Crypto Trading Fundamentals and Researching Guide for Beginners

• Crypto market is not regulated; hence, there are high chances of scams in it.
• Understanding crypto fundamentals will not only prevent you from getting scammed but will also help in earning high profits.

Cryptocurrency is no longer a buzzword.Nowadays, everyone knows about cryptocurrency very well. The popularity of crypto is increasing day by day as more and more advanced Web 3 technologies are emerging. Cryptocurrency is also advancing day by day, becoming not only fast but also secure. Due to the high volatility in the crypto market, many investors got attracted to it. This is the reason that the crypto market cap has increased to almost $1.24 Trillion.

Many investors have even earned super profits by investing in cryptocurrencies like Bitcoin and Ethereum. Today, Bitcoin alone has a market cap of $593,725,498,233. 

But the crypto market is vast. There are more than 26,000 cryptocurrencies which are listed on coinmarketcap. It becomes really hard for investors to choose from such a vast number of cryptocurrencies. Not only is the crypto market still not fully regulated, but crypto scams are also very common in the crypto market. There are many scam coins in the market that cannot be trusted at all. Investing in such a volatile market is not easy. So, we have compiled a list of fundamental rules and strategies that every investor should know before investing in cryptocurrencies to avoid scam and losses.

Crypto Trading Fundamentals

1. Understanding Tokenomics

Tokenomics is nothing but analysing the coin’s key characteristics, such as distribution, supply and utility. Understanding the tokenomics of a coin can provide various benefits, such as estimating the functionality of the cryptocurrency. In many cases, analysing the tokenomics allows for easy identification of red flags associated with a cryptocurrency.

While analysing the tokenomics of a coin, you need to carefully observe how the coin functions and how it will be able to generate high returns. There are many coins in the market which promise astonishing profits but do not provide clear information on how they will achieve such high profits. As an investor, it is crucial to identify these red flags.

2. Identifying Scam Coins

Scam Coins are a very common thing in the crypto world and many of them still exist in the market today.  Users should be aware of how to identify these scam coins. There are some tricks to identify scam coins, such as analysing the percentage of shares held by the top holders. If you observe that the top 10 shareholders hold 50% of the shares, it is better to stay away from that coin. This is because those top holders can pump and dump the coin, leading to potential losses of your valuable money.

How to do research about Cryptocurrency

How to research cryptocurrency: a step-by-step guide

1. Checking out Reddit and Telegram

Reddit and Telegram are platforms where in-depth conversations about cryptocurrencies take place.  You can join their official group as well as community groups, where people often share their perspectives about cryptocurrencies.  If the sentiment about a currency is negative among the people, there are high chances of it being a scam.

2. Checking Twitter Updates

It is always observed that low-value projects exaggerate a lot about themselves on Twitter. Identifying them is important.

3. Analysing Whitepaper

The key to identifying a legitimate  crypto is analysing its whitepaper. By analysing the white paper, you can understand the potential this project holds. For example, those who analysed the whitepaper of Bitcoin properly knew that it is a revolutionary  technology and that one day it will thrive.