When talking about cryptocurrencies, Bitcoin is the first which comes to our mind because it has the largest market capitalization among cryptocurrencies. But there are also other cryptocurrencies in the market like Dogecoin, Ethereum (ETH), Litecoin, Bitcoin Cash, Dash Ripple, our very own Indian Polygon (MATIC), Cardano (ADA), Polkadot (DOT), and many more which can be the next bitcoin or probably more?
Which cryptocurrency is best? Find out using these simple steps
How to select a cryptocurrency?
First of all, go to https://coinmarketcap.com/ here you will find out a detailed analysis of each cryptocurrency available
In the cryptocurrencies section, you will find a feature of circulating supply, it shows how much is the max supply of the currency and how much is already mined. From here You can get an idea of the demand and supply of the currency. The lesser the resources the higher the demand, But you will also find currencies with an unlimited supply which does not give a clear picture of investment
Market cap of cryptocurrency
In the market cap section, you have to check the highest and the lowest market cap of cryptocurrency, Preferably cryptocurrencies with a high market cap can be trusted more as more people are trusting on it Market Cap = Current Price x Circulating Supply.
Holders of cryptocurrency
Now, click on a cryptocurrency and there you will find the holders section, click on it and now holders’ percentage in the currency will be displayed, many currencies do not disclose their holder’s data which is again a red flag. So there you should check that the top hundred holders should not have more than 50 % holdings, which means even if the top hundred holders drop their holdings the currency will not become zero.
White Paper of a cryptocurrency
By clicking on a currency just below the name of the currency you will find options like white paper, explorers, community, sourcecode. From there click on the white paper and you can see the detailed analysis of mining of a currency and technologies used in it.
Community of a cryptocurrency
You can also go to the community option and track their latest posts or if Twitter is available then track their latest posts dates if they posts frequently means it is a green flag
Categories of cryptocurrencies
On the Cornmarket cap home page next to cryptocurrencies, you will find a category option click on it and several categories like options, gaming, memes, education, tourism, etc will be displayed, these categories mean under which several cryptocurrencies are mined. You can also select cryptocurrencies under your favorite or future growth category
So, these were some basic factors from which you can choose your own cryptocurrency
Note : Investing in cryptocurrencies is a highly risky affair and should not be done without first analysing your risk profile and the government’s regulations