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How To Do Research On Crypto Coins and Tokens In 2023
Summary
Researching crypto coins and tokens is an important part of making informed investment decisions. Knowing the history, current market trends, and potential future performance of a coin or token can help you make better decisions. (10 min read)
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( votes)When buying bitcoin coins and tokens, extensive research is essential. The technology underlying the currency or token should be examined, researching the project, development team and community, as well as the market’s general demand and growth potential.
With the recent fall of crypto exchange giants, scams, rug pulls and economic factors hampering crypto prices. It is crucial to carry out proper research before investing in a crypto coin or ERC20 token.
There are so many ways to do the research that it becomes quite overwhelming. Like, by keeping an eye on pricing, trading volumes, and social media activity, one can spot current trends in the cryptocurrency market. This can reveal which coins and tokens are gaining and losing ground in terms of popularity.
You can utilize analysis of past data to spot trends in price and trading volume and forecast future market moves by looking at charts and chart patterns, as well as following news and developments in the sector. In this article, we will help declutter the noise and discuss how to research a crypto coin or token. Note, the research technique mentioned is the one that I use, it doesn’t guarantee success but will certainly help to make informed choices.
Get To Know About The Economics Of Your Crypto
Before starting to research crypto or determine the suitable crypto or token to research for. First, make sure the crypto is in good economic condition. To figure out which crypto coin is in good economic, you can visit websites such as CoinMarketCap or CoinGecko.
These are websites which provide market information about various types of crypto coins or tokens.
Visit: CoinMarketCap
This site information such as the market cap and volume of a crypto coin or token. Look at factors such as the market cap and volume of different crypto coins.
What is the Market Cap
A crypto coin or token’s market capitalization is a measure of both its total worth and acceptance. It is computed by dividing the overall quantity of coins or tokens in circulation by the price at which a single coin or token is currently traded.
This indicator is frequently used as a benchmark to assess the relative size and appeal of various crypto assets and to spot market trends. Market capitalization can give information about a cryptocurrency coin or token’s value, but it is not a predictor of future performance and should be weighed against other factors when assessing a coin or token’s potential. A crypto coin having a higher market capitalization than another is typically thought to be more valuable and reliable.
What is the Market Volume
The total amount of coins or tokens that have been traded over a specific time period is referred to as the market volume of a cryptocurrency coin or token. It is a measure of the market activity of a coin or token and can give information about the degree of demand and liquidity for a certain crypto asset.
A coin or token with a high trading volume is typically more liquid and simpler to buy or sell because it is more widely traded.
On the other hand, a coin or token with a low trading volume may be less well-known or less frequently traded and may be more challenging to buy or sell.
Make sure the coin of your choice is listed at least in one of the reputed coin market exchanges. The coin market exchange should also have a considerable amount of trading volume. In the case of an ERC20 token like UniSwap make sure to do more research as the exchanges don’t have extensive criteria for tokens as they do for crypto coins.
Use Research-Based Information
credit: Messari
You can learn more about the technology, competitive landscape, and past performance of a coin or token by using research-based information, which can also shed light on the coin or token’s growth prospects.
Furthermore, research-based data can show any alliances or joint ventures the coin or token has formed, as well as any future developments or occasions that might affect the coin or token’s value.
Sites like Binance Research, Messari and ICO Drops are such suitable websites. You can also refer to YouTube to gather more information about a coin if it’s available. Let’s take the case of Messari,
- If you don’t already have an account, go to Messari and do so.
- Enter the name of the cryptocurrency you wish to learn more about in the search field.
- Examine the details offered on the Messari profile for the cryptocurrency. It consists of the coin’s market cap, volume, history and such relevant info.
- To learn more about the cryptocurrency’s technology and goals, read the whitepaper and visit the official website.
- Keep an eye out for any forthcoming activities or advancements that might affect the value of the coin.
Learn About Its Tokenomics (Token Economics)
Credit: Messari
Tokenomics is a means to comprehend the operation and potential value of a cryptocurrency coin or token. It examines elements such as the number of coins in circulation, their distribution, and their potential applications.
It also examines the coin’s underlying technology and the incentives put in place to entice users and investors. Messari also provides detailed coin tokenomics such as the history of the project, including whitepaper, its underlying technology and initial token distribution.
One of the key things to look out for, how the project was raised and how the tokens were allocated. ICO Drops serves useful information on such areas, but make sure to double-check the data with the information available on message and Binance Research.
While analyzing token allocation, make sure to notice that not the maximum of the token allocations is in the hands of the owning company. Because that puts the maximum authority upon the company, and the company can potentially manipulate the prices or even perform a rug pull.
Study The Origins Of The Blockchain
Credit: ICODrops
Check out the details on the coin’s profile on the ICO DROPS website. This will contain important information such as connections to its website, whitepaper, and social media pages.
Go through the coin’s whitepaper and determine the problems it is looking to solve, its technology and how it was made public. Look for its credible stakeholders, CEO, team and geographical factors.
By doing this you will get an idea of the future aspects of the company and what is the success chances of the coin.
Use YouTube and Social Media for Latest Information
Make use of the search capabilities on YouTube and social media sites like Twitter, Meta and Telegram to find information on the bitcoin coin of interest. Check if a video is available on the coin by the coin company CEO, any such informational video or interviews can provide a lot of useful insights. Pay attention to the kind of project the coin company envision and the future plans and execution roadmap.
If such videos do not provide enough information, or you want to be more insightful, then look for subject-matter specialists, such as analysts, traders, and developers, whose articles or videos might provide insightful analysis. Also, watch out for any community discussions or disputes over the coin, as these might give you an idea of how the market and investors’ sentiment.
Dig Deeper
Credit: cardano docs
The methods provided above can provide useful insights into a crypto coin. However, sometimes some of the information for the exchange articles can be outdated. For serious research, more information may be needed, to do this. Refer to the coin’s official documentation to find some more insight about the coin, Look for information on,
Coin’s blockchain consensus mechanism, the method through which a coin’s network agrees on the state of its ledger, is called its consensus mechanism. You can determine a coin’s network’s level of security, scalability, and independence by knowing its consensus method.
Mining, the act of producing new currency and validating transactions on a blockchain network, is known as mining. You can obtain a sense of the network’s decentralisation, security, and profitability by understanding its mining process.
Staking can be a method for users to profit from their investment, depending on the coin. It can provide insight into how profitable staking that coin would be. Holding a specific number of currencies in a wallet and using them to confirm transactions on a blockchain network is known as staking.
You can also use a Blockchain explorer or, in case of a toke, use Etherscan. To learn more about token distribution.
News, refer to the news for the current trend and the possible predictions related to the coin. Also, do check out for any available interviews or statements or any kind of announcements made by the CEO or any other relevant member of the team of the desired coin.
Here is a list of useful research websites for crypto research:
Conclusion
- First, learn about the economics of the crypto coin using a site like Messari or Binance research.
- Further study the tokenomics of the coin or token, refer to research sites, the coin’s whitepaper, any collaborations, ICO and underlying technology.
- Check out Social Media like YouTube, Meta and Twitter for additional information like coin’s CEO’s interview, vision, roadmap and future predictions.
- Turn to Coin’s official documentation for some more information on staking, consensus algorithms etc.
Crypto coin research can be a difficult and lengthy process, but it’s a worthy process considering the returns it might potentially offer and growth aspects. Continuous monitoring of any news and learning new information can be helpful in making wise decisions for maximizing profits and minimizing losses.
