Investors have filed into the cryptocurrency market this year, lead by DOGE. The currency, which started the year barely in the periphery, has surged in value by more than 4,000 percent, allowing first-time buyers to dip their feet in the market pool. But DOGE’s beacon has drawn out a dizzying selection of new tokens, leaving people spoilt for choice when looking for a new investment.
What should you watch out for when finding a new crypto investment?
New and veteran investors have thousands of currencies to choose from, with new ones emerging every day.
While many have taken a “meme” angle like DOGE, others may have a unique enough angle to give investors significant returns.
Choosing a currency is ultimately a personal choice, with everyone looking for something different, but there are some variables to keep in mind.
The intricacies of each currency will elude most people not well acquainted with the technology developers use.
Some currencies have multiple facets, providing both a token and service at the same time.
Mr Osborn explained: “Ethereum, for example, is not only a cryptocurrency; it is also a network which enables other developers to produce their own new cryptocurrencies.”
Rate of adoption
Some coins will attract the attention of seasoned investors as they debut, and Mr Osborn said this is a valuable metric for judging worthwhile investments.
He said: “When investors are quick to dive into a new crypto coin, this indicates that the investor community sees good value in the new coin, but also provides good liquidity for all investors to buy and sell quickly and easily.
“While this signals good potential significant future gains, it is no guarantee of profit, since there are several thousand cryptocurrencies in existence, and many have started life with a burst of excitement only to plummet back down to earth.”