{"id":54371,"date":"2024-06-14T13:50:12","date_gmt":"2024-06-14T13:50:12","guid":{"rendered":"https:\/\/buycrypt.com\/blog\/how-to-choose-crypto-to-invest\/"},"modified":"2026-10-12T20:07:04","modified_gmt":"2026-10-12T20:07:04","slug":"how-to-choose-crypto-to-invest","status":"publish","type":"post","link":"https:\/\/buycrypt.com\/blog\/en\/how-to-choose-crypto-to-invest\/","title":{"rendered":"How to Choose a Crypto Project to Invest In: A Step-by-Step Check"},"content":{"rendered":"<p class=\"bcl-lead\">How do you choose a cryptocurrency to invest in when there are tens of thousands of coins, and every one of them has a decent-looking website and a promise for every occasion? In this lesson you&#039;ll take what you&#039;ve learned so far and turn it into a working checklist, starting with the basic &quot;why does this token even exist?&quot; and ending with how much of your portfolio you can put into it without risking financial ruin.<\/p>\n<div class=\"bcl-tldr\">\n<div class=\"bcl-box-h\"><svg class=\"bcl-ic\" viewBox=\"0 0 24 24\" aria-hidden=\"true\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.8\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M13 2 4 14h7l-1 8 9-12h-7l1-8z\"\/><\/svg>Key takeaways<\/div>\n<ul>\n<li>Start by asking whether the project solves a real problem and why it needs its own token.<\/li>\n<li>Look beyond market cap: check the fully diluted valuation and the unlock schedule too.<\/li>\n<li>Liquidity, audits and a transparent team weed out most of the dangerous projects.<\/li>\n<li>Even a good project can fall in price, so position size matters more than which coin you pick.<\/li>\n<\/ul>\n<\/div>\n<nav class=\"bcl-toc\" aria-label=\"Lesson contents\">\n<div class=\"bcl-box-h\"><svg class=\"bcl-ic\" viewBox=\"0 0 24 24\" aria-hidden=\"true\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.8\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M8 6h13M8 12h13M8 18h13M3 6h.01M3 12h.01M3 18h.01\"\/><\/svg>In this lesson<\/div>\n<ol>\n<li><a href=\"#bcl-s1\">Step one: what problem does the project solve<\/a><\/li>\n<li><a href=\"#bcl-s2\">Step two: tokenomics and unlocks<\/a><\/li>\n<li><a href=\"#bcl-s3\">Step three: team, money and security<\/a><\/li>\n<li><a href=\"#bcl-s4\">Step four: liquidity and market data<\/a><\/li>\n<li><a href=\"#bcl-s5\">Red flags: when you can stop checking<\/a><\/li>\n<li><a href=\"#bcl-s6\">Step five: how much to invest<\/a><\/li>\n<\/ol>\n<\/nav>\n<h2 id=\"bcl-s1\">Step one: what problem does the project solve<\/h2>\n<p>Start with a question that sounds simple but weeds out most candidates right away: what does the project do, and who needs it? If you&#039;ve read the website and still can&#039;t explain it in one sentence of your own, that&#039;s already a bad sign. Projects that talk about a &quot;revolution,&quot; an &quot;ecosystem&quot; and &quot;the future of finance&quot; without anything concrete are usually just selling a token. Empty buzzwords are a handy way to hide the fact that there&#039;s no product.<\/p>\n<p>Next, figure out why the project needs its own token. A good answer: you pay network fees with it, it&#039;s staked to secure the network, or the product simply doesn&#039;t work without it. If the token exists so you can &quot;take part in the ecosystem&#039;s growth,&quot; that&#039;s a bad sign. And if the product would work just as well with USDT or ETH, there may be no demand for the token beyond speculation.<\/p>\n<p>The third question is whether there&#039;s a product today. A working service with real users and on-chain data counts for far more than any three-year roadmap. <a href=\"https:\/\/buycrypt.com\/blog\/en\/how-to-evaluate-crypto-project\/\">Reading a whitepaper and checking the team<\/a> are covered in detail in a separate lesson; here we pull everything together into a single framework.<\/p>\n<div class=\"bcl-note bcl-note-tip\"><span class=\"bcl-note-i\"><svg class=\"bcl-ic\" viewBox=\"0 0 24 24\" aria-hidden=\"true\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.8\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M9 18h6M10 21h4M12 3a6 6 0 0 0-3.6 10.8c.6.5 1 1.2 1.1 2V16h5v-.2c.1-.8.5-1.5 1.1-2A6 6 0 0 0 12 3z\"\/><\/svg><\/span><\/p>\n<div>\n<div class=\"bcl-note-k\">Tip \u00b7 The one-sentence test<\/div>\n<p>Try to finish this sentence: &quot;This project lets \u2026 do \u2026, and the token is needed for \u2026.&quot; If you can&#039;t do it without fluff, set the project aside.<\/p>\n<\/div>\n<\/div>\n<h2 id=\"bcl-s2\">Step two: tokenomics and unlocks<\/h2>\n<p>Tokenomics is the set of rules for how tokens are issued and distributed. Start with three numbers: how many tokens are in circulation now, how many there will be in total, and how they&#039;re split between the team, investors, the project&#039;s treasury and the community. You&#039;ll usually find this in the project&#039;s documentation and on aggregators like CoinGecko and CoinMarketCap.<\/p>\n<p>Compare the market cap with the FDV, or fully diluted valuation. Market cap is based on the tokens in circulation, while FDV counts every token that will ever exist. If FDV is several times higher than market cap, a wave of new supply is on the way, and every one of those tokens will weigh on the price.<\/p>\n<p>Pay special attention to the unlock schedule. The team and early investors often got their tokens far below market price, so an unlock gives them a strong reason to sell. Dates of big unlocks are known in advance, so check them before you buy. Sometimes it&#039;s the other way around: almost all the tokens are already in circulation, and there&#039;s very little pressure from new supply. That doesn&#039;t make the project good, but it does take one risk off the table.<\/p>\n<div class=\"bcl-note bcl-note-term\"><span class=\"bcl-note-i\"><svg class=\"bcl-ic\" viewBox=\"0 0 24 24\" aria-hidden=\"true\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.8\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M4 4.5A2.5 2.5 0 0 1 6.5 2H20v17H6.5A2.5 2.5 0 0 0 4 21.5v-17z\"\/><path d=\"M4 19.5A2.5 2.5 0 0 1 6.5 17H20\"\/><\/svg><\/span><\/p>\n<div>\n<div class=\"bcl-note-k\">Term \u00b7 FDV<\/div>\n<p>Fully diluted valuation: the current price multiplied by the maximum number of tokens. It shows what the project would be worth if every token were in circulation at today&#039;s price.<\/p>\n<\/div>\n<\/div>\n<h2 id=\"bcl-s3\">Step three: team, money and security<\/h2>\n<p>Look at who&#039;s behind the project. A public team with a track record you can verify deserves more trust. Full anonymity calls for extra caution, but it isn&#039;t a deal-breaker on its own: bitcoin was created by an anonymous founder too. What matters more is what the team has done before and whether it&#039;s tied to projects that failed. Check the members&#039; professional profiles, their talks and, if the project publishes its code, their public repositories.<\/p>\n<p>Find out who invested in the project and on what terms. Big-name funds don&#039;t guarantee success, but they don&#039;t invest completely blind either. Just keep in mind that funds bought in cheaper and may sell before you do.<\/p>\n<p>If the project runs on smart contracts, check the security audit: who did it and when, and whether the vulnerabilities they found were fixed. An audit lowers the risk of a hack but doesn&#039;t eliminate it. Also check who can change the contract code: if one team can rewrite the rules whenever it likes, that&#039;s a risk for holders.<\/p>\n<h2 id=\"bcl-s4\">Step four: liquidity and market data<\/h2>\n<p>Even a great project turns into a trap if there&#039;s nowhere to sell its token. Look at the daily trading volume and the list of exchanges where the coin trades. If almost all the volume goes through one little-known exchange and the order book is thin, getting out of a large position will be expensive. Also watch how the price reacts to mid-sized trades: if a small sell order knocks it down several percent, the market is very thin.<\/p>\n<p>Compare the project&#039;s market cap with competitors in the same niche. If a newcomer is valued higher than the leaders, even though they have more users and more revenue, the market is pricing in too much hope. We explain <a href=\"https:\/\/buycrypt.com\/blog\/en\/crypto-market-cap-trading-volume\/\">how to read market cap and volumes<\/a> in detail in a separate lesson in the analysis level.<\/p>\n<p>For projects with real activity, on-chain data is useful: the number of active addresses, the value locked in the protocol, the fees users pay. If these numbers are growing, the product is alive and not just something to speculate on.<\/p>\n<ol class=\"bcl-list\">\n<li>Spell out what the project does and why it needs a token.<\/li>\n<li>Check the circulating supply, FDV and unlock schedule.<\/li>\n<li>Look into the team, the investors and the smart contract audit.<\/li>\n<li>Assess trading volume, the list of exchanges and order book depth.<\/li>\n<li>Compare the valuation with competitors and look at on-chain activity.<\/li>\n<li>Run through the red flags of scam projects.<\/li>\n<li>Decide what share of your portfolio you&#039;re prepared to lose on this project.<\/li>\n<\/ol>\n<h2 id=\"bcl-s5\">Red flags: when you can stop checking<\/h2>\n<p>Some signs are so bad that there&#039;s no point checking the project any further. We go through <a href=\"https:\/\/buycrypt.com\/blog\/en\/how-to-spot-crypto-scams\/\">the signs of scam projects<\/a> in detail in a separate lesson; here are the ones you&#039;ll run into most often when picking a coin to buy.<\/p>\n<p>The biggest one is a promise of returns. If a project or its promoters guarantee that the price will go up or promise a fixed yield, it&#039;s either a scam or a sign they don&#039;t understand how markets work. No honest project can promise what its token will be worth.<\/p>\n<p>The second is artificial urgency: &quot;only 24 hours left,&quot; &quot;last chance to get in at a low price.&quot; The people rushing you are the ones who don&#039;t want you to have time to check everything. A good project won&#039;t disappear in a day, and a bad one is better skipped anyway.<\/p>\n<ul class=\"bcl-list\">\n<li>Guaranteed profit or &quot;passive income&quot; with no explanation of where it comes from.<\/li>\n<li>A large share of tokens held by the team and a few wallets with no lockup.<\/li>\n<li>You can&#039;t sell the token, or selling is restricted by the contract&#039;s terms.<\/li>\n<li>Aggressive promotion by influencers without disclosing that it&#039;s paid.<\/li>\n<li>A copy of someone else&#039;s website or whitepaper with the names swapped out.<\/li>\n<\/ul>\n<h2 id=\"bcl-s6\">Step five: how much to invest<\/h2>\n<p>Even the most careful check doesn&#039;t guarantee the outcome. In a falling market, good projects get cheaper too, and competition, a hack or a regulator&#039;s decision can kill them. That&#039;s why how much you put in matters more than which coin you choose. Be ready, too, for the right call to show no results for months.<\/p>\n<p>A simple rule: your position in any single small project should be small enough that losing all of it wouldn&#039;t change your financial plans. The younger and riskier the project, the smaller the position. How to spread risk across assets is covered in <a href=\"https:\/\/buycrypt.com\/blog\/en\/crypto-portfolio-diversification\/\">the lesson on portfolio diversification<\/a>.<\/p>\n<p>Write down why you&#039;re buying and under what conditions you&#039;ll sell. For example: &quot;I&#039;ll sell if the product doesn&#039;t launch by the end of the year&quot; or &quot;if the team issues more tokens than it promised.&quot; This keeps you from holding a coin just because you can&#039;t bring yourself to take the loss. Every few months, go back to these notes and honestly compare them with what&#039;s actually happening to the project.<\/p>\n<div class=\"bcl-note bcl-note-warn\"><span class=\"bcl-note-i\"><svg class=\"bcl-ic\" viewBox=\"0 0 24 24\" aria-hidden=\"true\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.8\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M12 4 2.5 20h19L12 4z\"\/><path d=\"M12 10v4M12 17.2v.1\"\/><\/svg><\/span><\/p>\n<div>\n<div class=\"bcl-note-k\">Important \u00b7 This is not investment advice<\/div>\n<p>The framework in this lesson helps you weed out weak projects, but it doesn&#039;t tell you what to buy. Tax rules and whether a token is even available to you depend on your country, so check them yourself.<\/p>\n<\/div>\n<\/div>\n<div class=\"bcl-practice\">\n<div class=\"bcl-practice-task\"><span class=\"bcl-practice-i\"><svg class=\"bcl-ic\" viewBox=\"0 0 24 24\" aria-hidden=\"true\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.8\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><circle cx=\"12\" cy=\"12\" r=\"9\"\/><circle cx=\"12\" cy=\"12\" r=\"5\"\/><circle cx=\"12\" cy=\"12\" r=\"1.5\"\/><\/svg><\/span><\/p>\n<div>\n<div class=\"bcl-box-h\">Lesson task<\/div>\n<p>Take one coin from CoinGecko&#039;s top 100 and run it through all seven points of the checklist from this lesson, writing one line of answer for each. At the end, write your conclusion: does the coin pass or not, what&#039;s the main risk, and what share of your portfolio would you be prepared to lose on it. If you couldn&#039;t find data for a point, mark it as a risk instead of skipping it.<\/p>\n<\/div>\n<\/div>\n<div class=\"bcl-offer bcl-offer-sm\">\n<div class=\"bcl-offer-h\"><span class=\"bcl-offer-ic\"><svg class=\"bcl-ic\" viewBox=\"0 0 24 24\" aria-hidden=\"true\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.8\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M8 21h8M12 17v4M7 4h10v5a5 5 0 0 1-10 0V4z\"\/><path d=\"M7 6H4v1a3 3 0 0 0 3 3M17 6h3v1a3 3 0 0 1-3 3\"\/><\/svg><\/span><\/p>\n<div><small>Learn and earn<\/small><b>Free tournaments every day \u2014 your way to USDT prizes<\/b><\/div>\n<\/div>\n<p>Entry is free and you trade on a demo account, so you need no money of your own. Free tournaments pay out Tour Passes, and those get you into tournaments with USDT prizes. The best go further \u2014 to a $5,000 funded account.<\/p>\n<div class=\"bcl-offer-btns\"><a class=\"bcl-btn gold\" href=\"https:\/\/buycrypt.com\/tournaments\"><svg class=\"bcl-ic\" viewBox=\"0 0 24 24\" aria-hidden=\"true\" fill=\"none\" stroke=\"currentColor\" stroke-width=\"1.8\" stroke-linecap=\"round\" stroke-linejoin=\"round\"><path d=\"M8 21h8M12 17v4M7 4h10v5a5 5 0 0 1-10 0V4z\"\/><path d=\"M7 6H4v1a3 3 0 0 0 3 3M17 6h3v1a3 3 0 0 1-3 3\"\/><\/svg>Join for free<\/a><a class=\"bcl-btn ghost\" href=\"https:\/\/buycrypt.com\/tournaments-guide\">How tournaments work<\/a><\/div>\n<\/div>\n<\/div>\n<section class=\"bcl-faq\">\n<h2 id=\"bcl-faq\">FAQ<\/h2>\n<details>\n<summary>Can I find a coin that will go up 100x?<\/summary>\n<p>It has happened, but almost nobody spots those coins in advance, and for every one of them there are thousands that went to zero. Betting on a single &quot;moonshot&quot; token is closer to a lottery ticket than to investing.<\/p>\n<\/details>\n<details>\n<summary>What matters more: the team or the tokenomics?<\/summary>\n<p>Both. A strong team won&#039;t save investors if the tokenomics is built on endlessly issuing new tokens, and perfect tokenomics means nothing without a working product.<\/p>\n<\/details>\n<details>\n<summary>Where can I find data on token unlocks?<\/summary>\n<p>In the project&#039;s documentation and on aggregators that show unlock charts. But double-check the numbers across several sources: third-party services sometimes get things wrong or fall behind on updates.<\/p>\n<\/details>\n<details>\n<summary>Should I buy a coin right after it&#039;s listed on a major exchange?<\/summary>\n<p>In the first days after a listing, the price often swings up and down while early holders take their profits. If the project interests you, wait for trading to settle down and then assess it with the same framework.<\/p>\n<\/details>\n<\/section>\n","protected":false},"excerpt":{"rendered":"<p>How to choose a cryptocurrency to invest in: check the product, tokenomics, unlocks, team, liquidity and risks step by step, plus red flags and position size.<\/p>\n","protected":false},"author":1,"featured_media":54496,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"rank_math_title":"How to Choose a Cryptocurrency to Invest In: Checklist","rank_math_description":"How to choose a cryptocurrency to invest in: check the product, tokenomics, unlocks, team, liquidity and risks step by step, plus red flags and position size.","rank_math_focus_keyword":"how to choose a cryptocurrency to invest in","_forpost_external_id":"","_seorun_article_id":"","footnotes":""},"categories":[16352],"tags":[],"class_list":["post-54371","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-school","resize-featured-image"],"lang":"en","translations":{"en":54371,"ru":20056,"uk":54649},"pll_sync_post":[],"_links":{"self":[{"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/posts\/54371","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/comments?post=54371"}],"version-history":[{"count":2,"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/posts\/54371\/revisions"}],"predecessor-version":[{"id":54579,"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/posts\/54371\/revisions\/54579"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/media\/54496"}],"wp:attachment":[{"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/media?parent=54371"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/categories?post=54371"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buycrypt.com\/blog\/wp-json\/wp\/v2\/tags?post=54371"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}