To be successful with cryptocurrency investment you need to look at the total market cap size of the cryptocurrency you want to invest in. Don’t just look at the current price of the cryptocurrency as a way of determining its potential for growth. This is not the best way at all to determine the margin of process that the cryptocurrency has.
You must take a look at two factors:
- The total capitalization (or market cap) of the cryptocurrency – this is a simple matter of multiplying the total number of cryptocurrency tokens in circulation by the value of a single token.
- What has been the increase in capitalization? How has the cryptocurrency grown since it was first launched? If there have been significant gains since the ICO (Initial Coin Offering) for example then this is usually a sign that it is less likely to progress going forward. If you notice that the value of a crypto has fallen significantly since the ICO then this could point towards it being a scam.
You will need to exercise caution if capitalizations seem very high. If a crypto has fallen in value significantly since its ICO then this doesn’t definitely mean that it is a scam. It’s possible that the team behind it are focusing on other aspects of the project right now and not on marketing. It could also have reduced if the crypto market has fallen in general.