Crypto asset is the other name for crypto currency. You can buy and sell these assets. Some of the popular crypto assets are non-fungible tokens, bit coin, Ethereum, etc. In this article, I give you tips to choose the right crypto assets.
Before I help you in choosing a crypto asset, you should first understand what a crypto asset is.
What is a crypto asset?
The crypto assets are digital assets. However, not all the digital assets are crypto assets. The crypto assets depend on the distributed ledger technology and therefore are completely safe. The three main uses of crypto assets are access to goods and service, means of exchange of goods and services and also an investment.
A very good example of a crypto asset is Bit coin. The crypto currency is an asset. However, not all the crypto currencies are crypto assets.
Market capitalization
Before you choose a crypto asset, arrange them in the order of market capitalization. For that you should first understand what Market capitalizationis.
Market capitalization is the total dollar value of an asset in the market. You shall determine the size of a company based on this. To calculate the market capitalisation of a company or a crypto asset, you should multiply the value of its one share by the total number of its outstanding shares.
The crypto assets are divided into large cap, mid cap and small cap based on their value in the market. The companies whose value is more than 10 billion USD, they are called large cap. The companies whose value is between 2 billion USD and 10 billion USD, they are called mid-cap. The companies whose values are between 2 billion USD and 300 billion USD are called small cap.
Always choose the crypto assets with high market capitalization.
Total coins mines
Check if the crypto company is to limit its currency supply. Also, consider the company’s currency under supply. That is, the number of crypto coins under circulation.
The demand for the crypto currency of the company should be increasing day by day. If a company limits its currency supply when its demand is high, the prices of its assets increase exponentially. Therefore, you should check on the overall supply of the crypto asset before buying it.
White paper
Every crypto asset has a white paper. This paper mentions all the details about the crypto currency such as purpose of its creation, technology used, problems it will solve, etc. The white paper also has the vision of the creator. Read this white paper before choosing a crypto asset. Invest in the asset that seems realistic.
For a certain time period, observe if the company is abiding to the goals it mentioned on the white paper.
Use cases
The use case is one of the most important factors to consider while choosing a crypto asset. Some of the popular use cases of a crypto asset are gaming, web browsing, finance, advertising, supply chain management and identify management. The other use cases are smart contracts, Internet of Things, money transfer, etc.
Hope my article on choosing the right crypto asset was helpful!