Altcoins have been and still are a very popular topic within the crypto sphere. Bitcoin has the first mover advantage and also the biggest user base, but altcoins have one sure thing going for them and that is their ability to achieve progress. Since Bitcoin has a huge community, marketcap and hundreds of developers working on making it better it is very hard to implement new and riskier technologies. This doesn’t mean that every coin is a winner, investors have to do lengthy fundamental and technical research so they won’t be left holding the heavier bags. We though that we throw together a short guide for you that hopefully can help you with laying down the groundwork for your research methodology.

Fundamental research

What is the main idea behind the project?

You need to identify if the project is really solving a problem or just generating a problem that they can solve. Identify if the idea is unique and if they have competitors on the market. Read the whitepaper if you are able to understand it, if not, ask someone to help you if that’s a possibility.

Who is behind the project?

You have to look up the team that is backing the project and do research on the certain team members. Always make sure that the team members are really contributing the project and that there are no stolen identities. You can do so by finding them on Twitter, LinkedIn or any other social media platform.

If there are certain funds/VCs who invested in the project you can look up their complete digital asset portfolio and check the returns those project gave.

Distribution of the tokens

There is a certain trend currently that ICOs only offer a partial % of the whole coin count up for the pre-sale/sale and keep the rest for various purposes (marketing, promotions, partners, advisors, etc.). This in itself isn’t a problem, but check if the coins that are intended for the team are in circulation or if they maintain a lock down period on those. Also check for inflation and if there is any mining or staking on the chain.

Competition

Unique ideas are hard to find, but it’s not impossible. Check if there is competition for the project currently on the market, do a comparison between the projects and identify strengths and weaknesses. Compare market caps and growth potential. Always remember that different projects might have different market makers and it’s also very important to check the exchange liquidity of the projects in order to better identify the full potential.

Gather additional information

Using social media and webchats might come very handy with the crypto scene. Most projects own a telegram/discord/slack/reddit/bitcointalk channel where users speculate on the technology and the price as well. There is huge noise usually, but you have to identify useful information that you might not find elsewhere.

Check the news constantly and also watch the twitter cash tag (e.g. $BTC) of certain coins for leaked news or potential partnerships, but always do a background check on these information as well.

Always be critical

Don’t fall for moon and doom talks. Always set your own targets and base opinions on your own research. Another important lesson to learn is not to believe everything certain developers or fans state.

Technical research

Even though the post intended to be mostly about fundamental research we have to state here that Trade Analysis or TA is just as important as fundamental research. You have to be able to identify market cycles, bull trends, bear trends and basic patterns. Even if you are not an expert trader or investor, you can still do good by identifying a bull market and just supporting fundamentally strong projects.

There are a lot of good resources for learning if you just google it. Some examples: ChartSchool | Investopedia