What should be analyzed before acquiring altcoin?
Before buying an altcoin, it is essential to conduct a careful analysis to minimize risks. Here are the main points to check:
1. Purpose and utility:
Check if the altcoin has a clear purpose (e.g., smart contracts, privacy, scalability) and if it solves a real problem.
2. Team and partnerships:
Research who is behind the project. An experienced and transparent team with a reliable track record is a good sign. Strategic partnerships also increase credibility.
3. Whitepaper and roadmap:
Read the whitepaper to understand the technical and economic proposal. Check if the roadmap (development plan) is being followed.
4. Supply and tokenomics:
Analyze the total supply, the circulating supply, and the distribution model. Poorly designed tokenomics can lead to inflation or dumping.
5. Liquidity and trading volume:
Ensure that there is enough volume in the main markets to facilitate entry and exit from the position without significant fluctuations.
