Backed By Bitcoin Blog
February 1, 2023
Donny Diamond Hands
THE SECRET TO CRYPTO RESEARCH
In this edition of the Backed By Bitcoin Blog we will be going over how to research. This is a skill that basically separates the noise from what is actually true. New World Bankers base investment decisions on previous historical price data and fundamental analysis. We make decisions using price charts, news from “Crypto Twitter”, mainstream outlets and other online metrics to gauge sentiment. One important tool to gauge sentiment can be found at this link https://alternative.me/crypto/fear-and-greed-index/. This tool uses a lot of online metrics to spit out a number on where they believe the sentiment of the market is. You can use our other tools as confluence to agree or disagree with this tool. It is very easy to load up on blue chip cryptos during the bear market once you know a few sites to be able to perform research on some of these coins. I’ll outline a few things here and give you my thoughts on some of the better ways to research a cryptocurrency.
To ensure success, I always start with www.CoinMarketCap.com. This site will give you a quick synopsis on sentiment, provide details on tokenomics, give you current price and show you where to be able to acquire the token. After you’ve had an opportunity to familiarize yourself I start by reading the blogs of the team and looking over the website. I also always take time to read the whitepaper for any project that I plan to invest in. The website and whitepaper will give the foundation on how the project is supposed to run. It will be especially important to focus on tokenomics while researching. Some projects may be hard capped, similar to Bitcoin and some projects may be inflationary with plans to reduce inflation later such as a burn mechanism.
It is vital to understand that 90% of these cryptos will fail and the big players in 10 years, may not be who has the most market cap at the moment. We need to research for infrastructure and fundamentals, therein will lie our opportunity to be wildly successful in the crypto space. I think it is important to know everything possible about the protocols you are trusting with your money. We need to know how it’s governed and who holds most of the power. In the end, all a smart contract is is a community of people who choose to follow certain rules within a transaction.
After you’ve spent some time familiarizing yourself about the project on a basic level, it will be time to start joining and following communities. These communities can normally be found on discord or other online forums. Links to these forums will appear on the homepage for the coin or on CoinMarketCap. Follow these communities to haulage sentiment, ask questions and in some cases be able to ask developers questions. This is one of the more powerful parts of crypto in my opinion. A good crypto will have an established and experienced team, a strong community and an online presence that can be traced back for many months or years.
Additional research can be carried out by reading books by independent authors and going to local meetups and lessons on cryptocurrency. Crypto requires a lot of reading to be able to be consistently successful. Educating yourself will be paramount to you success and research is all about learning the facts you need to know to predict success or failure. I’ve used these skills extensively in my own trading. Research made me a much more comfortable and consistent trader and crypto enthusiast. Research is the backbone to what we do, it is imperative that you embrace learning and transform yourself into the type of person who can synthesize complex information into digestible pieces. It is a pre-requisite to accumulating the correct coins and cashing out at the top of the market cycle.
