The five criteria for evaluating a Cryptocurrency (or a Crypto project)
Often my followers contact me privately and ask me: “Albert, would you put $ 100 on this crypto?” or “Albert, do you think this project is good? Do you think it will take off?” Obviously I don’t have the magic sphere but in recent years I have learned to distinguish in the Crypto world the realities that have a future from those that will last a short time. I have seen some very good projects that failed early and also projects that started quietly and then became pillars of this sector. In my opinion I have identified what are the 5 fundamental criteria for evaluating a Cryptocurrency (or Cryptographic project):
- is the roadmap forward-looking? Is the team reaching the set milestones? Does the white paper show a long-term sustainable project? A solid crypto project will have a strong and well-defined white paper and roadmap.
- what kind of application does it have? Does the project have any real use? Does it solve real needs? Does it help a large pool of people?
- are the various social channels (YouTube, Discord, Twitter, etc.) active? Is there interaction between users? The enthusiasm and size of the community play a large role in the initial and continued success of the project. As you well know, you can buy followers through bots and agencies. If you see that the community is large but there are few interactions, something is wrong. The community is fundamental for the progress of a project, it is the fuel that pushes the founders to improve the project. Follow projects with large and lively communities. In addition, the website should be easy-to-navigate and functional.
- are the investors credible? It is a good sign if well-known investment firms have already invested in the project.
I want to underline another very important point. Don’t listen to the advice of influencers and celebrities who have nothing to do with the Crypto world. I’m talking about the recent case of EthereumMax. Boxer Floyd Mayweather, socialite Kim Kardashian and former NBA star Paul Pierce are being accused of misleading investors to purchase EthereumMax (EMAX) and then dumping it on them as its value plummeted. Mayweather was connected with the project as EMAX sponsored his heavily publicized boxing match with YouTuber Logan Paul. Kim Kardashian posted a story on Instagram where she allegedly urged people to invest in EthereumMax.
Former NBA star and TV sports personality Paul Pierce also got on the EMAX bandwagon, using his social media to pump the project. What happened then? Obviously EthereumMax pumped … and dumped … and thousands of people lost their money. From the graph below you can see the EthereumMax pump of May-June 2021 which coincides with the posts and announcements of the three personalities and immediately after the dump.
Today EthereumMax is a dead and buried coin. But what literally shocked me is this survey by Morning Consultant. According to the survey, forty-five percent of Crypto owners would be likely to invest in a Cryptocurrency if a celebrity endorsed it.
Would you ask a plumber for advice on how to embroider a sweater? No. Would you ask a policeman for advice on how to make a video and edit it on YouTube? No. So should you listen to the advice of an influencer or sportsman about Cryptocurrencies? Absolutely no.
Use the five criteria I explained above and Do Your Own Research.
A winner is a dreamer who never gives up.
Disclaimer: I am not aware of any third party rights on the images used. I undertake to cite the source if there are any and to adjust the position if requested.
Disclaimer: Trading cryptocurrencies carries a high level of risk and may not be suitable for all investors. Before deciding to trade cryptocurrency you should carefully consider your investment objectives and your level of experience. Do Your Own Research. All opinions expressed here are owned by the respective writer and should never be considered as financial advice in any form.
ABOUT THE AUTHOR