Best Crypto to Add to Your Portfolio: How to Find the Right Digital Currency for You

Welcome to the crypto market! If you joined the boat over the last few months, you most likely have heard that it is going through a volatile period, and some experts predict the prices will continue to fluctuate for another couple of months due to fears of recession and increasing inflation. However, despite the bear phase the market is going through, there are still around 9,500 different virtual coins available for purchase. Therefore, the world of decentralised currencies is going nowhere.

But for a novice who just started their journey in the crypto world, it might be challenging to decide which digital asset to add to their portfolios, considering the multitude of choices at hand. This article is supposed to help you pick the right cryptocurrency as a beginner who still has plenty to learn about the decentralised world.

Here are the factors you should consider:

1 The community supporting the cryptocurrency

The following often decides a cryptocurrency’s success, so it’s wise to look out for digital assets with enthusiastic communities and loyal followers because it proves that the public has a genuine interest and belief in the virtual token. Reddit is going to be your best friend because you’ll go through many subreddits to grasp the public’s perception and opinion regarding the digital currency you want to invest in. YouTube and online forums can also provide feedback from the cryptocurrency community because its loyal followers won’t shy away from talking about it everywhere. If you’re confused about the token’s features, checking the community on Reddit and reading tweets can help you understand if the altcoin could make an excellent investment. Resources like Reddit even break down and explain technical concepts, but novice investors like you find it challenging to understand.

2 Dig up information about the currency

Please don’t add a cryptocurrency to your Binance wallet before running a fundamental analysis because it uncovers information about the project. Research to find out more about the team behind the project, their goals, their strengths and weaknesses, and any other detail that can help you determine if the currency is worth your time. Don’t sweat the technical stuff because you don’t fully understand them, head to the Reddit page dedicated to the digital token and ask the more seasoned traders to help you out. Fundamental and technical analyses are crucial when deciding what digital currency is the right fit for your profile.

3 The team

As stated before, you must learn more about the people behind the currency. Here are some things to look up to. Who developed the currency? Does the community trust their expertise? Are the developers ambitious enough to maintain the project competitive on the market? Do they have a proven track of success? Answering these questions can help you shorten the list of possible cryptocurrencies to invest in because the team can impact the cryptocurrency’s success. To help you figure out what a reliable team should look like, check Ethereum’s team.

4 Find more about the technology behind the cryptocurrency

You don’t have to be an experienced cryptocurrency trader to understand that the technology powering a virtual asset impacts its success. The technology used to develop a digital token enables you to understand how it’ll perform against other cryptocurrencies and if it features any characteristic that might help it stand out from the crowd. It’s best to add assets associated with big innovations to your portfolio because they’re more likely to disrupt the market.

Let’s look at Ethereum again (mainly because it just completed the Merge, making it one of the most interesting digital currencies on the market).

Ethereum has one of the innovative technologies because it allows the creation of smart contracts, which enable the exchange of valuable assets. Developers find it easy to create and integrate applications on Ethereum’s blockchain.

5 Read the white paper

When a new crypto project is launched, its developers usually release a white paper to share the token’s purpose, technology, and other details with the community. Therefore, the next thing you should check before investing in a cryptocurrency is its white paper to evaluate its fundamentals. Experts recommend never investing in a project that has no white paper. Expect to find plenty of technical jargon, but don’t let it scare you. Reading it provides great insight into its utility, features, and future evolution.

Reading as many white papers as possible is recommended to gain experience in identifying long-term winners. The document tells you about the token’s credibility and professionalism and allows you to identify any red flags.

Here are some questions you should try to answer when you read the white paper:

• Does the project promise something unrealistic?
• Is the cryptocurrency ambitious in what it aims?
• Does it contain spelling mistakes? Several spelling mistakes could mean a red flag.

6 The cryptocurrency’s vision

The vision of the virtual asset is essential because it helps you figure out if it’ll be around for another 10-15 years and if the developers think long-term. If the team behind the cryptocurrency has a big vision, it shows they’re ambitious and will put all the necessary effort into growing the cryptocurrency. You should find the cryptocurrency’s vision on its website, social media, or white paper. Read all the information available about the project carefully, and try to identify the intent for the future of the asset. It’s also wise to have a look at the community to see what type of culture it promotes. Seasoned traders prefer to add cryptocurrencies with strong visions to their portfolios because they’re more likely to survive through bear and bull phases and pay off in the long term. Short-term gains are also exciting, but it’s crucial to adapt your strategies to the market’s fluctuations.

Did you find this guide useful?

The above factors should help you understand if a digital currency has the potential to provide you with profit. And whilst no one can tell you that a particular token is a safe bet, they can help you find one that fits your trading style.