Which crypto to buy in 2025 and beyond? What you should pay attention to

Choosing which crypto to buy can be a difficult decision. By now, tens of thousands of cryptocurrencies are available on various trading platforms, such as Finst. This makes it challenging to determine which crypto you want to invest in. In this blog, we try to inform you as clearly as possible by explaining which cryptocurrencies currently receive the most investment, how you can conduct your own research, and what risks are involved when investing in crypto.

Which cryptocurrencies are currently traded the most?

The crypto market is constantly moving, which means that the best-performing cryptocurrencies continuously change, making it difficult to determine which crypto will increase in value. What we can conclude is that there are several cryptocurrencies that are the largest based on market capitalization and therefore currently belong to the biggest crypto assets. This does not mean that these cryptocurrencies are better or less risky, but it does provide insight into how the top of the crypto market currently looks. Below is an overview of the top 10 excluding stablecoins:

• Bitcoin (BTC)
• Ethereum (ETH)
• Ripple (XRP)
• Binance Coin (BNB)
• Solana (SOL)
• Tron (TRX)
• Dogecoin (DOGE)
• Cardano (ADA)
• Bitcoin Cash (BCH)
• Chainlink (LINK)

Which crypto is likely to rise based on historical data?

Predicting the future prices of cryptocurrencies is nearly impossible. Prices are heavily influenced by market sentiment, economic conditions, and other external factors over which nobody has full control.

What is possible, however, is analyzing historical price data and creating model-based scenarios. This allows you to gain insight into how prices might develop if similar patterns were to occur again.

Based on a methodology we developed ourselves, we have created three scenarios for the largest cryptocurrencies: bullish, bearish, and neutral.

It is important to emphasize that the past offers no guarantees for the future. The results are intended solely as an educational tool and should not be interpreted as financial advice.

View our full methodology here.

Based on our model, below you will find the neutral expectations for the top 10 largest cryptocurrencies excluding stablecoins:

Investing in crypto-assets involves risk of losses. Prediction data is based on historical data and is provided for informational and educational purposes only. Prediction data may not be complete or accurate, and do not constitute any representation, warranty or any financial, investment or other form of advice by Finst. Future prices may differ significantly from the presented prediction. Before trading any crypto-asset, you should do your own research and evaluate your risk appetite. Finst is not responsible for any losses which you may incur from trading crypto-assets.

Bitcoin (BTC)

Bitcoin (BTC) is the founding father of the crypto market. It is the very first cryptocurrency and was developed by the creator of crypto, namely Satoshi Nakamoto. Bitcoin has also been the largest cryptocurrency since 2009 and was developed as a replacement for the existing international payment system. Satoshi’s vision is to offer a cross-border, censorship-resistant, scarce digital payment method that is independent of central parties. With the highest market capitalization in the crypto market, Bitcoin is often seen as “digital gold” and is mainly used as a store of value due to its fixed maximum supply of 21 million BTC.

Bitcoin and its underlying blockchain technology make it possible to perform decentralized peer-to-peer transactions without the involvement of a party such as a bank. You can send Bitcoin directly to another person without a company facilitating your transaction. Instead, transactions are executed by a network of computers worldwide, also known as miners. The blockchain of Bitcoin uses a technology called Proof of Work (PoW). This is a technology where computers use their processing power (CPUs) to solve complex cryptographic puzzles to validate transactions and process them securely by adding new blocks to the blockchain. This is a relatively expensive and energy-intensive process, requiring substantial electricity and expensive hardware. This has led to significant criticism from governments and environmental activists.

Key information about Bitcoin:

• Maximum supply: 21 million BTC
• Circulating supply: the circulating supply is currently 19.95+ million and increases slowly thanks to the mining mechanism.
• Mechanism behind Bitcoin: every four years, after every 210,000 blocks, the reward for miners is halved. This, combined with rising demand, should stimulate long-term value growth.
• Use: Designed for cross-border peer-to-peer payments.
• Team behind Bitcoin: Bitcoin has no company or large development team pulling the strings. Instead, Bitcoin operates completely decentralized. Independent developers can submit BIPs (improvement proposals). When approved by a majority, proposals are implemented.

Bitcoin (BTC) price development in the coming years

According to our prediction model, the Bitcoin price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Bitcoin could potentially reach € 101.252,95, a difference of +29.29%.

Ethereum (ETH)

Ethereum is the first and also the largest smart contract platform. After Bitcoin, Ethereum has been the second-largest cryptocurrency for many years. On the platform, developers can build decentralized applications (dApps).

In 2013, Vitalik Buterin (the creator of Ethereum) described in his whitepaper how Ethereum could be more than just a payment system like Bitcoin. Smart contracts were the solution. Ethereum officially launched in 2015. Since then, the platform has grown significantly and has become the absolute market leader in DeFi, NFTs, and other web3 applications. Since 2022, the network has transitioned from Proof of Work to Proof of Stake, introducing a staking mechanism. Since then, numerous updates have been implemented to make the network more scalable, faster, and cheaper. The Ethereum network has also become much more sustainable, as it no longer depends on energy-intensive mining.

These updates are part of a roadmap managed by the Ethereum Foundation and various development teams. By continuing to innovate, Ethereum aims to advance the crypto landscape and compete with other major smart-contract platforms such as Solana, which is currently much faster, more scalable, and cheaper.

Key information about Ethereum:

• Native token: The native token of the Ethereum network is ETH (also called Ether). ETH is used to pay transaction fees (gas fees) needed for validators to validate transactions.
• No fixed maximum supply: Unlike Bitcoin, ETH does not have a maximum supply. This means that an unlimited amount of ETH can theoretically be brought into circulation.
• Inflation/deflation: After the introduction of EIP-1559 (an improvement proposal), a burn mechanism was introduced, which removes the base fee (the minimum required gas fee) from circulation. This can reduce the amount of ETH, creating scarcity.
• Use: Ethereum is used to pay transactions, execute smart contracts, and run dApps within a global programmable blockchain ecosystem. ETH functions as fuel (gas) to run and fund all activities. This means that all transactions are paid in gas fees, part of which goes to validators (users who stake ETH) who validate transactions and secure the network.

Ethereum (ETH) price development in the coming years

According to our prediction model, the Ethereum price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Ethereum could potentially reach € 101.252,95, a difference of +29.29%.

Ripple (XRP)

Ripple (XRP) is a cryptocurrency focused on improving international payments. It is one of the oldest and best-known cryptocurrencies. In recent years, Ripple has become particularly known for its legal battle with the American financial regulator, the SEC. They sued Ripple Labs (the company behind Ripple) for the illegal issuance of XRP during investment rounds. The SEC views XRP as a security and not as a digital asset, meaning the issuance of XRP should have been approved by the regulator. In the meantime, U.S. judges have ruled that XRP itself is not a security when traded on secondary markets.

Ripple focuses on making the existing international payment system, the SWIFT network, more efficient. They built the Ripple network to make international transactions faster, cheaper, and more efficient than they are today. They aim to do this by applying the benefits of crypto. XRP is intended to function as a bridge asset for international transactions. Imagine wanting to transfer euros to Australia, where the Australian dollar is the national currency. Normally, you must do this via a bank that charges high fees. XRP could do this for you at much lower cost and much faster, because the network validates the transaction instead of the bank, which often has to manually approve it.

The system behind Ripple is called the XRP Ledger. Unlike most crypto systems, it does not use classical consensus mechanisms like Proof of Work or Proof of Stake. Instead, the XRP Ledger uses its own consensus mechanism where independent validators confirm transactions within seconds. This makes the XRP network extremely fast and energy-efficient.

Ripple focuses on building partnerships with centralized banks, fintech companies, and payment providers that need to integrate RippleNet to accelerate international money flows. They are also working on new products and applications such as CBDC solutions.

Key information about Ripple:

• Maximum supply: XRP has a fixed maximum supply of 100 billion tokens. These were all created at launch, but not all were put into circulation immediately.
• Escrow: A large portion of the XRP supply is held in escrow contracts and is released monthly in a controlled manner.
• Consensus mechanism: The XRP Ledger does not use Proof of Work or Proof of Stake, but its own mechanism (RPCA), where independent validators confirm transactions within seconds.
• Use: XRP is used as a bridge currency for fast, cheap, and efficient international payments, especially between banks and payment providers. The token ensures near-instant settlement and acts as a liquidity tool within the RippleNet ecosystem, allowing financial institutions to make payments without pre-funding accounts.
• On-Demand Liquidity (ODL): Ripple’s ODL is used to perform international payments directly with XRP, without banks needing to hold local currencies.

Ripple (XRP) price development in the coming years

According to our prediction model, the Ripple price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Ripple could potentially reach € 101.252,95, a difference of +29.29%.

Binance Coin (BNB)

BNB, also known as Binance Coin, is the native crypto within the Binance ecosystem. Binance is known as the largest crypto exchange in the world but has also launched its own blockchain with a cryptocurrency. Initially, BNB was launched in 2017 as an ERC-20 token on Ethereum, but later in 2019 its own blockchain was launched. Today, BNB runs on the BNB Smart Chain (BSC) and the BNB Beacon Chain, two blockchains designed for fast and inexpensive transactions, with support for smart contracts and a large ecosystem of dApps. On BSC, different token standards can be used by developers, known as BEP token standards. These standards often resemble Ethereum’s ERC standards in structure, which makes many contracts compatible with the Ethereum Virtual Machine. This allows developers to easily migrate dApps from Ethereum to Binance.

In the meantime, the Binance ecosystem has grown into one of the largest smart contract platforms in the world. They are experiencing enormous growth within the DeFi sector and other Web3 solutions, such as in the NFT market and blockchain gaming, thanks to the high speed and low costs, especially compared to Ethereum. The BNB Smart Chain uses a Proof-of-Staked-Authority (PoSA) consensus mechanism, a combination of Proof of Stake and Proof of Authority, allowing transactions to be processed quickly and efficiently.

Binance regularly performs “token burns,” in which BNB is permanently removed from circulation to increase scarcity. With the ongoing development of the BNB Chain, the ecosystem aims to remain relevant and compete with other major smart contract platforms such as Ethereum and Solana.

Key information about BNB:

• Maximum supply: BNB has a fixed maximum supply of 200 million tokens. This means that in principle no more tokens will ever be created. The supply was created at launch, but not all tokens were tradable from the beginning. Some tokens were released into circulation later via vesting schedules by the Binance team and ecosystem reserves.
• Deflationary model via token burns: The number of tradable tokens is slowly reduced through token burns. This mechanism makes BNB deflationary. The goal is to eventually reduce the supply to 100 million BNB. Burns take place in two ways: through the automatic BNB Auto-Burn mechanism, which burns a specific amount of BNB each quarter based on price and network activity, and through real-time burns (BEP-95), where a small amount of BNB is burned with every transaction on the BNB Smart Chain.
• Network standards: There are various token standards on the BNB network, but BEP-20 and BEP-2 are the most widely used and important. BEP-20 is a token standard on BSC and is used for creating new crypto tokens and developing smart contracts and dApps. BEP-2 was developed for the BNB Beacon Chain and regulates governance (the governance model) and the staking mechanism.
• Consensus and rewards: The BNB Smart Chain uses a Proof-of-Staked-Authority (PoSA) mechanism in which 21 validators are selected based on staking and reputation.
• Use: BNB is used to pay transaction fees on the BNB Smart Chain, but also for smart contracts, DeFi activities, staking, and token sales through the Binance Launchpad.

Binance Coin (BNB) price development in the coming years

According to our prediction model, the BNB price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, BNB could potentially reach € 101.252,95, a difference of +29.29%.

Solana (SOL)

Solana is a very fast blockchain known for its rapid transaction processing and low costs. The network was launched in 2020 by Anatoly Yakovenko and uses its own consensus mechanism called Proof of History (PoH), which uses timestamps to validate transactions highly efficiently. The network combines PoH with Proof of Stake (PoS) to enable fast and secure validation. As a result, the network can process tens of thousands of transactions per second. Solana, like Ethereum, is a platform for developing dApps and executing smart contracts but was specifically developed to tackle the scalability issues that platforms such as Ethereum face.

On Solana, developers can build dApps for various purposes, such as DeFi, NFT marketplaces, and blockchain gaming. Since its launch, Solana has grown into an attractive alternative to Ethereum due to its lower costs and higher speed. This has made the token SOL one of the largest cryptocurrencies today, and the network is embraced by hundreds of thousands of users worldwide.

The rapid growth of Solana has also revealed vulnerabilities in the past. During periods of high network congestion, the network experienced multiple outages, causing the blockchain to halt. This led critics to call the system unreliable. At the same time, continuous development aims to make the network more robust and efficient. With an active developer community, strong investors, and widely used dApps, Solana remains one of the most influential and fastest-growing layer-1 blockchains in the crypto space.

Key information about Solana:

• Maximum supply: Solana does not have a maximum supply. Instead, the network uses an inflation model, which means that an unlimited amount of SOL can be issued.
• Token issuance: Solana issues new SOL tokens as staking rewards to validators and delegators on the network. At launch, the inflation rate was about 8%, meaning 8% more tokens were added each year. This percentage decreases yearly according to a planned schedule, meaning long-term inflation will stabilize around 1.5% annually.
• Burn mechanism: Solana also has a burn mechanism. A portion of each transaction fee is automatically burned. This offsets a small portion of inflation and helps stabilize the supply over the long term.
• Use: SOL is the native token of the Solana network and is used to pay transaction fees, incentivize users to participate in staking, validate transactions, and secure the network. Additionally, SOL is used to access various dApps, DeFi protocols, and NFT marketplaces.
• Technology: Solana uses a combination of Proof of Stake and Proof of History to validate transactions, add new blocks to the blockchain, and secure the network. This is an efficient system that allows transactions to be processed extremely quickly and cheaply (fractions of a cent).

Solana (SOL) price development in the coming years

According to our prediction model, the Solana price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Solana could potentially reach € 101.252,95, a difference of +29.29%.

Tron (TRX)

Tron is a blockchain launched in 2018 with the aim of decentralizing the internet as we know it and making the distribution of digital content more efficient. Additionally, Tron, like Ethereum, Solana, and BNB, is a platform for the development of dApps. This means you can build decentralized applications similar to those on other smart contract platforms, such as DeFi solutions.

Tron is known for its high trading volumes in stablecoins such as USDT and USDC. A significant portion of global stablecoin transactions runs through Tron.

Tron uses Delegated Proof of Stake (DPoS) to validate transactions, add blocks, and secure the network. In this mechanism, 27 nodes are elected by TRX holders through voting. These 27 nodes are called Super Representatives. This system enables very fast and inexpensive transactions, making Tron particularly attractive for stablecoin transfers, gaming applications, and various DeFi solutions.

Tron (TRX) price development in the coming years

According to our prediction model, the Tron price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Tron could potentially reach € 101.252,95, a difference of +29.29%.

Key information about Tron:

• Maximum supply: Tron does not have a fixed maximum supply. The supply is dynamically determined and can increase (through block rewards) or decrease (through burns).
• Token issuance: At the launch of Tron, 100 billion TRX were created. These tokens were distributed among ICO participants and the Tron Foundation (the development team behind Tron). New TRX enters circulation through block rewards: with each block, validators (Super Representatives) and their delegators receive a reward.
• Transaction costs & burn mechanism: Transactions on Tron are paid with TRX, but this works differently from blockchains with classic gas fees. Tron uses two types of resources: Bandwidth and Energy. These resources are received automatically when you temporarily freeze (stake) your TRX. Bandwidth is used for simple transactions, while Energy is required for smart contract interactions. If you do not have enough resources, you pay the difference in TRX. A small portion of these costs is burned, permanently removing TRX from circulation and slightly limiting supply growth.
• Use: TRX is used for transactions, smart contract interactions, staking, and governance. It is especially used for USDT transactions thanks to Tron’s low costs and high speed.

Dogecoin (DOGE)

Dogecoin was created in 2013 as a joke but has grown into a serious and popular cryptocurrency. The project features a Shiba Inu dog and is a memecoin. Dogecoin has its own blockchain based on Litecoin. It uses the same technology as Litecoin, called Scrypt, making both networks very similar. A major difference is the supply: Litecoin has a maximum supply of 84 million LTC, while Dogecoin has no maximum supply and approximately 5 billion new DOGE are issued every year.

Dogecoin uses the Proof of Work (PoW) consensus mechanism to validate transactions and keep the blockchain decentralized and secure. This means computing power is used to validate transactions. Dogecoin mining happens through merged mining with Litecoin, meaning both networks share hashing power.
Like Bitcoin, Dogecoin was developed with one goal: enabling peer-to-peer payments without third-party involvement through blockchain technology.

Dogecoin has grown rapidly in recent years, partly thanks to Elon Musk. He openly promoted Dogecoin in 2021 on what was then still Twitter (now X). This caused huge hype, sending the price skyrocketing in a short period. Dogecoin surged from fractions of a euro cent to tens of euro cents in just months, powered by a series of Musk’s tweets in which he jokingly called Dogecoin “the people’s crypto” or shared memes.

He saw potential for Dogecoin as a payment method, including for Tesla. In 2021, Tesla announced it would accept Dogecoin for certain merchandise. Later, SpaceX also accepted Dogecoin for merchandise, and Musk announced that broader payment options using DOGE were being explored.
These promises and attention from Musk led to more companies embracing Dogecoin as a payment method. Since then, the memecoin has grown into a serious player in the market with a large community.

Key information about Dogecoin:

• Maximum supply: Dogecoin has no maximum supply and is an inflationary token. Each year, approximately 5 billion new DOGE are added through mining rewards.
• Use: DOGE is used as a payment method. With Dogecoin, you can make fast, inexpensive payments such as microtransactions. The network can process 30 to 40 transactions per second and has a block time of 1 minute, making payments relatively fast.
• Consensus: Dogecoin validates transactions using the Proof of Work consensus mechanism. The network is based on Scrypt, the same algorithm Litecoin uses.

Dogecoin (DOGE) price development in the coming years

According to our prediction model, the Dogecoin price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Dogecoin could potentially reach € 101.252,95, a difference of +29.29%.

Cardano (ADA)

Cardano is a blockchain that develops based on scientific research. This means all technological developments are designed based on academic and scientific studies. As a result, Cardano positions itself as one of the most secure and sustainable blockchains. Cardano was founded in 2017 by one of Ethereum’s co-founders, Charles Hoskinson.

The network uses its own Proof-of-Stake variant called Ouroboros. This mechanism is designed to scale in a secure and energy-efficient way. Developers can build dApps on the platform, such as DeFi solutions.
The project is supported by the Cardano Foundation, working closely with IOHK (Input Output) and Emurgo. They have developed a multi-year roadmap consisting of different phases that aim to make the blockchain increasingly decentralized and scalable so it becomes suitable for large-scale adoption. Examples include improvements to smart contracts, the staking mechanism, and governance.

Due to its academic foundation, development progresses more slowly compared to competitors such as Solana, but it does create a solid and reliable basis with a clear long-term vision.

Key information about Cardano:

• Maximum supply: Cardano has a fixed maximum supply of 45 billion ADA.
• Distribution & inflation: At launch, approximately 31 billion ADA were released into circulation. These tokens were distributed among ICO participants and reserved for development, marketing, and research. The remaining 14 billion will slowly enter circulation through staking rewards until the maximum supply is reached.
• Transaction costs: Transaction fees on the network are paid in ADA. These fees go entirely to a Treasury, where they are reserved for future ecosystem development.
• Use: ADA is used for transaction fees, executing smart contracts, and participating in dApps within the Cardano ecosystem. ADA is also staked by users and validators to secure the network and earn rewards.
• Consensus: Cardano uses Ouroboros, a scientifically supported Proof-of-Stake mechanism.

Cardano (ADA) price development in the coming years

According to our prediction model, the Cardano price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Cardano could potentially reach € 101.252,95, a difference of +29.29%.

Bitcoin Cash (BCH)

Bitcoin Cash was developed in 2017 and is a hard fork of Bitcoin. This means that a split occurred in the blockchain at that time: one side continued as Bitcoin (as we know it today), and the other continued as a new blockchain called Bitcoin Cash. This decision resulted from a long-running discussion within the Bitcoin community. A portion of users believed that Bitcoin was not scalable or fast enough to function as a global payment system.

The proposed solution was to increase the block size so that more transactions per second could be processed. When no consensus was reached, proponents decided to go their own way, resulting in the creation of Bitcoin Cash. Much remained the same: the Proof of Work (PoW) consensus mechanism, the maximum supply of 21 million coins, and the halving cycle.

The practical differences:

• The block size increased from 1 MB on Bitcoin to 8 MB (later 32 MB) on Bitcoin Cash.
• Thanks to the larger block size, Bitcoin Cash can process 20–50 transactions per second, compared to about 3–7 transactions per second on Bitcoin.

Despite these technical advantages, Bitcoin Cash has never fully kept pace with Bitcoin. However, they have an active team of developers who regularly implement updates to further develop the network, and there is a small but dedicated community that actually uses BCH as a payment method.

Key information about Bitcoin Cash:

• Maximum supply: Bitcoin Cash has a maximum supply of 21 million BCH.
• Issuance & halving: New BCH is issued through mining. Bitcoin Cash follows the same halving cycle as Bitcoin, meaning the amount of new BCH is halved every four years.
• Use: BCH is designed as peer-to-peer digital cash, with a focus on fast and inexpensive payments, making it suitable for cross-border transactions and microtransactions.
• Consensus: Like Bitcoin, Bitcoin Cash uses Proof of Work but with larger block sizes to process more transactions per second.

Bitcoin Cash (BCH) price development in the coming years

According to our prediction model, the Bitcoin Cash price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Bitcoin Cash could potentially reach € 101.252,95, a difference of +29.29%.

Chainlink (LINK)

Chainlink is a decentralized oracle network. The project was founded in 2017 and aims to connect data from, for example, IoT to blockchain technology through smart contracts. This makes it possible for blockchains to retrieve external data, which can be used in various decentralized applications, such as in the DeFi sector and supply chain management.

Chainlink makes this possible thanks to a network of independent nodes (oracles) that deliver reliable data to smart contracts. Oracles can play an important role in, for example, insurance, where smart contracts can automatically pay out claims based on external data such as weather information or flight delays. Oracles are also used in DeFi, for example to retrieve up-to-date price information of cryptocurrencies for lending platforms or to execute liquidations correctly.

After several years of development, the Chainlink protocol was officially launched in 2019. LINK quickly grew into a well-known cryptocurrency, and meanwhile many major DeFi platforms use Chainlink's data, such as Aave and Synthetix.

Nodes that function as an oracle can earn LINK for delivering reliable data. In this way new LINK is issued. In addition, the platform continues to develop and regularly carries out updates, such as improvements to the staking mechanism and to Cross-Chain Interoperability (CCIP), in order to add new data sources. This strengthens the goal of becoming and remaining a connector between data systems and blockchains.

Key information about Chainlink:

• Maximum supply: Chainlink has a maximum supply of 1 billion LINK. The tokens were pre-created and are gradually distributed.
• Use: LINK is used to pay oracle nodes for delivering reliable data to blockchains. It also functions as collateral to guarantee the quality of data feeds and is used within the Chainlink staking model.

Chainlink (LINK) price development in the coming years

According to our prediction model, the Chainlink price could move towards € 86.708,05 by the end of 2026 in a neutral scenario, an increase of +11.26%. Looking at 2027, Chainlink could potentially reach € 101.252,95, a difference of +29.29%.

What should you pay attention to when choosing which crypto to buy?

The selection in the crypto market is immense. At Finst alone, you can already buy more than 340 cryptocurrencies. So how do you choose which crypto to buy? We are happy to give you the tools to determine whether a crypto is worth investing in. Many different aspects matter, including the level of risk you are willing to take. The crypto market is a complex and volatile market, with both more established cryptocurrencies such as Bitcoin and Ethereum and smaller projects that react much more strongly to market developments. Your goals are also important. Are you investing for the long term or do you want to take advantage of short-term opportunities, for example during a bullrun?

Knowing what to look for is very important in order to make well-considered decisions. In this blog we therefore try to give you several tools to conduct your own research.

1. Technology behind cryptocurrencies

Research which technology a crypto uses, such as Proof of Work or Proof of Stake, and read about the advantages and disadvantages of these techniques. This has a major influence on the speed, security, and scalability of the blockchain. Good technology and a robust network increase the chance of success.

Additionally, it is possible that a crypto operates on the blockchain of another crypto. There is a good chance that you will come across an ERC-20 token (on Ethereum) or a BEP-20 token (on Binance). These are tokens that use the technology of the host blockchain.

2. Function of a cryptocurrency

Every crypto and blockchain has a different purpose. Investigating what a project is trying to solve is essential to making a good decision. Is the project innovative or more of the same? Is it a payment method, utility token, governance token, or infrastructure? Understand which problem it solves.

3. Community

The community plays an important role in the adoption of a crypto and often also in the development of a project. Projects with a large and active community often have a higher chance of success. Interest leads to more demand and to the willingness to further develop and innovate the network or project.

4. Team behind a crypto and roadmap

Research the team or organization behind the crypto. Is it known who the founders are? Are they experienced? Is there transparency? Is active development taking place? These are all questions you can answer. Projects whose founders are unknown may be unreliable.

In addition, a clear vision and a realistic roadmap say a lot about a project's future plans and professionalism.

5. Market cap

The market cap determines the volatility to some extent. Smaller projects are often more volatile than larger projects such as Bitcoin and Ethereum. This means they often react more extremely to market developments, both positively and negatively. Take this into account when determining the level of risk you are willing to take.

Additionally, market cap combined with the number of circulating tokens determines the price. Simply put: price = market cap / circulating supply.

6. Tokenomics

The tokenomics say a lot about a project. This refers to the distribution of available tokens, the maximum supply (if there is one), and whether a token is inflationary or deflationary. Is there a maximum supply? How are new tokens issued? Is there a burn mechanism?

The distribution is also important. Are tokens reserved for marketing and development? Is the wallet distribution healthy, or do a few wallets hold a large portion of the tokens? The latter can be a red flag because whales or the team can more easily manipulate the price.

7. Legal and political risks

Positive and negative sentiment surrounding the market or a specific crypto can significantly impact price development. Are there lawsuits against the project? What political developments are affecting crypto? And how do countries view crypto? Legal and political uncertainty can deter investors.

8. Competitive position & ecosystem

How a blockchain positions itself within the crypto space says a lot about the future of a crypto. There is also a lot of competition in the crypto market. There are now many smart contract platforms, each with its own technology and advantages.

Is activity within the ecosystem your crypto is involved in increasing or decreasing? What are developers doing to keep up or innovate further? This says a lot about the relevance of the project and the cryptocurrencies running on it.

9. Partnerships & adoption

Is there already significant adoption of the crypto or the technology? And has the project entered collaborations? Concrete partnerships demonstrate that the technology is valued and actually used.

10. Liquidity & availability

Trading volumes and availability of a crypto indicate something about popularity and safety when trading. High trading volumes and a well-filled order book make it easier to enter or exit positions. With low liquidity, it can be more difficult to sell a crypto without significant price impact.

11. Macro-factors & market sentiment

Researching market sentiment is important to make well-considered choices. Sentiment surrounding the crypto market determines much of the short-term direction of prices.

Therefore monitor economic factors, as well as legislation surrounding crypto. Important events such as the Bitcoin Halving also play a large role in market sentiment.

It is also wise to look at where we are in the market cycle: are we in a bull or bear market?

12. Security

Security is an important factor. Has the project experienced vulnerabilities in the past, such as hacks or network outages? And how was this handled? This says a lot about the reliability and robustness of the network. A secure network with a good reputation inspires more confidence.

Risks of investing in crypto

Before you make a final decision about which crypto you want to buy, it is important to understand the risks. The crypto market is very risky: a few wrong decisions and you can lose a large part of your investment.

The risks below are risks that the entire market faces:

High volatility

The crypto market is highly volatile. This means that the prices of cryptocurrencies can change completely within a few hours and that crypto assets can experience rapid increases but also significant declines. It therefore offers opportunities, but also a lot of risk.

Characteristics:

• Strong and unpredictable movements;
• Cryptocurrencies are very sensitive to news and market sentiment;
• High trading volumes of a cryptocurrency often correlate with rapid price movements.

Do you want to learn how to better deal with dips in the market? Then read our tips here.

Market risk

The crypto market almost always reacts to external developments. For example, the crypto market often correlates with other financial markets, such as stock markets. In addition, the following factors influence the short- and/or long-term sentiment:

• Economic recessions;
• Interest rate increases or decreases;
• Inflation;
• Geopolitical uncertainty;
• Legislation.

The level of risk an investor is willing to take or avoid often has a major impact on risky assets such as crypto.

Technical risks

Behind cryptocurrencies lies complex technology and software. Software always carries risks, such as:

• Bugs in smart contracts;
• Hacks or exploits;
• Vulnerabilities in wallets or exchanges;
• Network stagnation or downtime.

Found vulnerabilities or hacks can negatively affect confidence in a project or trading platform, which can impact the prices of a specific crypto or even the entire market.

Regulatory risks

Regulation surrounding crypto plays an important role in market sentiment and the adoption of crypto. This regulation can have both positive and negative effects.

Risks may arise due to:

• Stricter regulations from governments;
• Restrictions for trading platforms;
• New tax regulations.

Sentiment and media sensitivity

The volatility of cryptocurrencies can also be influenced by news platforms, social media, market hypes, and influencers.

A good example is the memecoin hype. In the past, we have seen many “Pepe the Frog” and “Shiba Inu” related memecoins increase in value purely due to hype. The trigger can be just one coin, such as PEPE in the past. News platforms and influencers started writing and talking about it, which created a real hype around memecoins. This is often short-lived and not sustainable, making it risky to enter the market during these moments.

Human errors

A frequently underestimated risk is the human factor. People make many mistakes when investing in crypto.

Examples:

• Losing your private keys, meaning you no longer have access to your wallet (this risk exists with both software and hardware wallets);
• Using unsafe apps or wallets. In the world of dApps, you can easily connect your wallet everywhere, and through malicious smart contracts hackers can gain access to your funds;
• Cryptocurrencies are often sent to the wrong address due to a typing error. A characteristic of crypto is that transactions cannot be reversed. After validation, your crypto is permanently lost;
• There are many scammers in the crypto market. Scamcoins are created where scammers steal money through, for example, a rug pull. In addition, many scammers operate on social media, pretending to be the founder of a well-known project (such as Ethereum) or a representative of a platform like Finst. These scammers try to subtly obtain your login details or private keys. Do not fall for this! Trading platforms will never ask for your login details.

Conclusion

The question of which crypto you should buy depends entirely on your own goals, risk appetite, and knowledge. By paying attention to technology, function, tokenomics, community, the team, and market trends, you can form a better picture of which crypto truly has potential. Combine this with a solid understanding of risks such as volatility, regulation, and security, and you can much better assess which crypto may be interesting for you to buy. Ultimately, doing your own research remains the key to making smart and well-informed decisions in the rapidly evolving crypto market.