Have you ever stumbled upon a post telling you these are the best cryptocurrencies to invest in for high returns? If you are a crypto enthusiast, you must have seen blog posts like this whenever you go on the internet to look for the best crypto to buy. While investing in cryptocurrency is a lucrative adventure, it is expedient to do comprehensive research on a crypto before buying. Otherwise, you might lose your money.

This is where the abbreviation DYOR comes in, which means do your research. How well you research is likely how well you invest in the right crypto assets. But this can be daunting, especially if you are a crypto beginner. But no worries, this article has covered you, whether you are a beginner or familiar with the crypto market.

In this article, we’ll walk you through the type of crypto investment and how you can select the best cryptocurrencies to invest in.

Types Of Crypto Investment

Regarding crypto investment, most people are usually limited to direct buying and holding one or more cryptos for a long-term goal. However, the most common crypto investment is far beyond just adding coins to your portfolio. Below is the list of different crypto investments you might be interested in.

i. Direct Crypto Buying:

While this is the most common type of crypto investment, it allows crypto beginners to enter the world of cryptocurrencies. Investors can invest in popular crypto coins like Bitcoin(BTC), Ethereum (ETH), or even newly released coins.

ii. Investing In Cryptocurrency Companies:

Investors who invest in crypto companies must know how cryptocurrency and the blockchain work. You can invest in cryptocurrency mining or cryptocurrency support companies like PayPal Holdings Inc. (PYPL).

iii. Investing in Cryptocurrency-focused Funds:

There are other alternatives, like investing in cryptocurrency-focused funds. You can invest in exchange-traded funds like future funds index funds, among other crypto investment trusts.

iv. Investing in a Cryptocurrency Roth IRA:

Investing in cryptocurrency Roth IRA allows you to enjoy the advantages of an individual retirement account (IRA). This investment type can also secure your crypto holdings.

v. Going Into Crypto Mining:

Better still, you can become a crypto miner or a crypto network validator. You can hold your crypto rewards or exchange them with other cryptos as a crypto miner.

Factors To Consider Before Investing In Any Crypto

Now that you have known the different types of crypto investment, below are what you should consider before investing in any cryptocurrency.

1. Understand the fundamentals of the project.

It is expedient that you understand the fundamentals of any crypto project you wish to invest in. To better understand a project’s fundamentals, you need to consider the following:

The Project’s Value Proposition:

A good project will always have a clear and concise value proposition that can be easily understood. A project’s primary utility or purpose is what makes it unique among other crypto projects.

Is The Project Open Source Code?

By open source code, it means that the project allows anyone to contribute to the development of the project. Not only do such projects demonstrate commitment to transparency and security, they also enhance robust community-driven support.

2. Check If the tokenomics of the project are fair enough for investors

It would help if you considered the following when evaluating the tokenomics of a crypto project.

Token Distribution:

Questions like, how is the token distributed? Is the project decentralized? These are some of the questions you should consider. Projects with limited wallets holding the bulk of tokens should be avoided. Prices may be easily affected by whales.

Project Vesting Schedule:

A vesting Schedule is a predetermined time when the tokens of a project are released to its investors, team members, or other stakeholders. Beware of projects with large private sales (pre-sale) allocation and quick unlocks.

Emission Rate/Curve:

This refers to the pace at which new coins are created and launched into the market. Ensure you understand the mission rate of any token that incentivizes interaction or liquidity. Such a project could easily be diluted even while you are holding it.

3. The Team Involved And The Project’s Roadmap

Project’s Team:

A team backs every project. Having a team who are experienced and capable of enforcing the project’s vision adds to the project’s credibility.

Maturity Of The Project:

Before investing in a crypto project, be sure to figure out the project’s maturity. Although investing in projects at their early stage could yield higher returns, they also carry risk.

Community Interaction & Roadmap:

Projects that adopt Decentralized Autonomous Organization (DAO) are transparent and Communicative. Another good indicator is that they host AMAs regularly to interact with their community on Telegram and Discord. Additionally, ensure to go through their roadmap to understand every project step.

Doing your research (DYOR) is easier said than done. With this information at your fingertip, you can be assured of doing comprehensive research for your crypto investment.

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