there is something wrong with the project. You should also be concerned about an inexperienced team without any experience building or scaling any project in the past.

It’s worth mentioning that most crypto projects tend to have a defined executive team responsible for the vision, financials, execution, and marketing of the company. Therefore, you need to learn about the leadership team so that you can know the chances of success for the potential project. 

Ideally, the team should have a good history of running successful projects. Also, they need to be reputable, have a history in the cryptocurrency industry, and they should be public-facing. You should note that you can find some companies that have anonymous founders and have success in crypto projects. On the other hand, others have run crypto projects and committed fraud, so you need to choose carefully. 

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