There are obviously several key factors that need to be taken under consideration when one is evaluating if an altcoin is a worthy investment or not. As it stands, while there are several proponents of the cryptocurrency industry who would immediately call for mass adoption of blockchain technology, there are also several digital landmines that are prevalent in the ecosystem of cryptos such as protocol hacks and rug pulls which would provide new users with the experience of being completely lost at sea.
It should come as no doubt to anyone that there is a lot more to investments than just gut feelings and technical analysis. The last year has been a testament to a few blockchain analysis platforms that have launched dashboards with metrics that would help one get a far greater insight into proper investing.
Ways To Analyse An Altcoin
One of the easiest ways to determine the worth of an altcoin would be to look into the statistics that would highlight the level of activity from the user base of the platform as well as the developer community. Most of the top protocols in the crypto space offer several interesting analytics that would help one track the growth in active users over time. Some, like Dune Analytics, would offer a far more granular insight into the metric.
Other important data that one would do well to remember when evaluating an altcoin would be to include the average number of active wallets on a regular basis. Investors have to also look at the number of transactions and the volumes transacted on the protocol, coupled with social media metrics such as mentions on Twitter which would help understand consumer sentiment.
Some systems like Cointelegraph Markets Pro usually provide immediate notifications on an altcoin’s Twitter mention volumes and several unusual changes in trading volume.
