For instance, websites like CoinMarketCap and CoinGecko provide data about different cryptocurrencies. Other platforms like Tradingplatforms and StockApps provide news on the latest presales and ICOs worth investing in. You may need different opinions and views from multiple sources to gather valuable and accurate information about a coin or crypto project. For instance, you’ll find strong voices in the crypto space across digital and social media channels speaking on different coins to invest in.
DYOR is there to remind everyone that investments are only as good as the research that goes into them — and even then, there is no guarantee of success. Risks represent the natural cost of capital gains opportunities that investment activity offers. The best investors can do is equip themselves with enough knowledge and research to assist in effective decision-making and reduce risks.
Another way to determine a solid crypto project worth investing in is by knowing its development team and advisors. Legitimate crypto projects often disclose their founding teams’ identities, allowing investors to assess their skills, experience, and track records. Instead, you may be investing in a shilled coin with heightened Fear of Missing Out (FOMO) from the project team.
But what exactly does “doing your own research” entail, and how are people doing their due diligence? From this article, you will find out why you should always DYOR before investing and how to go about researching the project that has caught your interest. However, the large and established VCs all use in-house analysts who specialise in finding and vetting crypto projects. As such, when a project receives backing from a big investor, that’s usually a good sign. It is also often used as a kind of disclaimer by some cryptocurrency figures when they post about projects or analysis on social media platforms.
DYOR Tool 5: r/CryptoCurrency on Reddit.com
Technical analysis will help you predict short and long-term price movements of tokens and determine when to buy and sell through candlestick patterns, price charts, indicators, etc. On-chain is important data on the Blockchain network that includes the information of all transactions that have occurred on a Blockchain network. On-chain data helps you to know a lot of accurate, quality data about users’ transactions in the market.
It would be akin to gambling if one were to invest a lot of money in a product without knowing anything about it. Let’s look at some of the main reasons that investors are advised to DYOR. Nicole Willing has two decades of experience in writing and editing content on technology and finance. She has developed expertise in covering commodity, equity, and cryptocurrency markets, as well as the latest trends across the technology sector, from semiconductors to electric vehicles. Warren Buffett, arguably the most successful investor alive, argues that if you don’t feel comfortable holding a stock for 10 years, you shouldn’t hold it for 10 minutes. Accordingly, if you aren’t willing to hold a crypto for a decent length of time, you probably haven’t done enough research to invest in it (unless of course you’re a day trader).
A cryptocurrency created by the pseudonymous developer(s) Satoshi Nakamoto. A digital currency that is secured by cryptography to work as a medium of exchange within a peer-to-peer (P… Of course, where you heard about a given project doesn’t necessarily dictate whether it’s legitimate or not, but it’s a great place to start.
- So, knowing what is DYOR, embrace the principle of DYOR and embark on a journey of knowledge, understanding, and well-informed decision-making.
- They might use it to advise their friends to be cautious and not rely solely on others’ opinions or recommendations.
- Unfortunately, their predictions didn’t turn out to be the coin’s reality, and your investment didn’t 100x as they predicted.
- It’s important to look at a variety of factors, critically analyze the information you find, and stay updated on the latest developments.
- DYOR allows investors to evaluate a cryptocurrency on its merits, understand its risks, and make investment decisions that align with their financial goals and risk tolerance.
- Here, it helps to look at the number of active users, daily transactions, and overall community engagement.
CoinMarketCap is owned by a leading crypto exchange, while CoinGecko has no such affiliation. For some people, it is enough reason to trust CoinGecko data more than they trust CoinMarketCap’s figures. Naturally, it is largely a matter of personal opinion, and CoinMarketCap has rarely been inaccurate in the provision of market data. The website is also a good source of crypto intelligence in the form of podcasts, a newsletter, and industry commentary. While seeking expert information, filter the information you get instead of mindlessly following what the experts say. You should also closely monitor the projects you invest in and other exciting projects to know the latest developments in their ecosystems.
Check the overall market sentiment towards the cryptocurrency by looking at forums, social media, and other sources of information. Take a look at the price history and chart patterns to understand market trends and what macro factors have impacted the price. An added benefit of DYOR is increased confidence in your diversified portfolio. When you invest in multiple crypto projects you believe in, you mitigate risk and spread potential losses across multiple assets.
It’s important to look at a variety of factors, critically analyze the information you find, and stay updated on the latest developments. Before you can effectively research individual cryptocurrencies, it’s important to understand the basics of what cryptocurrency is and how it works. Doing your own research is a way of ensuring that you’re not just following the crowd or getting swept up in the hype of the latest trend. It’s about making informed decisions based on facts and analysis, rather than relying on rumors or speculation. Some people hire professionals to conduct market analysis and project research for them.
What are some common mistakes to avoid when doing your own research?
Each of them serves a somewhat different purpose, but used together, they will help you carry out effective DYOR. A limitation of Google Trends is that less popular smaller tokens may not have enough search volumes to produce reliable results. It is a tool most suited to researching the trends for more widely-known tokens. TVL refers to the total amount locked in the smart contracts of the platform, normally in the form of debt collateral or liquidity pool funds.