With over 5000 different cryptocurrencies and tokens listed on Coinmarketcap, it can be daunting to decide which projects to put your hard-earned money behind.
Instead of making investment decisions solely based on YouTube influencers, invest time in expanding your knowledge about this new technology. Like you would do market research before buying a car or a phone, learn and understand what you are getting into.
I learned this the hard way.
1. Don’t start from scratch
As pointed out in Top 3 Tips for a Newbie Crypto Investor, doing your research is critical. You can either spend days doing your research from scratch or accelerate your learning through the learnings of others.
Although YouTube was the single most valuable arsenal in my Crypto research, looking into the genre of projects being backed by top Crypto investment funds and Hedge funds helped me better assess the credibility of the projects.
After all, they are professionals who do this day-in-day-out for a living. They have met the founders of these projects, assessed their potential and risks, done stringent financial due diligence, and have had detailed conversations before backing the Crypto startups.
There are a plethora of Venture Capital Investment firms and Hedge funds that invest in Crypto and Blockchain related projects directly or through subsidiaries. The below is not an exhaustive list but a list of companies that have helped me during my research:
– Pantera Capital
– Andreessen Horowitz
– Draper Associates
– Digital Currency Group
– Blockchain Capital
Be mindful that these firms have deep pockets and can sustain longterm downturns in the market. They often keep a long term perspective while making their investment decisions.
2. Widen your horizon
“Intellectual growth should commence at birth and cease only at death.” — Albert Einstein
I was a total newbie to the world of Investing when I brought my first Bitcoin. Instead of learning more about the world of investing, I fell into the trap of chasing riches.
If you are getting started, it’s essential to learn about Investing in general and understand the broader socio-economic factors and history behind Bitcoin and Cryptocurrencies.
Some resources I suggest starting with are:
- Watching the documentary ‘Banking on Bitcoin’ directed by Christopher Cannucciari, which is currently available on Amazon Prime.
- Watching the documentary ‘Bitcoin: Beyond The Bubble’ on YouTube.
- Reading the book ‘The Bitcoin Standard: The Decentralised Alternative to Central Banking’ by Saifedean Ammous.
- Watching talks on YouTube by Andreas Antonopoulos and Anthony Pompliano.
- Watching YouTube series — Hidden Secrets Of Money by Mike Maloney.
3. Dig deeper
Once you have found a common theme and have developed an inclination towards a project, take the time to dig deeper and understand the project.
Go to their website, check the team behind it, their vision, read the white paper, look through their Github code, join their Telegram, Medium, Twitter, and other social media channels to see what is happening in the community.