Jan 03, 2021

Making Sense Of Crypto Advice

In the crypto world everyone has an opinion. Usually these opinions are contradictory. What is the best way to make sense of them?

First of all you should start by ignoring obviously biased voices. A CEO of an exchange proclaiming Bitcoin has huge growth potential? A rep of a mining company claiming coin x is the next big thing? These people have a vested interest to draw you to the market. They will never tell you buying crypto is a bad idea.

Secondly you should look beyond pure technical crypto aspects. There have been many a coin promising new groundbreaking technical possibilities. New cryptocurrencies are like startups - it's all about the execution. Technology should be there, but does not guarantee success.

A much better option is to look at data. Look for news regarding specific coins, new projects launched or funded using their technology or the number of developers working on them.

For forecasts regarding the market for a particular coin Google Trends are a great source of information. Whenever you see a "Bitcoin" sharply trending like in 2017, do consider if the market is starting to overheat. You need to verify this on country level for the biggest crypto markets. If you look closely, the current trend spikes are sharply driven by smaller markets like Nigeria.

Expert opinions are only as good as the data behind them. Trust is a valuable commodity, take special care where you place yours.