The crypto industry accounts for over 20 000 coins and tokens presented in crypto rankings and listed on crypto exchanges. People who only start entering the crypto investment world often get lost when picking assets for investments. In this article, we will discuss some main characteristics of crypto projects for you to sort out which is better to buy.
The main things to look for when choosing a digital asset:
- Price
- Crypto market cap
- Trade volume.
Looking at a crypto price list, you can see that crypto rates are very unstable. It is explained by high volatility. To pick the less volatile digital coin that would show relatively stable development in the future, look at the cryptocurrency market cap.
What is Capitalization?
The market cap for cryptocurrency is the total price of all digital coins that are now in circulation. To get it, multiply the relevant value by the number of tokens in circulation. You might also meet the term “fully diluted cap,” meaning the total value of all the coins that are now in use and what will be issued in the future.
Why does market cap matter when picking an asset for investment? The higher the indicator of the market cap, the more stable the asset is towards market trends. That means if people start selling the asset, it will not collapse its price immediately. The lower the cap, the more sensitive the asset to fluctuations and the easier it is to go up or down.
We can’t say that only large-cap coins are worthy of being bought. Middle and low-cap coins also deserve attention, at least because it will not take long for them to skyrocket during the next bull trend. However, the cap is not the only indicator to pick assets by. Also, pay attention to:
- the technology of an asset;
- real use cases;
- listing on large crypto exchanges;
- whitepaper and roadmap;
- social networks.
If you want to learn more about crypto investments, welcome to the WhiteBIT blog. It has interesting and helpful articles and manuals on crypto topics.
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