Coins and tokens is the game, cheap cryptos to potentially invest
Cryptos no longer a mystery, by now the majority witnessed and participate in such investments. Unfortunately for some enthusiasts not profitable since not many cryptos made it thru presale. Today’s article will target coins that will potentially give back to investors up to 500% returns on the investment. Some of our readers’ herd about the potential financial crisis predicted by JPMorgan.
Many analysts are pointing out cryptocurrencies as a “safe haven” and for the past week, we noticed new highs on the market. For a better understanding of cryptos please refer to my other guides where I explain different strategies. Let’s understand first why to invest in cryptos, what are the risks and reward ration. First and foremost, all investments carry moderate or high risk. Experience investors understand better the risk to reward ratio while beginners might fail.
Risk and Reward ratio explained for cryptos
When it comes down to cryptos trading the risk is misunderstood mostly by beginners. If choosing to buy and hold cryptos will actually be less risky than trading on volatility. So let’s understand why by comparing other types of investments with similar risks. Imagine you just purchased a house at the price of $350,000 and after a year the value increased by $50,000.
Deciding to sell the house you made $400,000 that is 14,3% in a year. What could go wrong in this equation? Let’s assume that the price decreased and the value of your house is -14,3%. Not selling the house results on no losses but a slight devaluation. Cryptos are the same, as long as you’re not selling the price can move up and down without you losing a penny.
ZERO value for both type of investments
There is still a probability for both investments to worth ZERO since other factors can affect the value of the assets. For cryptos to reach ZERO it means global financial collapse, not happening anytime soon. For some cryptos to reach ZERO, it means their solution or technology for blockchain is not a working one.
Similarly, not many crypto enthusiasts believed or invested in the project leading to the same fate of cryptos. Another reason is geopolitical tensions where cryptos can reach ZERO. Trust me when I say if that happens your investment will be the last thing you’ll care about. Going back to our house for it to reach ZERO it means natural disasters and/or geopolitical tensions. Balancing both cases and holding cryptos can carry a slightly higher risk than our house.
Because you still have the land where the house was initially built you still end up with something.
The game of coins in its simple form
Investing in cryptos you need first to analyze the circulating supply and max supply.
Max supply represents the number of coins/tokens issued and the total allocated for private, pre and crowd sale. Circulating supply calculates as the total amount of cryptocurrencies distributed to investors and in some cases miners. Higher circulating supply can mean a higher success for the project since the volume exchanged or traded is higher.
Similarly, crypto will exponentially grow in value if the traded volume surpassed the previous number. You can analyze the volume hourly, daily, weekly and monthly. Cryptocurrencies are appreciated every time the market cap is higher, meaning it’s constantly traded. The number of exchanges cryptocurrencies are listed can be another factor to look for before diving into investments. Finally bringing us to the final aspect of cryptos, the structure of the project, road map, white paper, and the team.
All the above mentioned must be analyzed properly for a better understanding if that coin/toke will survive in the long run. Remember, this is NOT a get rich fast scheme! If you prefer that type of investment trade cryptos as CFD.
To Buy or Not to Buy
There is an ultimate trading technique or a crystal ball when it comes down to investment opportunities. But that is not stopping traders to take advantage of opportunities when it comes down to cryptos. Make informed decisions before investing in cryptos and always take into consideration the worst case scenario.
Like always I wish you Happy Trading and Every Success!