The market capitalization of a coin/token is calculated by multiplying the circulating supply by the current price. According to the above calculation, the market capitalization may cause many investors to misunderstand the real value of the project. In theory, you issue a token with a supply of 10 million. If only one of those tokens were to trade for US$1, its market cap would be $10 million. Another caveat is that you can't determine how many coins/tokens there actually are. a project is being circulated on the market. They can be burned, locked, lost or forgotten in some way.
However, market capitalization is still widely used by many investors to assess the development potential of a project. Some people consider small cap coins/tokens to have more growth potential than large cap coins/tokens. But others believe that large-cap coins/tokens have strong technology, communities, etc. Therefore, they have a better chance of growth and less price volatility when the market corrects compared to peers. small-cap or undefined coin/token.
Technology is the foundation of every crypto project. Based on the development, the applicability of these technologies will help investors assess the future of that project. The technology information of a project, you can easily find in the whitepaper of that project. At the forefront of technology are projects to build and develop a new blockchain platform that helps to provide solutions to the problems that old blockchain platforms are facing such as processing speed, transaction fees, capacity. expansion… Those are the projects that background investors learn, evaluate and add to their portfolios.
Age and history are also factors that need to be considered and focused every time you want to invest in a project. Early and successful development projects have a large number of users and communities as well as are more widely applied in practice. Investing in coins / tokens with a history is usually quite safe, less risky as well as being scammed compared to new projects appearing on the market not long ago. With these projects, you will also be provided with a lot of data, tools on price charts, indicators, etc. to make it easier to make investment decisions.
When evaluating a project with the potential to grow and go far, we also need to pay a lot of attention to the development team of that project. Find out what the project's founder, team of programmers, marketers, advisors ... have done before, experience in the blockchain field, what companies have worked for... Based on the data In that case, we can partly assess the development ability and the ability to realize the goals set by the project. To update accurate information about the development team, you should visit the project's official website and whitepaper. With projects with anonymous development teams, you need to consider, learn the remaining factors and manage capital before deciding to invest.
The number of participants investing in the project relatively accurately reflects the growth potential of a coin. However, for coins/tokens that are overly concerned, do too much media activity, talk too much about your coin or project, you should consider carefully before investing. What good coins/tokens use to attract users and investors is technology and current achievements rather than promises of future growth.
The requirement for a potential coin/token is the applicability of that project in practice. If it can't be put into practice, in the long run, that project will lose value and be uninterested by users. Some of the current practical applications of blockchain projects, you can see such as providing solutions, tools, decentralized financial applications, NFT, online games, metaverse ...
Trends, future development roadmap is also a point that you need to learn to be able to evaluate the future of a project. Trends, development roadmap you can also find in the project's whitepaper. This information will help you visualize the future development of the project over time. The correct implementation of the proposed roadmap will be a plus point about the prestige and professionalism of the project.
Above are 7 ways to evaluate potential coins in 2022. There are many other ways to evaluate another project, but these are the most basic and easy to grasp for new investors. For the most accurate assessment, you should combine multiple evaluation methods together instead of using only one. Hopefully with the above information, you have gained more useful knowledge about evaluating a project, coin/token and can be more confident in your investment decisions.
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