As a newbie who wants to start investing in crypto, you have to do your due diligence and be sure you're making the right choices.
Crypto is more than just hype, charts and profits; there are a few things you’ll want to check before putting your money into any token.
Here are the features to lookout for so you can make the smartest, safest decisions in the world of crypto to avoid the pitfalls.
Market Cap Basics
Coin with a low market cap may look like it has tons of room for growth, but low market caps can also mean high risk, since these coins are easier for big players to manipulate.
As a general rule, look for a market cap of at least $50 million. Higher market caps tend to be safer, though they’ll have less explosive gains. It’s about finding the balance.
Circulating Supply and Total Supply
Ever wonder why some coins are fractions of a penny, while others are hundreds of dollars? A big part of that is how many coins are in circulation. Most tokens have a huge supply, like billions or even trillions.
The problem? More supply usually means lower value unless there’s serious demand. If the supply is too big and there’s no way to limit it (like a burn mechanism), the coin’s value will probably struggle long-term.
Liquidity and Trading Volume
High trading volume means you’re more likely to sell without running into issues, which is important when you’re investing in risky assets like crypto.
Look for a daily trading volume over $1 million, that’s a good sign people are actively trading and you’ll be able to cash out if you need to.
Community and Social Media Presence
With memecoins, community is everything. A strong, engaged community means there’s demand and interest, which can drive up value.
Check out Twitter, Discord or Reddit, are people excited about the coin? Is there a real following or is it just a few people hyping it up?
A good rule of thumb is to look for genuine engagement, not just a big follower count. Numbers don’t mean much if there’s no actual interest behind them.
Developer Activity and Roadmap
Developer activity is rare with memecoins, but it’s a huge plus if you find it. If a team is consistently improving and adding features, the coin is more likely to have staying power.
Some memecoins are evolving to include things like staking, NFTs or DeFi features. These add value beyond hype and make the coin more sustainable.
If you can, look into a project’s roadmap. Does it seem like they’re planning for the long haul, or is it a “get rich quick” type of deal?
Security and Audits
Security is a big deal, especially with new coins. If a coin you’re interested in has been audited, that’s a good sign.
No audit? That’s a red flag. Audits reduce the chances of rug pulls or hacking, which is something you definitely want to avoid as a new investor.
Token Distribution and Whale Concentration
If a small group of people own most of the supply, it’s easier for them to manipulate the price, it will be easy to create big price swings.
Ideally, no single holder should have more than a small percentage of the total supply. This keeps the market fairer and more stable.
Memecoins can be a fun part of your crypto portfolio, but they’re not without risks. Take your time and do your research.
It’s easy to get caught up in the hype, but real gains come from informed decisions.
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