Every investor should do their own Crypto Due Diligence before throwing money at a project. All too often, investors make bad decisions based off biased information or advice. One of Crypto Renegade’s missions is to help educate investors in making sound investment decisions using due diligence strategies. Being a long term investor in Crypto can be very difficult when you’re only paying attention to the price volatility. Instead, you should focus more on understanding the projects you invest in, which will help you from panic selling when markets drop suddenly. Four key areas to look at when you want to better understand a crypto project are the fundamentals, development, community and media.
Be sure to check out the Crypto Master List to find the following information on several top crypto projects.
Focus On The Fundamentals
What exactly is the crypto project attempting to do? What problem does it solve? Can existing businesses reduce expenses or profit from using it? How about the team behind the project? What kind of experience do they have? Are they actively building business partnerships? Are they involved in the community?
These are all great questions to ask before investing into any project. One of the best places to start your Crypto Due Diligence is the project’s main website. From there, you can begin analyzing the purpose of the project and whether its idea is viable in today’s marketplace. When researching any project, try not to get caught up in the marketing hype that most sites try to push, but rather focus on getting the answers you need and move on to the next. Most crypto projects provide a list of their main team members which you can use to further your research into the people behind the project. You will also want to look for the partnership section of the site to see the other businesses that are working with them. By taking the time to do this research and carefully examining the fundamentals, you will learn a lot more about the project and whether it’s a good investment opportunity.
Watching Project Development
One of the greatest ways to determine if a Crypto Project is making progress, is to review their public GitHub repository. Most projects make their source code publicly available on GitHub to increase transparency and trust in their systems. If you find the project you’re researching doesn’t have a GitHub account, you should carefully consider the reasons why, and determine if the team has a valid reason for not sharing their code with the community. Open source projects will very often get development help from their communities which is a great incentive for making their code publicly available. Some of things to look at on any project’s GitHub account is how much interest the project has, how much development activity is taking place and whether new releases of their software are consistent. Looking at the account’s Stars and Watchers is an easy way to see the interest in a project, while reviewing the number of commits, forks, outstanding issues and resolved issues is an easy way to determine development activity. If the team is consistently releasing updates to their software, this is another great sign of steady development. If you skip this step, you could risk investing in a project that’s all hype and no action.
Getting Involved With The Community
To get the most accurate and recent information on any project, you need to get involved with the Crypto Community. Read and participate on the project’s social channels. Most good projects have very active communities on Reddit, Twitter, Facebook, Bitcointalk.org, Medium, Steemit, and several others. If you can’t find the information you’re looking for, you’re sure to get back a quick response from the community if you ask a question. In fact, this is a great way to test how responsive their community is. Project leadership should also be involved in the conversations. If you discover that several people in the community are posting questions directed to the project’s social team, and they’re not responding in a timely manner, then this should be a red flag for you. A strong community is the backbone of all great crypto projects.
Using The Media For Crypto Due Diligence
One should be very careful when using the media for due diligence. It can be a very useful tool when combined with the other due diligence methods above, but can also be very manipulative if it’s the only source of information that you use. The Crypto Media loves to over dramatize a lot of their articles and videos, so you need to be balance this information with everything you’ve learned from the project’s website, github activity and community. If balanced correctly, you could learn to use the media headlines as a way to forecast great buying and selling opportunities. Very often, when the media is shouting how great a project is or some major event is coming soon, this may be a great time to sell. And the exact opposite is true when the media begins condemning a project, as this could be a fantastic time to buy! Of course, the media is not a good barometer by itself, but has proven to help when combined with good fundamentals, development activity and community involvement.
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The strategy in this article is best combined with the other strategies Crypto Renegade teaches.
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If you want to learn more about the methods and tools that can be used to find Great Crypto Projects, then be sure to check out Crypto Renegade’s strategy for How To Find The Best Cryptocurrency.
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Remember to always do your own Crypto Due Diligence before investing. Do you have any questions about it? Be sure to leave a comment below.