Following qualitative steps can be used to determine a project's long term potential.
a) Team and Leadership
A good team with a great leader is what it takes to make a project successful. You invest in people! If people working on the project aren’t experienced enough and credible, things will never work! No vision can be translated into the reality without having a great team on place.
What qualities to look for in a team
a) Size of the team – The bigger the better
b) Diversity (background) – More diverse more better (they are likely to have more knowledge about the diverse market segments)
c) Experience & Education- Each member’s previous work experiences and Education (LinkedIn crosschecks -MUST)
d) Project leader's experiences, achievements & credibility.
b) Mission and Vision
The second most important thing to consider is ‘what is the team is trying to achieve?’ and ‘how they are going to achieve?’. You need to carefully analyse whether the plan is achievable within the given timeframe.
One thing I want you to carefully consider is - whether the problem they are trying to fix is an actual problem today? For instance: some people will come up and blunder about making Amazon on blockchain and blah blah...The question is, do we need Amazon in blockchain? How's dispute between buyers and sellers going to be resolved without the involvement of a third party and on and on. So you have to consider whether the problem they are trying to solve is an actual problem. Many ideas look very attractive on paper, what we need is whether they will be mass adopted upon successful implementation.
c) Type of the project
What kind of project they are trying to develop? Is it an infrastructure project, or a DApp, or interoperability project or something else? My understanding is blockchain is still in an early phase and they need tremendous improvement to be adopted by the real world. Hence, infrastructure projects can be good investments at the moment. I am not very excited about DApps being built on Ethereum as they will have limited functionality due to Ethereum's inability to scale. The case would be different if they are planning to migrate to other better platforms later on.
Determining all these issues would help you to understand whether a project is just invented to grab some cash or they actually have some long-term visions.
d) Roadmap
How practical and realistic their roadmap looks, whether works being done according to the roadmap. How many developers working in the project. If you can't find accurate informations, ask them on telegram. If they refuse to give direct answers - AVOID!
e) Token Usage & Inflation
The most important factor to consider is how the token will be used within the platform. How many tokens is being held by the company and what is the structure of token inflation/deflation.
Remember, when you are buying tokens/coins, you aren't buying a part of their company. You are just buying utility tokens. Even if the project you are invested in becomes extremely successful, in cases of users being allowed to use other currencies like BTC, ETH, Fiat to use the platform, it is less likely that your token will appreciate in value.
Also, in terms of token inflation, token's value increase due to increase in demand. No point of investing in a project that releases 20% of its tokens every year.
f) Progress/Github
Whether they have done any work on implementing their vision. You should check their Github activity. Has there been regular updates and who are the people doing the development works. You should also consider that not all projects make their Github public. Any confusion? Hit the team. No satisfactory response? AVOID!
g) Social network activities, engagements with followers, & hype
How active are they on social media? Are they regularly helping their members when asked? Are they regularly updating their progress? Do they hold 'AMA - Ask Me Anything' sessions frequently?
Another thing to consider is hype. No matter how good an idea or a team may be, if they aren't able to build a reasonable amount of hype behind the project, it is less likely that they will succeed in this fiercely competitive marketplace.
h) Market Cap
It is very unlikely to achieve 100X if a project is already valued over $1 billion. Its because it already had its 100X. I recommend you to look for something below $100 million market cap. The lower the market cap, the higher the risk.
Again, no risk, no return.
i) Entry Point
It is extremely important to consider the appropriate entry point when buying a crypto. You don’t want to buy all-time-high and wait forever for your token to increase in value. Some technical-analysis knowledge could be beneficial to determine an appropriate entry point. I suggest below 60% of ATH as a reasonable entry point.
FOMO can ruin you. If a project is very promising but trading at ATH, you may want to wait sometimes for it to come down. If you are so worried about missing the boat, just make a partial purchase and wait for a dip to buy more. In this way you can minimise the risk.
j) Trust No-one
Believe no-one with your money. Do your research yourself and make decisions for yourself. In this way you can have more confidence on your investment and will be able to hold. No-one is perfect out there and most people shill a project with a motive. So say goodbye to your favourite YouTuber of Blogger's pick.
ABOUT ME:
I am a PhD researcher as well as a crypto enthusiast. I manage a Facebook group – ‘Crypto Traders’. Let’s get engaged:
https://www.facebook.com/groups/cryptotradersglobal
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GETTING STARTED?
Get $10 worth of free Bitcoin when you buy Bitcoin from Coinbase
Link: https://www.coinbase.com/join/57653fd8dfebd82caa0001ce
BUYING ALTCOINS/EXCHANGES
Binance is one of the most trusted altcoin exchanges as of now. Follow the link below to sign up to Binance
Link: https://www.binance.com/?ref=12520061
Kucoin is the best exchange to get your hands on new altcoins. Follow the link below to sign up to Kucoin
Link: https://www.kucoin.com/#/?r=81J161
Bibox is cool! They have some great Altcoins out there. Follow the link below to sign up
Link: https://www.bibox.com/login/register?id=11144131&lang=en
WALLETS
For the security of your cryptocurrencies, it is extremely important to have a hardware wallet. Ledger Nano S is what I use, and I recommend everyone to use it. Never leave a large amount of funds in an exchange.
Use the link below to order a Ledger Nano S for yourself.
Link: https://www.ledgerwallet.com/r/aa58
CONTRIBUTIONS
Feeling thankful for the gains you made? I’d welcome your contributions ;). It would help me to devote more time towards crypto gem research.
My Litecoin (LTC) Wallet: MKikka2dimFQGy974YeiWrtzdnTLX6BTWw
My Ethereum (ETH) Wallet: 0x94355Cb1529dF9A20A47FCe12b635b25D867d4ae
My Bitcoin (BTC) Wallet: 33xeMoNtK4vHB7XSn8hJ1EpCarf6kdf5fe
Disclaimer: Please note that I not offer any financial advice. I don’t call myself a market expert and I too make mistakes sometimes. Investing in cryptocurrencies comes with a lot of inherent risks hence, always be sure to conduct enough research before throwing in your hard earned money.