Any type of investment carries some risk.
This is true not only when investing in crypto assets but in traditional finance as well, like the stock market or buying a home. Before investing in anything, you should always DYOR (Do Your Own Research). But sometimes, you don’t even know where to start. So today, we are sharing ten basic questions you should ask when vetting a crypto investment.
When it comes to investing, in the crypto space, in particular, we see a lot of FOMO and FUD. FOMO often results in folks “apeing” – which means buying a token shortly after hearing about it without properly researching it first. Sometimes you get lucky, and it works out. But very often, this FOMO-reactive investing results in losses. FUD means Fear, Uncertainty, and Doubt. When you don’t understand a project or investment well, you are more likely to experience FUD. Trust us, this isn’t fun and can be a major buzzkill for your mental health. We don’t want either of these to happen to you.
How to combat FOMO & FUD
If you understand a project and have a strategy, your confidence and action around an investment will be much more clear, no matter what the market is doing. So, here’s a list of 10 questions you should know the answer to before investing in a project/token.
- Is the project/product’s technology innovative or disruptive?
- What is the narrative around the product or idea?
- Is it early to the market?
- Who is on the team? Are they anonymous? Do they have a good history with products?
- How active and engaged is the community?
- If the project involves smart contracts, have they been audited?
- Is there consistent project development?
- If the project already has a token, what is the point of the token – does it have long-term utility?
- What does your community think of the project?
- What are your personal goals with this investment? Do you have a strategy?
These are just some of the questions you should consider when researching an investment opportunity. We cover an even more exhaustive list and dive deeper into things like investment strategy inside Crypto Class - Sessions 3 & 4.