Crypto newbie? Interested in investing while the bear market brings some bargains? Then here are some good starting points.
Despite the crypto winter, interest in crypto investments is still on the rise. The market cap of the crypto market grew rapidly from 2020 to 2022.
In this image table we can see the different market cap values that were in the crypto market from 2020 to 2022. Source
Crypto Newbies: All You Need To Know
What are the basic points every investor should make before and during investing in the crypto market?
Max Kripyshev is the CEO of CoinsPaid. “It is first and foremost to understand that there are many types of crypto investors. To decide what kind of approach you want to take to cryptocurrency investing, you should start by gaining an exposure to the industry. Whether you are Eliminate choosing monthly dollar-cost-averaging or high-frequency day trades, most importantly, figuring out your preferred strategy as time passes.
Nicholas Tang is the Director of Internal Communications at Phemex. “Investing takes a lot of work and research. It has never been as easy as identifying a project whose value is steadily increasing and buying its tokens or stocks. With projects that seem to be stalling, There are countless examples that have collapsed over the course of days. Many of these relied on momentary hype and trends to create a mask of success. Fundamental analysis can help determine what really happened in the people and ideas behind a company. Whether I have sufficient aptitude or ability to be successful.”
In order to make the investment successful, the investor needs to take the following steps.
Analyze Cryptocurrency Types
The consumer must carefully analyze the type of cryptocurrency they are going to acquire. Stablecoins like Tether or value currencies like bitcoin will not be the same.
Make sure you understand whether a cryptocurrency is backed in a real asset, if its value is determined by market supply and demand, and that you are able to analyze the volatility level of the cryptocurrency.
Crypto novice: always study the project’s whitepaper
After the user is able to determine the type of cryptocurrency he is interested in, he should study the project’s whitepaper in detail.
Users can find various key points of the project in the whitepaper such as:
1. Description of the Project Behind the Cryptocurrency
2. The Technology Behind Cryptocurrencies
3. Salient Features of the Project
4. Cryptocurrency Market Risk
In this example, we will be able to look at some of the main features and details of Tether through a study of its whitepaper.
Crypto newbies should always check who is behind the project
There are thousands of cryptocurrencies within the crypto market. To avoid being part of a scam or pyramid scheme, the investor should investigate the project behind the cryptocurrency, and who the founders are.
Rodrigo Torres is the director of Valora Analytic. “Literature and experience indicate that in the investment world, the best way to get started is to know the market in which you want to accumulate surplus liquidity. Another recommendation is that for issues such as food, housing or basic expenses. You should not invest resources which you may need tomorrow. It is recommended to start with small amount of investment and resources which will not be needed in the short term”.
Crypto newbies must analyze the price and market cap
You should analyze various variables of cryptocurrency using a reliable page like CoinmarketCap.
By analyzing the price of the cryptocurrency, we can see whether it is in the moment of low or high, and make a buying decision based on that.
As per Coinmarketcap’s description, we can understand that market cap is, “the total market value of the circulating supply of cryptocurrency. This is similar to the free-float capitalization in the stock market.”
In other words market cap = current price x circulating supply.
In the above image the user will be able to see the total supply of bitcoins currently and it has decreased by 3.76%. An analysis of the said data will help us understand how much cryptocurrency dominates the market.
Crypto Newbies Should Read The Recent History Of Price Variation
Briefly analyze the behavior of the cryptocurrency of your choice. How unstable is it? What are the market trends?
In this graph, the investor will be able to analyze the price of bitcoin during different periods. Also they can analyze the open market price, high, low price and closing price on different dates.
The investor can study how the price of a cryptocurrency was developing at different times throughout the day. In this case, the value of bitcoin dwindled within hours.
Crypto Newbies: The Takeaway
The cryptocurrency market is one of the most volatile markets in the world. Investing is an activity that takes time and dedication. It is imperative that the new investor dedicates a fair amount of time to know the condition of the land before starting out. Invest only what you are willing to lose. and have fun!
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