Factors to consider before investing in cryptocurrencies

[Lhez]

Investing in Cryptocurrencies is just like any other investment. It’s always a risk so always, always follow the number 1 rule of investing: “Only invest or trade with whatever you can afford to lose!” and the second rule: “Stay… profitable!!!”.

Cryptocurrencies are truly revolutionary. As long as you take the time to understand the properties of cryptocurrency, then you will have a more profound comprehension of what it is all about.

After the birth of Bitcoin, more than 1000 altcoins and crypto coins have been created with at least 919 trading actively on unregulated or registered exchanges. According to CoinMarketCap, there are close to 787 cryptocurrencies currently trading around the world with a combined market capitalization by circulating supply of US$102.6 Billion and US$1.9 Trillion by total supply as at end of June 2017.

The first factor to watch when start investing in Cryptocurrencies is Market Capitalization, this is one way to rank the relative size of a cryptocurrency. It's calculated by multiplying the Price by the Circulating supply. Second is Circulating supply, this is  the amount of coin available at the present time and circulating in the market. Third is Current total supply and Maximum supply. Maximum supply is the amount of coin that will ever exist for a particular crypto currency.

The effective crypto coins in its nature truly depends on the fifth one, Liquidity. Liquidity of altcoins can be used to measure its market share, market maturity, and market acceptance. The coins need to be widely traded on exchanges to be considered a potential growing coin.

Sustainability is one of the key, thus it is important to track the development activity of coins via public source code repositories.  The reason why is important to look at this is that some coins are no longer maintained by the developer, the sixth factor, thus those coins would appear very unlikely to progress over time.

By looking at how much interest and effort goes around the development community, there is a chance that the coin will continue to innovate according to how the crypto currency market sees fit.

Some of the repositories where you can check the development of a certain coin are Github, Bitbuckets, etc.

They say, whatever the trend is, will not be successful if there is no group or community supporting it or doing it. Cryptocurrencies tend to experience tremendous growth when there is a strong community backing it. A strong community contributes to new ideas and new features to be incorporated into the coin, increases trading volume, and signifiers growth towards a bigger market. So community is very important factor.

Lastly is the public interest. Any trend in any nature without patronage is nothing but it always start from something small which creates a bigger space in someones mind, interest. Engage and Search engine total results and web popularity can be used to measure mainstream interest
and popularity of a coin.

A lot of factors may seem affect the numbers and graphs of cryptocurrency but is always up to us to search and research for something authentic, profitable and worth investing and waiting for.  

You, what could be the factors that we need to consider before we invest in this field?