Thursday, February 22, 2024


> Hi, when approaching the crypto market, it is extremely important to distinguish projects that are worth investing in and those that are not. The crypto market always has good projects for us to invest in and make profits, but finding a good project is not easy! In addition, to preserve capital, we must **AVOID** projects that are ‘fake’, projects that are no longer good, not a good time to buy, so what characteristics of a project are no longer available? attractive to let in to buy? Let’s find out together under this article ## **I/ Distinguish and understand some basic investment methods** Why did I mention this at the beginning of the article? Because in this article some may be bad for investment but may not be bad for speculation. People can join crypto for investment purposes, speculative surfing, or a combination of both. However, for ***newbies* **starting, it is advisable to allocate only a small percentage of assets such as ***5-10%***, and only focus on crypto projects that have already been established. confirmed value through capitalization and liquidity. The tip here is to start getting involved with cryptos in the top 10***. Or you can choose a simpler solution, which is a long-term crypto investment. If this way of playing, you only need to choose a few major cryptos after researching, then gradually accumulate according to the specific DCA method and with BTC, ETH ## **II/ Signs of a projects should not invest** Here are some signs of a project should not be invested. I can’t be 100% sure which coin is good or which is bad. But I can suggest some signs, if any, we should not rush to invest and need to consider and evaluate carefully! **1/ Lack of information or not transparent information** We will check the background of the project team, if they are public, check if their background is reputable or not? If they just say vague or unclear, then be careful. Also regarding devs, let’s keep an eye on social media exchanges. If the project has nothing to hide and will always be frank with investors or admit its mistakes, that is a positive sign. Conversely, if there are questions that the project avoids or deletes comments, it is very likely that the project has something shady. **2/ The market capitalization is too large, the list of exchanges is too “pricey”** This is one of the main reasons why I will not invest. Overpriced means its capitalization is too high compared to the actual value of the project. For example, ICP’s floor cap list is 40 billion for a layer 1 nothing outstanding, the ecosystem is still in its stub, but the list price is 40 billion, so buying only has a loss. Or the “King of Web3” Bico once went up to $ 40 and now it only costs $ 0.23, so BICO is similar to ICP list floor with too high marketcap. To avoid this situation, we need to know how to price that project and consider more aspects such as time, competitors in the same industry, … to see if the project is “pricey” or not. Are not? How to price a project, I have already written an article, you can read it again here: ( **3/ Teams, VCs bought too many tokens in previous rounds and bought them at too low prices** Funds and teams in fundraising rounds Before buying tokens at a low price, if we invest in the long term, it will be very disadvantageous because over time the amount of tokens unlocked for those funds will surely be released at the best possible price. Funds, large teams that are rated as good as a16z, hashed, multicoin, … they are basically like us, investing to bring in profits! Therefore, do not expect that funds that buy a lot, buy a good price, will also help us make a profit. Funds, investment teams **ONLY** help the project to a certain stage and take profits. **4/ The project in the segment/industry is saturated and has no distinct competitive advantage** When it comes to “no competitive advantage” or “no difference” in the context of crypto projects , which means that the project has no special factors, advantages or unique technology compared to competitors in the same field. This leads to no element to attract cash flow, attract investors and interest of the market. And it will be even more true when the project works in an area that too many projects have already done, for example the LSD-LSDfi array, projects like FRAX, RPL, … are improving their products continuously if they want to attract cash flow, attract market share of LDO. This doesn’t mean that projects that don’t make a difference are worthless, they won’t succeed and the token price curve is likely to be bad. **5/ Most of the money is only used for PR, aggressive advertising.** If a project spends most of its revenue on PR and self-promotion instead of investing in product development, relationship building partnership with other companies, investment funds or hire new resources to support its growth, the project is most likely going **Wrong** direction and that is a warning sign. clearly communicated to investors. For example Near, I see some recent trends like AI, … Near also “sucks fame”, Near advertises anything Near has but in fact Near doesn’t do anything **6/ Thanh low balance** Liquidity shows that the project’s token has many buyers and sellers, is anyone interested? Ask the question: “It’s easy to buy now, but is it easy to sell when it comes time?” If a project has low liquidity, it is one of the signs that we should do more research on that project. There are many articles in the group about checking the liquidity of the project, everyone can read it again. ( **7/ Chart floating or pumped dump many times** Most of the projects on the crypto market will go through the following process to raise capital ➜ list of pump dump exchanges ➜ if there is retail fomo set expectations ➜ collect the pump dump for the 2nd, 3rd time ➜ float the chart ➜ make a new project Investing in an old project, a project that has pumped many times, the possibility of peak swing will be higher. Because, in the old project, there were many people swinging to the top and no one was foolish enough to push the price up for the old swingers to return to the shore. This is why Mr. Ryan said to just focus on the new project and play. However, old projects are sometimes not uninvestable * (if everyone supports, I will write a later article, how to invest in an old project)* **8/ Cake drawing, unrealistic ** A One of the suspicious signs of a crypto project is when its product or application lacks real value. If the project doesn’t meet a real need or makes a significant contribution in an area, the chances of that project’s success can be dimmed. Because if the project’s product is not realistic, then its price line comes mainly from the token pump dump, not long-term investment. We all know that coin spikes are of course driven, by price manipulation. But they all must have a very reasonable “excuse” or a motivation for the price increase to be more favorable. Therefore, even if there is a drawing cake, it must be at a reasonable level to push the price. **9/ Promising ridiculously high returns** When investing in crypto or any financial market, I always keep in mind 2 things: “If the opportunity is so good, then no. your turn” and “Nothing is free”. If everyone participates in investing in a project like staking that pays a huge APR interest, it is likely a scam. Always wonder where the project gets the money to be able to pay such high interest?? **10/ The project is having bad news** If there is negative news about the project, it is best that everything is settled and then consider investing. Especially projects or related things that involve legal matters must be extremely careful. Currently, crypto has just begun to form laws to control it, so when there is news about breaking the law, it will be affected quite heavily. The most recent example is the case of the SEC suing Binance or the CEO of Multichain in relation to Chinese law. However, it is necessary to take a close look at that news because the “mouth FUD, buy hand” trick is not uncommon in this market! **11/ No community support or poor quality community** If the project does not receive interest or support from the crypto community or does not have a positive evaluation from independent experts , it could be a sign that the project is not appreciated. Because the community of the project is very important, the most typical of the important are the coin meme projects, which rely entirely on the token pump dump and the community’s trust. Another little tip is to evaluate the community of the project to add 1 factor whether to invest in that project or not, which is: ***Find out what country the community comes from.*** For example, community Europe, North America are active communities, while toxic, short-term communities often come from Vietnam, Southeast Asia, … each community from different regions will have different characteristics. Although I don’t want to say it, actually when I check the community or the number of people holding the project coin, most of which are from Vietnam, I would like to say bye bye. How to check where the community comes from: Check the IP source, the traffic comes from which area to evaluate (specifically which website checks this, everyone Google it, a lot) **CONCLUSION :** With crypto, investing, speculating, or a combination of both is different for each person. From there, there will be different ways to do it. There are people who know the project is risky but still participate because they hope that they will withdraw at the right time. However, there are also people who are careful with new coins when the trust level is not high, but later turn out to miss a huge opportunity because the coin is really valuable and well developed. The most important thing when participating in crypto is that each person needs to determine what their expectations are? Short-term or long-term expectations? Ask yourself what your risk tolerance is. That is, in the case of a total loss, what level is acceptable. The influence of information on social networks is very great, so it is necessary to know how to filter information, to know how to do the comparison check yourself. It is no coincidence that in crypto there is a phrase “**Hidden Gems**” which means that people liken finding valuable coins like finding gems and of course something rare is ***NOT easy*** found both!

Source: Collector



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