How Many Cryptocurrencies Are There to Buy?

There are 1,381 cryptocurrencies listed on, but not all of them are worth buying.

But the number of cryptocurrencies and investment dollars going into them is no surprise considering the staggering gains these coins can bring.

Just look at these returns:

Cryptocurrency Price Jan. 1, 2017 Price Jan. 1, 2018 Profit
Ethereum $4.33 $755.76 17,354.04%
Litecoin $7.98 $231.67 2,803.13%
Bitcoin $963.66 $14,112.20 1,364.43%

And that's just the start of how profitable the cryptocurrency market could be...

how many cryptocurrencies are there to buy

Currently, cryptocurrencies have a market cap of $658 billion.

But by 2018, billionaire trader Mike Novograntz believes the crypto market cap will reach $2 trillion.

Remember, that market cap will be made up of more than just Ethereum, Litecoin, and Bitcoin.

That's why those other 1,378 altcoins look so appealing.

And because more and more investors will look for less expensive cryptocurrencies than the ones mentioned above, we wanted to share two important tips our readers need to know.

But we also want our readers to be aware of the hazards involved with buying cryptocurrencies...

Investing in this market is very risky. The price of a well-known coin like Bitcoin could climb to $50,000 just as easily as it could collapse to $5.

Like with any investment, never risk what you can't afford to lose.

And to limit risk, investors have to perform their due diligence before making a decision on whether to buy a crypto coin.

Unfortunately, the amount of information to review can be overwhelming, and a lot of investors don't even know where to start looking before making a decision.

That leaves people making a hasty decision they could end up regretting, or they will sit on the sidelines and watch other people get rich.

That's why today, we want to simplify the process of buying cryptocurrencies for Money Morning readers with two easy-to-follow strategies for crypto investing from our Cryptocurrency Expert David Zeiler.

And by following Zeiler's roadmap, Money Morning readers can make smarter cryptocurrency investments.

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The first strategy is evaluating the leadership behind a coin, which will help you avoid scams.

That's important, since we've seen the prices of cryptocurrencies that have a strong leadership team climb between 281% and 2,803% in the last year...

Know the Team Behind a Cryptocurrency Before Investing

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Back in November 2017, a cryptocurrency startup raised $375,000 through an ICO. The company, Confido, labeled itself as a "smart contract" startup.

On Confido's website, CEO Joost van Doorn was listed as having a Master's degree in international business with previous work experience at eBay Inc. (Nasdaq: EBAY) and PepsiCo Inc. (Nasdaq: PEP).

But the company's website, Twitter Inc. (NYSE: TWTR) account, and Facebook Inc. (Nasdaq: FB) page were erased as of Nov. 22, 2017.

More importantly, the $375,000 and CEO had also vanished.

By taking all of the funds and not having a working project, the Confido coin would be worthless. Fortunately, Confido bought back all Confido tokens for a nominal fee on Dec. 23, 2017, according to a release from Jonkers & Van Gemert Advocaten, a law firm representing Confido.

CNBC reached out to eBay and Pepsi to try and verify Doorn's claims of working there, but there was no response at the time of the Nov. 22, 2017, article.

Even if Doorn did work at those companies, he never specified a position he held there. He could have just been an intern or he could have worked at those companies for less than a year.

That's why Money Morning readers should only invest in cryptocurrencies with strong team members that have track records of success in previous roles and positions that can be verified.

Litecoin creator Charlie Lee, for example, was a former engineer at Alphabet Inc. (Nasdaq: GOOGL), as well as the former director of engineering at the cryptocurrency exchange Coinbase. Lee not only has high-level technological experience, but also direct experience in the crypto world, so potential investors know he's capable.

Another example of a strong leader of a crypto company is Brendan Eich. He created the programming language JavaScript, which makes webpages interactive and is used by the majority of websites today.

He now runs a blockchain-based digital advertising company that created a cryptocurrency called BAT.

BAT prices have climbed from $0.16 on June 1, when first started covering the price, to $0.61 today, a gain of 281.25% in seven months.

Now, having a well-qualified leadership team isn't enough to make a coin's price surge on its own, but these coins aren't at risk of a Confido-like disaster.

Aside from strong leadership, a crypto company also needs to have realistic goals and expectations of what it can accomplish...

Avoid Impossible Promises and Look for the Real Deal

Zeiler said a major warning sign with companies promoting a new coin is too-good-to-be-true claims.

"It's very unlikely, for instance, that a new token will be 'bigger than Bitcoin.' Also watch out for outsized claims of what the crypto token will do, such as 'change the way' some sector operates," Zeiler said.

What investors should look for is companies with working projects or plans with timelines of how long it will take to get a project off the ground.

For example, FunFair uses blockchain technology to simplify the setup and reduce costs of running an online casino. The company's FUN token can be used to play casino games, as well as in-app purchases for freemium casino games, according to the company's website.


FUN Token

FunFair isn't claiming to be the next Bitcoin, and unlike other coins, it has the infrastructure to launch a service for potential customers.

If companies and individuals start creating online casinos and accept FUN as payment, the use of FUN tokens could increase.

As more tokens are used, the demand increases, which can help prices climb.

The FUN token trades for $0.08, and it's climbed 370.58% since started covering it on June 27, 2017.

The Bottom Line: Not all cryptocurrencies are worth investing in. The ones that are will have a strong leadership team, and the creators of the coin won't overpromise what it can do. A cryptocurrency should solve a problem, which will increase its demand, which can help prices climb.

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