Before investing in any crypto project, you should do your own research. DYOR. You’ve heard it before, and you’ll hear it again.
But what does ‘doing your own research’ actually entail? Where do you begin? Which sources do you trust? And how much research is enough?
Putting in the time and effort to understand your cryptocurrency investments is the no. 1 thing you can do to be a successful crypto trader. But it’s not always so straightforward. Here’s a guide that will help you throughout the research process.
Picking the right cryptocurrencies
The primary reason people do their own research in crypto is to choose the right cryptocurrencies to invest in. While we have created a simple & effective guide for how to evaluate a good crypto investment, this article will focus on how to carry out that research in the most efficient way possible.
But just to give you the bigger picture of your research efforts, when assessing a potential crypto investment, the key elements to consider are:
- The Utility & Use-case
- The Community
- The Team (developers, advisors, partners)
- Market Cap
- The Website & White Paper
- The Competition
- The Road Map & Vision
- Trading Volume & Liquidity
- Circulating Supply vs Total Supply
Without further ado, let’s dive into how to DYOR in crypto the right way.
Determining what is a trustworthy source of info
There’s no point in spending hours researching if your sources don’t know what they’re talking about. In crypto, everyone, including those with zero authority, seems to have an opinion, so it is important to be selective about who you listen to and who you take seriously.
Things to consider when evaluating a source:
- Are they well known in the industry? What does their track record say about them? (Examples of some reliable sources provided later on).
- How big a following do they have? If they have a solid following, chances are their info is more likely to be sound as they have a lot to lose for spreading bad info.
- Is the website you are reading a legit & established source? Sticking to the most popular news sites is a good way to make sure you are getting quality information, but even then, don’t believe EVERYTHING you read (ads are not reliable information)!
- Is the person you are listening to being paid? Never assume paid advice is honest advice. Many crypto personalities are sponsored by exchanges or have stakes in projects – look for people who are upfront & honest about their own bias & opinions.
- Is the person’s advice or opinion balanced? Do they give both sides of the story? Things are rarely black & white, and the best crypto sources will give both pros & cons about any given project.
Get different angles and opinions
Over time you will undoubtedly find some favourite Twitter/Youtube personalities. While finding someone you trust and resonate with is great, know that getting all your info from one source is a sure fire way to make some bad investment decisions. No one has ALL the information, and everyone is wrong from time to time.
DYOR is all about using a variety of sources and tools (news, social media, Youtube, community forums, mainstream media, etc.) to broaden your perspective. The more opinions and mediums you engage with, the more confident you will feel in coming to your own conclusion on a topic. Below we list some of the best places for traders of all levels to do their research.
The different ways to DYOR
- Coin Market Cap & Coin Gecko
Let’s pretend you just heard about a promising cryptocurrency. One of the best things to do before you start delving into news sites & subreddits, is to go to a website like CoinMarketCap or Coingecko to get a first impression of the project.
These sites are trustworthy and will show you at a glance what kind of investment you have on your hands. Check the market cap to see if it is a low, small or mid cap investment, and make sure there has been some decent recent trading volume – many coin’s have actually been dead for months.
Have a quick look at the charts to see how it has been performing recently. By having a quick look at the coin, you should get a rough idea of its risk-reward profile (anything below $10B market cap is fairly speculative). If it’s not the kind of investment you want to add to your portfolio, figuring this out early can save you a lot of time.
- Exploring Social Media platforms
Crypto info is extremely time sensitive, and social media is often the best place to start, especially for beginners. We’re going to dive into a few of the main platforms (Youtube, Twitter & Reddit being some of the most popular), but if you feel like you’ve already got a hang of how to use social media to research crypto, feel free to skip ahead.
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A big part of crypto is getting in before the herd, which is why Twitter is so useful. Often with YouTube videos, the news that comes out might lag a little behind due to the time it takes to film and edit videos. With Twitter, however, you can read announcements and the latest news from projects and exchanges in real-time. Given how time sensitive crypto information is, this is often the best way to get the low down first.
Whether it’s new coins to be listed on Coinbase (which usually results in a temporary spike in their value after this is announced), a big announcement from a project you are following, or even an earth-shaking tweet from the likes of Elon Musk, Twitter is where the action happens first.
However, Twitter is very similar to Reddit in that it’s full of people with opinions, many of whom are shilling and passionately promoting their own coins to increase hype around them. Look for Twitter accounts and tweets with a significant number of followers/likes.
A few tips for Twitter:
- Twitter is a great place to directly contact some of the names you follow and respect. It’s also super easy to search for new tweets on a coin you are interested in – just type the $ sign followed by the abbreviation of the coin (e.g $ADA)
- While it is good to follow the main players in the crypto space, as your journey progresses, we encourage you to follow some more niche accounts if you are in the market for those 100X low cap gems.
- If you want those juicy rumours that can lead to huge gains, you’ll have to do some digging and find some people who aren’t afraid to make big predictions. Again, check their following and reputation to decide how trustworthy they are.
Facebook groups are an excellent place for beginners. Crypto groups like Bitcoin / Crypto Beginners Guide for Aussies/NZrs are extremely useful if you’re an Aussie or Kiwi and want an active and supportive crypto community to be a part of.
This group is a great example of new and experienced crypto traders helping each other out to make the best trades possible. There is no shortage of crypto content out there, but having your individual questions attended to by real people can really fast-track the learning process!
While Facebook is not the no. 1 place to get information about projects and the markets, the community groups on there are some of the most active. Join some of the groups from your country and keep on the lookout for upcoming events near you!
Reddit is another big public forum for crypto. Talk to real people and have your questions answered in real time. While these public forums can be rife with people shilling the coins they already hold, the upvoting system of comments allow you to get some pretty helpful street knowledge on a project.
When evaluating a crypto for investment on Reddit, find out how active the community is in forums? How many followers on the coin’s sub-Reddit? Is the team helpful in sharing information about the project? Does the project team interact with the community? Does the team do AMAs (ask me anything) for the community? If the coin has some serious potential, there is usually a Reddit discussion happening around it. Unless you’re really really early to the party…
Despite the fact that YouTube is rife with affiliate marketers and unashamed click-bait titles, the video streaming platform remains a popular place for people to get their crypto fix. It’s also perfect for beginners who want things explained to them by a real person in a way they can understand.
While some veteran traders stay away from YouTube, there are plenty of great crypto channels that provide a unique and fairly time sensitive look into current projects, market movements and what to expect in the future. If there’s just been a huge spike or crash in the market, a quick YouTube search will provide a bunch of opinions on WHY that happened. Very useful if the market is in free-fall and you have no idea why. Here’s a list of some of the most popular crypto YouTube channels
Pro-tip: Want to consume content faster? There’s no rules against chucking your video on 1.5X or 2X speed if you can keep up!
Some guidelines for choosing YouTube content:
- Prioritise people with a decent number of subscribers, a good reputation and a reasonably high volume of videos – informed, reliable and time-sensitive information is key
- Choose those who seem to have a genuine curiosity and passion for crypto and the underlying technology
- Choose someone who you enjoy watching! A no brainer – crypto attracts all kinds of people and there’s bound to be one that’s right for you
One of the best things about YouTube is that some channels are highly personal & entertaining. And there is definitely something for everyone. Here’s a few personal favourites:
Coin Bureau – Extremely high quality and very researched content. Their team of analysts conduct regular coin, exchange and broker reviews. A trusted source of info.
The Crypto Lark – With a light-hearted demeanour, The Crypto Lark offers a good mix of insight and advice, helping users learn to trade cryptocurrency.
Ellio Trades – One of the fastest growing Crypto Youtubers out there. Ellio is an all-rounder but has a stronger focus on low-mid cap cryptocurrencies with high-risk-high-reward profiles, often making 10-100X predictions on low cap coins (which people seem to love).
Bitboy Crypto – One of the big players in the Youtube game. Claiming to be the largest crypto channel in all the interwebs, Bitboy Crypto knows what he’s talking about and is not afraid to make big claims and statements about important topics.
Tyler S – This guy has to be seen to be believed. With a strong focus on the Bitcoin charts, Tyler S brings a level of… let’s call it… weirdness… to your crypto sphere. Pairing a deep analysis of Bitcoin with some occasionally hilarious moments, this is crypto entertainment and education all wrapped in one.
While every YouTuber and pretty much everyone else in the crypto space (including us!) states at some point in their content that they are not financial advisors, they do end up offering a lot of very useful and actionable tips. Follow the right channels (and there are plenty of great ones out there) and you’ll have a much better understanding of how the market works.
Telegram / Discord
Want some highly active chat groups where people are diving deep into specific coins and niche crypto topics? The Telegram messaging platform is good when it comes to updates, community forums, trends and market sentiment analysis. Discord does something similar, and has a passionate crypto community.
Over time you will be able to see which crypto groups are legit and which are filled with fake followers and bots. However, it’s important to keep in mind that even legit groups can get very noisy and there are always people spreading highly speculative (or just false) information.
Tips for Telegram/Discord:
- Start by following the official channel and group of the coin you are interested in. For some other popular Telegram groups, click here.
- Be wary when people are too optimistic (on all platforms). If it’s all talk with no actual proof of concept or real product to try out, it may not be worth investing in.
- Good signs include groups that are active and have grown their followings without the use of affiliate marketing. If they have dedicated moderators, it’s even better.
- If you need to discuss sensitive information with a Telegram contact, select ‘New Secret Chat.’
As always, be vigilant of scams and ‘free giveaways’ that seem too good to be true. These are everywhere.
Crypto news outlets
Established news outlets are a great place to look to see if your prospective projects have made any headlines. Some of the most reputable news outlets include Coin Desk, Coin Telegraph, Bitcoin Magazine, NewsBTC and Crypto-News.net.
Reddit is also worth mentioning when it comes to news. Although it is not really a news outlet, it does congregate some of the best crypto news sources into one place, featuring many subreddits and communities where you can read and actively discuss a specific project or topic.
If there is another similar project that is better or more established, there may be no room for your prospective cryptocurrency to succeed. While several projects can all have success, even if they all provide similar functions, there is usually going to be a handful of industry leaders for any given utility, solution or sector in the ecosystem.
While there are many projects with good technology, being the first-to-market is a big advantage, and you should consider a crypto’s team, track record and history as many talk a big game with no actual product. When investing a project, assess the utility it brings to the ecosystem and see if there is truly a need for it and if it has what it takes to usurp its competitors.
Note: While picking the future leaders of each industry is a good strategy for long-term gains, many projects competing for a place in the market will see some serious pumpage during a bull run and there are profits to be made outside the most well-established projects in each sector.
The official website & white paper
Sussing a project’s official website is vital if you are thinking about investing. While it’s pretty easy to create a fairly convincing website these days, coins with genuine potential for the future will definitely have websites that work and are designed well.
Here’s two legit projects with great websites:
The website should also openly share information about the people behind the project. Poor websites, spelling errors and a lack of transparency around the team are all red flags of a shoddy investment or just an outright pump & dump scheme.
Additionally, a coin’s white paper should give a comprehensive explanation of the project. While white papers can be quite technical for the average investor (which they should be if they are legit), their main objective is to highlight the coin’s purpose, utility, future prospects and underlying technology, which all good projects will go into in detail.
Check trending topics and search volumes for certain coins & exchanges
Certainly an overlooked method in cryptocurrency research. When it comes to analysing market sentiment, having an idea of the number of people searching for a specific topic can shed light on what is currently trending and likely to go up in value in the future.
By using Google Trends, you can easily enter in the search terms you are interested in to see how they are trending in comparison to other terms.
Play around with some different search terms and see what is trending right now. People usually do a bit of Googling before they invest in a project. If there’s been a recent spike in interest for a crypto that has not yet seen a dramatic price rise, it could be an indication of things to come.
Research the developers
The developers are the people behind the scenes who are going to make things happen. Knowing a lot about the developers and advisors is a great way to see if a project truly has what it takes to be successful. Some questions to ask about the team are:
- Are the developers well-known or reputable?
- What is their track record with other projects?
- How responsive are the team to questions and queries?
- Is the team known publicly?
- Do they have an actual working product yet? When is that expected?
- Do they have the partnerships to back up their promises?
A lot of this research will take place through the official channels and website of a project, but you can use social media and other community forums to see if there is a deeper discussion around any given project.
Join a community & go to crypto meetups
We are strong believers in joining crypto communities. It’s a great way to broaden your research, get some good advice, meet like-minded people and stay informed on all the latest happenings in crypto.
It also is invaluable if you’re unsure about something and want a second opinion. By finding a good online or in-person community (there are some great ones in Australia!), you will undoubtedly have an advantage over other traders who are trying to conquer the world of crypto from their bedrooms. And who knows, you might meet someone you really like! (Marriage by smart contract!?)
Celebrity Tweets & Sentimental Analysis
Sentimental analysis can be very useful due to the speculative and erratic nature of the crypto markets. With sentimental analysis, you’re looking past the numbers to see what key players think and feel. This research often takes place through social media, public forums and news stories.
You will be focusing on particular journalists, influencers, investors, hedge fund managers and project developers in the space. Or Elon Musk. Well-known and trusted figures in the media can have a big influence on asset prices. But remember: evaluating the general sentiment and attitude towards a particular crypto (or the crypto space in general) is not a reflection of what is actually happening.
A coin could lose a lot of value because of a single tweet from Elon or Bill Gates, but that does not change the fact that the project’s tech is solid and they are still on track to achieve what they have set out in their road map. That being said, statements made by celebrities about crypto have proven to have a significant impact on the markets, so if you hear someone famous talking about crypto in the media, pay attention!
Technical Analysis (TA)
This type of analysis is for more advanced traders and is concerned with price and volume data. It looks at what is happening rather than why it happens and does not take into account every sentiment and variable that could influence its price (unlike a fundamental analysis).
TA is essentially the study of statistical trends, collected from historical price and volume data, in order to identify profitable trades. If you want to go deep into a project’s potential (especially for short term gains), TA is an avenue that can be extremely rewarding. Learning the basics of how to interpret candlestick charts and numerical figures will take a bit of time, but if you’re serious about crypto TA is an invaluable tool.
Other useful sources of information
While we won’t dive into every type of info source in crypto, here are a few more places you can look at to get a more holistic picture of a crypto investment.
Mainstream news outlets: Read a variety of news outlets – not just cryptocurrency-focused publications. Mainstream news outlets can give you an idea of what the no-coiners are thinking.
Newsletters: Signing up to some crypto newsletters and mailing lists is a great way to stay up to date with the most important news.
Podcasts: Long form crypto content is always a good thing. And there are plenty of crypto podcasts to choose from.
The charts: Always worthwhile. Learning how to read charts, trend lines and candlesticks will take your understanding of a project to the next level.
Whitepapers: While a little heavy on the technical aspects (which they often should be), taking a bit of time to look at the white paper is always worthwhile.
Trading view: A very popular social network of 15 million traders where you can follow your favourite assets, find trading ideas, chat with others, spot trends and place trades directly on their charts.
Market Cipher: A TA gem. A versatile indicator specifically designed for crypto. Especially useful for serious/day traders, this tool interprets market data and then spits out various symbols which will guide your trading.
A few handy tips for DYOR
Now that you have an idea of where to go and how to research, here’s a few crucial points to keep in mind throughout the research phase:
Don’t believe everything you read
Not all advice is created equal, especially in the world of crypto. A crucial part of DYOR is to not blindly believe what you read and follow any tip or prediction you see on social media. The Internet is rife with crypto trading advice, a lot of which is just false hype, coin shilling and, in some cases, blatant pump and dump schemes.
Major news sites also commonly release very negative and threatening news – however keep in mind that a lot of these news articles and exaggerated headlines are intended for the sole purpose of generating clicks, hype, controversies, and FUD (fear, uncertainty and doubt). The media lives off outrage and scandals, so take everything with a grain of salt and consult the experts before making up your mind.
DYOR is a continuous process
The investigation and monitoring of a cryptocurrency project is an ongoing process. Given how quickly things change in the world of crypto, investors need to stay informed about things like project milestones, changes or additions to development teams, announcements and external threats from competing projects or changes in the regulatory environment.
Especially if you’ve invested in a lesser-known cryptocurrency, staying up to date on news and announcements is key to understanding why price fluctuations occur and whether your coin is going to pump or dip in the near future.
Be wary of false info, scams & impostors
The golden rule: Don’t believe anything that’s too good to be true. Always be on the look out for dubious websites and information. You can learn how to stay safe trading crypto here.
Be patient & curious
Patience is a virtue. Especially in crypto. Never rush into an investment you don’t understand, and realise that there will always be another great opportunity if you are putting in the time into understanding the crypto markets. Be curious about projects and get interested in the tech and the space in general. It makes research a whole lot more interesting.
YOUR money, YOUR decision
Remember: It’s YOUR money, so it should be YOUR decision. Don’t be mad if you follow a tip from someone and it goes badly. At the end of the day, it has to be YOU who makes the decision as you’re the one who is risking their capital.
If you’re just starting out and trust someone else’s opinion more than your own, that’s completely okay. Just make sure you get opinions from a variety of sources and do some digging of your own before you invest your hard earned cash. Don’t go all in too quickly. Start small and work your way up to bigger risks & investments.
Understand the role of intuition and your gut feeling
This may not be the most comforting advice when it comes to investing, but it has to be said: Even if you know what to look for in a project, it can still be difficult to discern hype from truth and legitimate projects and people from those who just talk a big game.
Here are some things to remember:
- Getting information from a wide range of sources definitely helps here, but many experienced traders do find they end up making the occasional decision based on their gut feeling.
- You will get better at evaluating and sifting through crypto info. But as you progress, it’s crucial to learn to trust your instinct to some extent. If something doesn’t feel right, it’s best to stay clear.
- Given that it takes time to get the lay-of-the-land and develop a good sense of judgement for crypto projects, not overcommitting during your first bull run is a sound word of advice.
- Staying unemotional is key, but if something doesn’t feel right about a project or website, seek some guidance and other opinions before you invest.
- Your instinct is intertwined with your crypto knowledge. Put in the time to understand what you’re getting into and your crypto-spidey-sense will only get sharper and sharper. An invaluable skill to have if you’re serious about trading.
A step-by-step of how to DYOR on a crypto investment
Step 1: Market activity & first impressions
Okay, imagine you’re a relatively new investor and you’ve just heard about a promising crypto project. A good first thing to do is go to a website like CoinMarketCap or Coingecko to see where it’s at and if it’s really alive.
When did the project begin? What is the market cap and what is the risk/reward profile (low, mid or large-cap)? What is the recent trading volume like? Are people buying or selling it (prices increasing or decreasing)? Has it been dead for months? What exchanges is it offered on? (Australian exchanges are not usually listed here so you’ll have to check with your exchange to see if they carry it!)
Step 2: Check out Social Media
This part will depend on your preferred source, but if you want to have someone explain it to you simply, give the project a search in YouTube and see if any reputable channels have covered it. From there you might want to search the project in Twitter to see if there have been any recent or significant developments. The official website is always worth checking out too.
If you’re still intrigued by the project, dive into Reddit/Telegram/Facebook groups for some community discussion on the topic. You can even ask a few questions of your own to test how active the community is. A lack of discussion of a coin may be a red flag as most solid projects will have at least some die-hard supporters.
As you research, note down any doubts or questions you might have and assess whether it is the type of project your portfolio needs. Keep in mind that information in crypto is extremely time sensitive, so make sure it’s recent and get a few different opinions.
Step 3: Go straight to the source
Social media and news sites are great, but at some point you have to go straight to the source of the info to have a holistic view on the project’s potential. Watch/read interviews from founders and the CEO and be sure to have a poke around the official website of the project.
A good crypto project will be upfront about their staff and developers and should have a number of impressive partnerships. Finally, check out the white paper and road map of the project and make sure everything looks legit. You can never be too careful.
Step 4: News & headlines
While social media is a great place for hot-off-the-press info, if a crypto is really making big waves it is likely to be featured on a reputable news site. Have a look at sites like CoinTelegraph, CoinDesk, and Decrypt and search to see whether your prospective project has been in the headlines recently. If it hasn’t, don’t assume it isn’t a good investment, but it should give you an idea of how unknown/risky/speculative a project it is.
Step 5: Phone a friend
If you’re planning on putting up some serious capital, don’t hesitate to ask someone who knows about crypto for their opinion. Ideally you know some other people in the space, but if you don’t, Telegram, Reddit, Discord and other social media apps are a great place to have your questions answered by real people. If you’re serious about crypto, you should be a part of a few online or in-person communities.
Step 6: Weigh it all up
After you’ve spent some solid time researching the project, weigh up the opinions and insights you’ve gained. Even though a few hours should be enough to give you a rough idea of what kind of investment you’re looking at, research is an ongoing process and if you’re serious about the coin then you should stay up to date with news and announcements as things change fast in crypto-land.
Ask the right questions before investing in a project
While you are researching, having a checklist of the most important questions to ask is useful. Here are some things you should have solid answers to before you invest:
- What problem is this cryptocurrency trying to solve? Is it a real problem?
- What is the market cap of this crypto? What is the risk profile?
- How is it unique from its competitors? How different is the cryptocurrency to its closest competitor?
- How did this project develop and what are the plans for future development?
- How reputable is the team? Do they have a history of past success?
- How large is the community that are willing to adopt this crypto’s use-case?
- What are the legal regulations about this crypto in my country?
- How is the project’s marketing and social media presence?
- How are they trending in Google and on Social media?
- What are the key features of the cryptocurrency’s blockchain?
- How well defined is their roadmap?
- Are there any red flags? Any sceptical views on this project
- Which exchange can I buy this crypto on?
Get some professional guidance
The world of crypto can be daunting if you’re just getting started. While this is to be expected, we cannot stress how valuable advice, investing tips and expert guidance can be for new investors.
Trading with a platform like Digital Surge gives you access to a wealth of first-hand knowledge, a responsive live chat, personalised customer-support and expert trading advice you will be hard-pressed to find anywhere else.
Send us a message today to organise a free phone consultation with one of our client managers so you can find a trading strategy that suits you.
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We hope this guide on how to DYOR has been useful. Good luck!
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