I joined the market pre-bull run in 2017. From May 2017 to January 2018, I could have closed my eyes and bet on any altcoin and made 5x-10x without much to worry. Crypto Twitter was abuzz with lambos, moons, and nerds taking exotic holidays in villas. This was the fervor of the season.
A wave of new investors, traders, quick rich schemers joined the crypto bandwagon as Bitcoin started to dart to $5000, $10000, $15000 and $19000 in what seemed like no time, literally.
There was disbelief and we tried to justify why Bitcoin should go to $25,000 and followed McAfee who claimed an obscene amount of money for one Bitcoin was still worth it. Many people saw their portfolios grow and every crypto project claimed a pie of that huge market. Influencers, in particular, would tweet insane-sounding targets and claims. People thought these coins or projects would be game-changing. Many teams seem to have “gone cold” in the winter.
As the bear market that set in 2018 continued till April 2019 and has arguably come to an end, saw many of these projects deliver nothing since there was no capital / liquidity / steam in the market.
All the altcoins have lost 70-95% of their value in the last year. But investors who thought of holding tokens for a “long term”, which is a few years in crypto, got burnt because the teams just stopped working on their code. Now that the possibility of another money-making session is on the horizon, some of these projects have come out of their hibernation.
Before the next bull run starts, I have decided not to invest / trade in any coin that has a fly-by-night attitude and an unstable team. These projects are just here to make the money, not to make a product that will help the crypto market gain credibility that it so desperately needs with usable products.
So how to identify such projects to avoid them? Here are a few pointers:
Do not look at the price
Every altcoin chart looks the same currently – whether the coin is dead or alive. If we make decisions just based on price, we may suffer the kind of losses that investors of $OCN suffered
Look for the team
Many coins that I investigated during the bull run had a ghost team. A coin like $SNTR (Silent Notary) that gave a huge gain, upon investigation, turned out to be scams because most of the developers listed on their team did not have any social media presence. Some of them were on Linkedin but denied working for the company. They even outsourced their website design. Look for the team (and team size matters too) with a cynical mind. This is a huge perspective about what the company intends to do
Check their Medium/blog. See their updates and releases every week. If they stopped or got lazy during the bear market, it is a big red flag. One coin that I loved and have been following since before the bull run is Siacoin. The team did not much care about the bull or the bear market. Their communication has been consistent and I do not worry if the team will be sipping cocktails with my money this weekend
Roadmap vs. delivery
This is hard to measure since most crypto projects are delayed on their roadmap if they even have one. But if you are interested in a project, the biggest measure of their success is if they can deliver good code consistently. Does their roadmap align with their business goals? Do they consistently deliver on their roadmap? It is time-consuming and seems technical but it takes a few hours every week to check up on the coins that I am invested in.
This bull market, I am keeping away from most “influencers”. I have recently seen someone shill $SNTR when I know for a fact that it is a scam coin. I do not mind if traders shill coins for chart-based or trend-based gains but when many influencers shill one coin coincidently in the same timeframe, I stay away from that coin
This is not to say that every project out there is a scam. But there are plenty and if you have been investing/trading in crypto, you know we all have burnt our hands. This bull run, it may seem that we miss out on opportunities, but it is better to invest in companies/projects we have investigated and trust.
Let us know what interests you the most by leaving a comment below!
Cover Image by Thomas H. from Pixabay