The beginning of bitcoin and its rapid growth caused an influx of multimillion-dollar investments into cryptocurrencies. This phenomenon can be characterized as the greatest opportunity for investment in the last few years. Now there are a large number of different cryptocurrencies, the market capitalization of which reaches 281 billion dollars. The consequence of the great demand and volatility was that many brokers around the world began offering services in the trade of cryptocurrencies. If you looking for cryptocurrencies trading, you need to find a broker. Many resources that make up the rating of such brokers (for example https://btc-rating.com) will help you to make the right choice.
After choosing a crypto broker, there is only one question left: which cryptocurrency to choose for trading? In this article, we will consider several important factors that should be considered when choosing a cryptocurrency.
- Market capitalization
Market capitalization is the price of the cryptocurrency, which is calculated on the basis of the current market (exchange) value. This financial indicator is used to estimate the total value of the market instruments of a currency. Cryptocurrency with a large capitalization is always more stable in the market. But only in case that the amount of capitalization is distributed among a large number of investors. That’s why, unanticipated manipulations with the price are less likely. Simply put, as higher the market capitalization of a cryptocurrency, as more reliable it is.
- Price change charts
According to the price change charts of the cryptocurrency, you can understand the degree of its stability. Best of all, when the course grows slowly but keeps a steadily increasing direction. Sharp jumps in the cost signal that the cryptocurrency is unstable and there is a risk of unforeseen losses. There are three types of graphs: candlesticks charts, line charts, and bar charts. The principle of their work is the same. Each trader uses for trading the kind of chart that is more convenient for him.
- Time of existence in the market
At this point, everything is simple: if the cryptocurrency exists on the market for a long time and doesn’t lose popularity with time, this means that this cryptocurrency is reliable, with stable volatility and traders trust it. Be sure to pay attention to how long the cryptocurrency has appeared on the market. This is very important given the huge number of different cryptocurrencies that have filled the market.
- Turnover
If the daily turnover of the cryptocurrency is large, it means that it is popular. Popularity, in this case, is an important factor, but it is best to use it with the three previous factors because the popularity of the cryptocurrency is directly dependent on its market capitalization and time on the market.
Based on these four indicators, we recommend you pay attention on two cryptocurrencies: Bitcoin and Ripple. Bitcoin is the most popular cryptocurrency in the world with the highest market capitalization (39.9% of the total capitalization of all cryptocurrencies) and with consistently high volatility. Ripple is on the second place in these indicators. It is significantly cheaper than Bitcoin, but today it has a stable value with a clear increasing trend.
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