Before You Invest in ANY Crypto Project

Before You Invest in ANY Crypto Project

FOMO (Fear of Missing Out) is real, and before you find yourself liquidating your 401k to invest in the next Koala Coin (it's not a thing yet but give it time...), you should comb through the project with a fine tooth comb.

Here are 10 things to assess with every crypto project before you hand over a dime!

  1. The team behind the project: It is important to research the team and ensure they have relevant experience and a track record of success. This space is filled with people piggybacking off other projects' success.
  2. The technology: Make sure you understand the technology behind the project at least at a basic level. If you can't explain the basics to someone else, you probably don't know enough to invest real capital.
  3. The market demand for the project: Will others be willing to invest financially in the project? Understand the potential market the project can go after so you can estimate an appropriate price point.
  4. The competition:  Are there other projects targeting a similar use case? If so, this could be good because it may validate that the use case is real and has a potential market. Competitors also mean competition so assess how each project stacks up.
  5. The use case: Do you understand the use case? Is the project solving a problem or is the project looking for a problem to solve?
  6. The token economics: What is the current market cap of a project? If a coin is selling for less than a dollar, this doesn't mean that the project is cheap. You have to look at the unit price of a coin and compare it to the circulating supply. Does the market cap make sense for this project? Is it undervalued or overvalued?
  7. The partnerships: Partnerships provide validation. Partnerships can also assist with market penetration. Are there any significant partnerships with the project? Be wary of "potential" or "future" partnerships and look for an announcement from the partner to confirm the relationship, not just the crypto project.
  8. The regulations: Is the crypto clearly secure? Are there any regulatory issues that could impact the overall success of the project?
  9. The community: Is the community toxic? Are most of the community members just trying to sell at a higher price or is there an active development scene where the community is helping make the project better?
  10. The roadmap: Least important but what is the road map? You cannot bank on the road map being done but use a project's roadmap to determine what market they are aiming to go after.

One bonus tip. Whatever decision you make AFTER your research, sleep on the decision one more night. If you wake up and still think Red Koala Coin is worth a play, have at it!

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