These are really good days for investors in cryptocurrency, and with luck being made (and lost) quickly, it’s easy to forget the difference between “price” and “value.” Many investors focus on the quick flip - they buy the hottest ICO and hope to immediately sell for huge benefits once the crowd sale is over.
There’s nothing wrong with that approach, and even some of them have been very successful. Although, it’s much easier and more sure to make profits to buy and hold, and in that case, investors need to differentiate clearly between a token’s price and its value.
Many tokens and currencies represent large projects that have high potential. Some of them stand to disrupt the traditional ways to do things, maybe even bringing huge profits in the future. Because investors begin to come faced with the fact that the days of flipping ICO tokens are fading away. Quick profits should give way to long-term potential.
Investors should ask themselves about the current and potential value of the projects they evaluate. The quickest way to lose money is to buy an overpriced token that has almost no potential and therefore low value. On the other hand, investors with enough foresight to purchase the woefully underpriced Bitcoin last year have seen great returns. It's necessary for research and proper vetting of a team’s business model cannot be overemphasized.
It is very important to understand what will stimulate demand for the token in the marketplace. It's necessary an honest, unbiased assessment of the project. Many projects require an idea to be perfectly executed in order to succeed, and investors should consider that perfection occurs only rarely in this world.
Market factors such as an increase in crypto adoption will come significantly at some point. This remains in the future, although, and isn’t certain. Investors shouldn’t settle for a project whose token’s value is hinged purely on speculation. Neither should they be carried away by hype.
Investors should to look beyond the commonalities of tokens and focus on project’s unique proposition. The moment a new project starts copying from existing ones, investors should take a step back. Investors don't need to follow other investors without knowing why they are putting their money into a project.
Every investor should dispassionately assess the current and future value of any project in which he invests.