Ready for More? Keeping up with Coins and Tokens
Let’s face it: Bitcoin and Ethereum, along with the top 10 digital currencies, command much of the traders and coin media’s attention. News sites provide a day by day, sometimes hour by hour account of the rise and fall of BTC and the explosion of DeFi (Decentralized Finance) primarily led by Ethereum.
With traders holding BTC (and most are holding), the price of BTC at a high, and gas for Ethereum still causing transaction pains, what’s a coin enthusiast to do?
Here’s a little secret that everyone knows: there are droves of additional coins and tokens in the crypto universe and more coming online each week. The continuing move toward mainstreaming digital currencies, these coins can help diversify a crypto portfolio and keep you engaged in the cryptocurrency universe.
“There are hundreds of different altcoins with various degrees of individualization and value (or lack thereof) — it’s truly a fascinating ecosystem,” writes Jeff Remsburg, Contributing Editor for Investor Place. “They can be gimmicky “me too” products which are just trying to capitalize on investor interest in the space, or they can provide a unique twist on the crypto/blockchain/financial world that makes them truly unique and valuable.”
OK. Ready to get started exploring alternative coins to the biggies? Where do you start? Probably by doing a little research, just like you did when you got started in digital currencies. With hundreds of crypto resources online, you could spend hours researching coin performance, coin launches, and market activity. That may not be the best use of your time, or you may not even have that kind of time to devote to researching new coins. If so, you may want to take a page out of the traditional stock investor’s game plan to expedite the process: methodical research.
“Researching a stock is a lot like shopping for a car,” said Dayana Yochim in a recent Nerd Wallet post. “You can base a decision solely on technical specs, but it’s also important to consider how the ride feels on the road, the manufacturer’s reputation and whether the color of the interior will camouflage dog hair.”
Yochim lays out four simple steps to conducting due diligence: 1) Gather research materials, 2) Narrow your focus, 3) Turn to qualitative research, and 4) Put your research into context.
Researching coins and tokens has gotten a lot easier in the past few years as the interest in digital currencies has surged. In the Medium.com article “The (Biggest) Ultimate 2020 Cryptocurrency Resource List (200+ Resources!),” Gemma B. offers a comprehensive guide to News Sites, Forums, Blogs, News Aggregators, Price Trackers, Podcasts, and more that offer different information and opinions on altcoins and tokens.
Gather Research Materials. It’s always a good idea to start with some of the more popular and established sites like Coindesk.com. Started in 2013, the site’s mandate is “to inform, educate, and connect the global investment community through news, data, events, and education.”
You may already use CoinDesk for news: check out its CoinDesk 20 which provides information on the core group of 20 digital coins that “constitute roughly 99% of the market by volume…”. Much like the U.S. Dow Industrial financial average, CoinDesk 20 provides a real-time snapshot of digital market activity.
Other sites providing solid research include Brave New Coin, CoinCodeCap and TradingView.
Narrow Your Focus. If a coin has caught your eye, try doing a quick scan to see what the market is saying about the digital asset. Sites like CoinTelegraph, Bitcoin Magazine, Investor Place, Forbes, and Medium provide comprehensive analysis of what’s happening in cryptocurrencies on a regular basis. Plus forums including Reddit Cryptocurrency and thecryptoupdates let other traders chime in on what’s happening in the digital landscape.
Turn to Qualitative Research. By now, based on what you’ve seen and heard, you may have focused on one or a few coins that interest you. This is the time to do a deep dive into the offerings. Look at sites such as Brave New Coin, coinmarketcap, and Coingecko for the fundamentals of the coins (price, volume, market cap). Check out Coingecko’s easy to follow analysis which provides Trending Search, Most Voted Coins, and Positive Sentiment.
If you’re interested in what’s really new in coin offerings, try Coin Market Calendar, which lists the dates for new coin launches and also organizes events as Trending, Significant, Hot and Controversial.
Put your research into context. Now that you’ve done your research, it’s time to make decisions. Like most investors, the choices are usually made based on personal interest, portfolio balance, and what resources you have available to invest.
Like most investors, eventually you’ll create your own personal compendium of sources that provide information that meets your needs. The possibilities are endless and exciting as the world wakes up to the value of the digital coin world.
Joyce Pavia Hanson