If you’re thinking of investing in crypto then the first thing that you have to know is how to do your own research. I’m going to share with you guys my personal experience and how I do my own due diligence before I invest my hard-earned money in any crypto tokens.
By the way, before we continue, please be reminded that this is not financial advice (NFA) and should not be treated as such. I’m just sharing my personal experience in crypto trading and investing.
Anyway, going back to the topic, I started investing in crypto last February 2021 and I vividly remember the overwhelming feeling that I got once I got my Binance account approved.
I didn’t know where to start. There are so many crypto tokens to look at and to choose from. Luckily for me, I have some friends who are in the same boat as me and we always call each other to share information that we have.
Looking back, it’s not a very ideal situation especially if all of you are newbies. There’s a huge tendency that you’ll be influenced by incomplete information (or wrong information) and you might make some avoidable mistakes because you FOMOed or got swayed by the decision of your friends.
Table of Contents
What Information to Look For?
It’s very difficult to start looking for something if you don’t know what you’re looking for. I suggest that you consider these questions before you start your DYOR process.
- What is it trying to do? What problem is it trying to solve?
- What are its existing competitors?
- How does it fare against its competitors?
- What are the previous, current, and future development plans (Roadmap)?
- Have they delivered what they have promised (projects, apps, etc)?
- Who are the people behind this token and what other projects have they been involved in in the past?
- Are the people developing and managing this token worthy of your trust?
- Do they have a strong online presence (website, social media, etc)?
- How did their token perform since they started? What is their market cap?
- What are the risks involved in investing in their token?
- What are the pros and cons of investing in them compared to their direct competitors?
- How is their technology being adopted/used by their target customers?
These are just some of the questions that you should ask yourself when researching a crypto token. I’m sure that there will be a lot of other questions that will come up as you go along.
Where to Look for Information?
Now that you know what you’re looking for, the next step is to try to find that information. So, where do you begin?
All crypto projects have their official websites where they link all their other online presence. This is the first thing that you should look for when researching for a token that you are thinking of investing with.
The first few information that you should look for on their website are:
- Project Roadmap
- Press Releases
Twitter is what I consider as my main social media account and I use this to update myself with various crypto information that I need. What I do is I follow the accounts of the following:
- Official Twitter account of the crypto project
- Twitter accounts of the people involved (CEO, Marketing, Devs, etc)
- Crypto information websites
I also follow the Twitter accounts of other projects launching on the blockchain of the crypto that I’m investing in.
And, I also follow Binance on Twitter and CZ (CEO) since Binance is the main crypto exchange that I use.
If I see a Twitter account that frequently posts about the project that I have invested in, I follow it too. I also follow some accounts that give constructive criticism or a contrarian view of the projects that I follow. This is to ensure that I just don’t receive one side of the information that I need.
Please be careful of paid ‘shillers.’ You can easily notice this by reading the threads and conversations on Twitter. Look for Twitter accounts that always provide objective information about the crypto token that you’re planning to invest in.
I use YouTube to educate myself on how to use the protocols or the apps of the crypto tokens that I have invested in. I also use YouTube to familiarize myself with other crypto tokens that I’m planning to invest in in the future.
One YouTube account that I watch frequently is Coin Bureau.
Again, just like Twitter, please be careful which Youtube account you will subscribe to. There are so many informational and unbiased accounts that exist on YouTube and you should follow them instead of the accounts that do not seem to provide objective information.
Learn how to double-check facts as you go along.
Coin Marketcap and Coin Gecko
Some of the information that you can get from both of these websites include (but are not limited to):
- Historical chart
- Official website links
- Link to the crypto whitepaper
- Which crypto exchanges offer a particular crypto
- And more!!!
I also bookmarked a lot of Reddit Community Pages for the crypto tokens that I have invested in/will invest in. This is one of the most important sources of information for me because I consider this as the online community of those who also invested in the token.
One of the most valuable pieces of information that I get here includes:
- Updates about the crypto project
- Scam alerts
- Airdrop news
- Global news links that might have a positive or negative effect on the crypto project
Crypto News Websites
Crypto news websites are great sources of information. However, it can get overwhelming sometimes. What I do is I just subscribed to their Twitter accounts and didn’t subscribe (for now) to their newsletters.
Some of the crypto news websites that I follow include:
- Bitcoin Magazine
- Coin Desk
- Coin Telegraph
Aside from crypto news websites, I also follow other mainstream news websites on Twitter to keep myself updated with possible global situations that could affect my crypto investments.
Important Tips that You Should Know
Avoid Paid Online Groups
I highly suggest that you avoid paid online groups especially if you’re a beginner. This is to prevent you from being too dependent on someone else’s opinion/research about a particular project.
When you avoid paid online groups, you will also help yourself hone the skills needed to become a savvy crypto investor.
Be Wary of Scams
Crypto is a new (relatively) industry. Regulations are not yet set in various countries and a lot of unscrupulous people are taking advantage of this.
Be very wary of scams and the best way to protect yourself is by becoming aware of the existing scams and how they operate. Usually, this information is being shared on Twitter and on community groups such as Reddit.
Some of the scams that have been reported by other crypto investors include:
- Fake websites of DeFi protocols
- Pump and Dump schemes
- Phishing Text and Email Messages
- Paid Shillers/Promoters
- Fake Twitter Accounts of Customer Service Teams of various crypto products and services
- Fake Twitter/Reddit Accounts sending DMs
- Anyone asking for your wallet’s mnemonic seed phrase
- Scammy Twitter Groups
- And more…
Please, please keep yourself updated with the existing and possibly upcoming new tricks of these scammers. By keeping yourself updated, you will be able to secure your hard-earned money!
It’s Your Money
I have been noticing lately on Twitter that some people are blaming others for the losses that they have incurred. Sadly, these people put their trust in some crypto influencers, and allegedly, they have lost their money by believing the ‘calls’ of these influencers.
In order to avoid going through the same situation, always remember that it is your money, it is your decision and it is your accountability.
Personally, I have experienced something similar when I was just starting. I also have lost some of my investments because I believed something that I saw online.
Looking back, I can only blame myself for being lazy and for being influenced so easily. This was because I did not do my own due diligence.
Once I started owning up to my own actions and decisions, the stress in crypto investing became less. Perhaps because I am now spending a lot more time researching for any crypto project before I invest my hard-earned money in it.
This is a continuous process
Crypto is a fast-moving space. Since this is a new industry, there are so many changes that are happening on a daily basis.
Keep in mind that this is also a global type of investment and any major news could have an effect on your chosen crypto project.
Keep on learning and keep yourself updated!
It’s OK to Take Profit
One of the things that I have also learned in my experience is that it’s okay to make a profit. Some people call others out for taking profit but remember, as I have said earlier, it’s your money, it’s your decision and it’s your accountability.
If you think (based on all the information available to you) that making a profit is the best decision for a particular time frame then do so.
If you think that holding on to a token (again, based on the information that you have gathered) is a better option, then do that.
No one knows what the future holds and it’s okay to think about the present moment, especially if the profit will be used for something very important in your life.
Learn How to Manage Your Emotion
To be honest this is easier said than done. Looking back on my past year of active learning and investing in crypto, I can attribute most of my losses to my emotions.
I have FOMOed in, I have sold prematurely at a loss, etc just because I was quite emotional with my investment decisions. It’s not only money that I lost, I have also incurred unnecessary stress in the process.
Now, I can say that I’m a bit more relaxed with my decisions. Primarily because I have kept on educating myself with the things that I need to know.
Only Invest What You Can Afford to Lose
This is not only true for crypto but it’s also true for any other type of investment. In order to avoid unnecessary stress in your life, avoid investing money that you can’t afford to lose.
Do not make loans or make any investment based on leverage especially if you’re just a newbie. This is a recipe for a financial disaster.
This tip has been shared numerous times in all the online communities that I frequently visit and yet, many people are still committing the same mistake.
Perhaps we can also attribute this to our unmanaged emotions.
Sometimes, we see online (on Twitter and perhaps on some news outlet) about people who made huge gains in a very short amount of time. Some people made thousands of dollars and some even made millions of dollars on their crypto investments.
Whenever we see posts like these, some key information is sometimes not mentioned such as:
- Price entry point
- Overall financial standing
- Diversity of their investments
- Varying life situation
I’m not invalidating their success. I’m glad that people are finding amazing financial success in crypto in such a short period of time.
I’m just saying that FOMOing just because you see someone made considerable gains might not always be the best idea.
Again, always do your own due diligence before you invest in anything.
DYOR is a continuous process and something that you should not skip when investing in crypto. Yes, it’s time-consuming and of course, it can be a bit overwhelming, especially in your first 3 – 6 months, but this is the best way to keep yourself free from unnecessary stress and this is also the best way to protect your hard-earned money.
If you’re planning to try how to DYOR, I suggest that you start with any of the crypto tokens shown below. This is the list of Top 10 Crypto on Coin Marketcap (based on Market Cap as of the time of writing).
I apologize if the first two are not shown (my laptop screen is a bit small). The first one is, of course, Bitcoin and the second one is Etherium.
If you want to start practicing your DYOR skills, try to do your own research on any of the crypto shown on the screenshot except the stable coins ( USDT and USDC).
How to Do Your Own Research (DYOR) in Crypto Click To Tweet
Do you have additional tips to share? Feel free to share your recommendations and suggestions in the comment section below.