Unlike stocks, there are no disclosure rules governing cryptocurrencies. And while some metrics are available to help you evaluate an opportunity in crypto, they’re not always reliable.
That can make it challenging to sort the good projects from the bad, especially for new investors.
After I got into this space, I quickly realized folks – including myself – needed a way to filter out the junk coins and identify the best cryptocurrencies to invest in.
That’s how my Five Ts of Crypto Investing was born.
It’s my tried and true method for maximizing profits and minimizing losses in crypto.
If you’ve tuned into Alternative Wealth Daily LIVE this week, you know I’ve been talking a lot about my Five Ts framework and how you should use it to evaluate any new crypto before you spend your hard-earned money.
So, today, I wanted to make sure you have your own copy of the Five Ts formula that you can bookmark – including a scorecard you can print and start using immediately and an example of how I would use it to evaluate one of my favorite assets.
That way, you can head into the weekend with everything you need to find your next big cryptocurrency investment.
My Five Ts Scoring System for Evaluating Any Crypto Investment
For each of the following “Ts,” rate the cryptocurrency on how well it answers the corresponding questions, with 5 being the best possible score and 1 being the worst.
Once you’ve scored each section, add all of the ratings together, and don’t put your money into any project that has a score of less than 18.
To help you along, my team even made a scorecard that you can print and use any time you evaluate a new crypto against the Five Ts.
Weight each of these metrics against their ability to achieve use, utility, and wide-scale adoption…
- Can you trust this team to take you as an investor along a clearly defined path to profit?
- Can the team be trusted?
- Would you let your children hang out with the founders?
- Do you like the founders and early advisors/investors/partners?
- Would you loan them money?
- Do they have the business background to get this done?
- Do they have the depth in technology and software developers to get this done?
- Does the software and the future plot of iterative upgrades to that software make sense?
- If it’s a protocol, are they inventing some new kind of consensus mechanism?
- Are they making guarantees that seem unrealistic?
- Are they trying to solve a problem that has already been solved?
- If it is a decentralized application or some kind of scaling solution, is it achieving that in an elegant way or an overly confusing way?
- Given T1 and T2, does this project fit within the technological landscape at the current time? Ask yourself, “does this project makes sense based on the technology right now?”
- Is it too early, and they will have to reinvent physics?
- Is it too late, and technology and software have passed them by?
- Has Web 3.0 passed them by?
- It’s important to understand the distribution of tokens, the allocations/lockups/distribution schedule to the different groups – founders, seed investors, friends and family, venture capital, private sale, public sale…
- How many tokens are there?
- Is there a cap on supply?
- Is there some expansion mechanism?
- Is it inflationary or deflationary?
“Why Token?” (T5)
- Always ask yourself – why is there a token?
- What problem does it solve?
- Could all of this be accomplished with an existing token, perhaps even an existing protocol layer base asset?
Using the Five Ts – Real-World Examples
Now that you have my Five Ts formula, I’ll show you how I would use it to evaluate Cardano (ADA) in the video below:
You can also check out my team’s full Five Ts analysis Algorand (ALGO) right here.
Until next time,
Chief Crypto Strategist, Alternative Wealth Daily
9 responses to “Use This Simple Test to Find the Best Buys in Crypto (Scorecard Included)”
March 04 2022