How to invest into crypto projects correctly?

The crypto boom sparks in many of us a desire to invest some of our money into new projects. When BTC price is too high, and buying the first cryptocurrency seems impossible, users look for more affordable and still very profitable projects. ICO, IEO and DeFi projects that are only entering the market. But how do you choose reliable ones? There is some advice that can help you not screw up! 

Every time you put money somewhere, it can be speculation or investment. Speculators’ aim is to buy for a very low price and then sell for a higher price; the whole operation may take just minutes. For speculations, it is important to feel the market and understand the mechanisms behind it. For investors with low experience, it is more advisable to use investment strategy. Then you choose reliable projects that are guaranteed to give 5-15% of profit yearly. These are long-term investments for at least a year.

Portfolio

A well-balanced portfolio can contain either crypto assets or a mix of crypto and fiat assets. Fiat money can be invested into stocks, funds, businesses, or put into a deposit for the interest rate.

Crypto assets can work in different ways too. The most reliable one is to buy coins. The riskiest one is to buy coins at ICO when coins are bought from newly-emerged projects.

When forming a portfolio, there are two rules:

  1. The more different cryptocurrencies there are, the more reliable is the portfolio. Even if some decrease in price, others will outgrow it.
  2. Around 70% of the whole investment should be kept in reliable assets, the rest – in riskier ones.

With these two rules, your investments will definitely stay safe. If it already happened to your past investment, try to compensate your losses, for instance, with GIIS.

Choosing criteria for buying cryptocurrencies

The first thing to check is the coin idea. Let’s see the White Paper, their Roadmap and the developers’ team. The White Paper should be unique and connect with investor’s views on business. The roadmap should contain all the completed landmarks, showing that the team is moving along with its plans. The developers’ team should be open for investigation, with all the names, lifelines, so it was possible to follow the reputation of each one.

The second step is checking the media space: their current website, social networks. What do other investors write about the coin? Are there any scandals or broken promises? The older the coin, the more scandals there are, which means it has already survived some rises and falls, so there will be fewer of them in the future.

The real work on the coin can be seen on GitHub. If the project is renewed at least every 5 days, then it is not deserted. Rare updates can be compensated with a unique idea and a strong developers team.

Then let’s take a look at the coin. It is better if the coin emission is limited because an unlimited amount of coins creat inflation. How many exchanges work with this coin? It is best if the coin is included in the top 5 most popular exchanges. One can see real activity on the coin, not its formal presence in the list.

ICO choosing criteria

Investors who collect the cream of the cream in new projects have the highest profits. You should choose new projects following the same criteria, just more carefully. Great profits bear great risks, an unverified project takes more time to study.

If an investment failed

Sometimes, our investment does not bring profit, the coin loses its value. In a well-balanced portfolio, other investments will cover the losses; apart from that, you can take part in GIIS – a programme that compensates lost funds if the investment amount exceeded 250 Euro. A well-balanced portfolio and a reasonable approach to its contents will enable you to save and increase your investments, while the GIIS programme will help return a part of an unlucky investment.

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