Doing thorough research before investing in cryptocurrency is crucial for several reasons:
Understanding the risks: Cryptocurrency is a highly volatile and speculative asset class, and the prices can fluctuate rapidly, often without any apparent reason. By doing your research, you can understand the risks involved and make informed decisions based on your risk tolerance and investment objectives.
Having stressed the need for doing your own research before investing in Cryptocurrency, here are few ways/factors you should consider:
1. Who is/are the founder of the token/coin: This a very important information you need to know before jumping into investment. founder with a bad image, such as a well known scammer, criminal, is likely to create a scam project that will rug pull.
2. What's the coin maximum supply: Knowing the maximum supply of a particular coin that want to invest in will help you to make an informed decision.
3. What's the circulating supply of the coin: Coin circulating supply plays a vital role in the price, imagine a coin with maximum supply of 100billion and only a circulating supply of 10million and you entered all in. your guess is as good as mine when 50% of the supply is released.
4. Which platform is the coin tradable: Some platform like Binance has built credibility over the years, any coin listed on Binance or these exchanges ain't view the same like others.
5. What's the project goal and how they tends to achieve it: This particular information is mostly available on the project Whitepaper, research it and how far they have achieved so far judging from the road map.
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