Which cryptocurrency to invest in? My findings from analysis of top 200 tokens.

Missed out on Bitcoin and the likes of Ethereum, Litecoin, Ripple? Don’t worry the party is just getting started.

How can I claim that?

After analyzing top 200 (As on 14-Dec-2017) tokens by marketcap on Coinmarketcap.com, these findings help me arrive at the conclusion

• In past three months, 16 coins have yielded a return of >1000%. Here is the list:
  EMC2, DENT, MONA, XRB, XLM, ADA, PPT, TRX, SAN, EOS, VTC, SUB, VEN, POWR, NXT & XVG
  (There are more, but I have included only the ones with Marketcap of >$ 100 million)
  Average marketcap of above coins is $ 2 Billion and median in $ 255 million. This means, they are highly rated projects.

How do we find the next big ones?

• DO NOT try to do that by yourself unless this is your full-time job.
• Seek advice from those who have rich experience in equity trading
• If you ‘feel attracted’ by any token. Check out its last 6-month history on
  a. Twitter
  b. Reddit
  c. Bitcointalk
  d. Steemit
  e. Linkedin and Social profiles of developers and other contributors
• Point above, gives you an idea about marketing side and future potential of the token. It doesn’t help you understand if the team can make it happen. Cause the technology is still nascent and most tokens exist only on whitepapers or as a smart contract on ERC20.
• Next to check is the rate of adoption, i.e. how fast is the token being adopted in respective industries? Like NEO’s application layer is gaining popularity among Dapps developers and this will surely make its competition with Ethereum, healthier.
• If you can find someone who can look into the Github repository of a blockchain or token and give you a technical analysis of how strong a token’s backend looks like. That is the best insight of all. A technical analysis will typically contain,
  a. Stage of development of token or Dapp
  b. Measures for security and scalability

Keep these in mind to avoid going bust:

• Diversify your portfolio for long-term gains,
• Don’t be in it for a short run (Anything less than 2 years is short)
• Don’t invest what you can’t afford to lose. (Most important yet most ignored advice for any kind of financial investment)

The elephant in the room: Is it legal to invest in cryptocurrency?

• Yes, when you buy a token you are not buying a stake in a company. You are buying a product which holds some value and that the value can change over time.
• As per changes in value of a token, you have to pay taxes for income generated. This guide(For Indian taxpayers) here can help you understand how the taxation will work in case of cryptocurrencies.

*Disclaimer: I am working with Bharath, Ashwath, Lakshmeesh and Neelam, under the name of Cryptuna. Cryptuna aims to help build every Indian a cryptocurrency portfolio. And among us, we do hold Bitcoin and some altcoins.

Cheers, Kartik