In-Depth Analysis: Introduction to Virtual Currencies and Investment Options Guide

Why Should You Pay Attention to Crypto Right Now?

Financial markets are highly volatile, with traditional assets under pressure. In comparison, Crypto gradually becomes an important supplement to asset allocation due to its features such as high liquidity, convenient trading, and strong privacy. However, faced with thousands of different Crypto, investors often feel at a loss. This article systematically reviews the characteristics and investment logic of leading market coins to help you build a rational investment decision framework.

Core Logic of Crypto Investment

There is a classic saying circulating in the market: “In a bull market, allocate to altcoins for high returns; in a bear market, switch to mainstream coins to preserve capital.” The logic behind this is not unfounded:

Bull Market Opportunities: Altcoins, with smaller market caps, are more easily driven by capital and can rise rapidly. When market sentiment is high and funds are abundant, these coins often provide multiples or even dozens of times gains.

Bear Market Defense: Mainstream coins, due to their large market caps and huge capital backing, are less easily shaken by single factors. They also have an extremely low probability of going to zero, making them safe havens for risk-averse investors.

Therefore, grasping the current market cycle is the first step in all investment decisions. Next, consider multiple dimensions such as the reputation of the Crypto, trading depth, volatility characteristics, and real-world application, rather than simply looking at the price level.

Overview of Leading Market Coins

Top market-cap Crypto usually have the following features: high market recognition, stable capital inflow, relatively controllable risk, and often are leaders in their respective sectors. Here is a detailed overview of the current market landscape:

First Tier: Absolute Leaders

Bitcoin (BTC) — The founder of the Crypto market, born in 2008, still dominates the market share today. Its core advantages are the fixed supply (21 million coins) and the halving mechanism every four years, which naturally brings deflationary properties. Recently, the US SEC approved spot ETFs, accelerating institutional capital inflow and pushing prices higher. Inflation rate is controlled below 0.80%, making it an important tool against asset depreciation.

Ethereum (ETH) — The pioneer of smart contract platforms, ranked second by market cap. Its value core lies in network effects: a large number of developers build application ecosystems on Ethereum, creating high network stickiness. Data shows that the total value locked (TVL) on Ethereum is as high as $93.1 billion, ranking first among all public chains. Trading volume consistently remains at 60-70% of Bitcoin’s, reflecting its strong trading activity.

Second Tier: Sector Experts

XRP (Ripple) — An international transfer protocol led by Ripple Labs. Its biggest highlight is transaction speed: theoretical capacity of 1,500-3,400 transactions per second, with actual environment maintained at 500-700 TPS, far exceeding Bitcoin’s 7 TPS limit. Backed by Ripple’s cooperation with global financial institutions and governments, XRP has strong institutional endorsement. Current circulating market cap is $113.21B, with a market share of 5.89%.

BNB (Binance Coin) — The ecosystem token of Binance exchange, launched in 2017. As a representative of exchange platform tokens, BNB’s value is highly tied to the development of the exchange. The larger the trading volume, the richer the application scenarios for BNB, and the stronger the demand from investors. Current circulating market cap is $116.04B, with a market share of 3.66%.

Solana (SOL) — Known as the “Ethereum Killer,” a high-performance public chain. Its core advantage is speed and cost: using parallel processing architecture, with a theoretical throughput of 65,000 TPS, and actual operation at 3,000-4,000 TPS, over 100 times that of Ethereum mainnet. Average transaction fee is only $0.00025, offering unparalleled cost-performance. Current market cap is $69.15B, with a market share of 2.39%.

Third Tier: Emerging Sector Players

TAO (Bittensor) — A representative of AI and blockchain integration. Bittensor creates a decentralized machine learning service marketplace where users can buy or sell AI model services. TAO’s design fully references Bitcoin logic: fixed total supply of 21 million, with a deflationary issuance mode. Current market cap is $2.07B.

Chainlink (LINK) — Infrastructure provider in the oracle field. Its mission is to build secure data bridges between blockchain and the real world, enabling smart contracts to access off-chain information reliably. Unlike meme coins driven purely by speculation, Chainlink plays a tangible functional role in the network, with clear market demand. Current price is $12.23.

Dogecoin (DOGE) — An old meme coin born in 2013 rooted in internet culture, but gained unexpected attention due to Musk’s multiple endorsements. Circulating market cap is $21.65B, with a market share of 0.68%.

Cardano (ADA) — The native token of the Cardano blockchain, emphasizing a rigorous academic development philosophy. Circulating market cap is $13.11B, with a market share of 0.50%.

Stable Assets

USDT, USDC — Stablecoins pegged 1:1 to USD. USDC’s current circulating market cap is $76.65B, with a market share of 2.41%. Stablecoins have minimal volatility (usually less than 1%), suitable for cash reserves and trading pairs, not for investment.

The Open Network (TON) — Native token within the Telegram ecosystem, current price $1.48.

Other Mainstream Coins

TRON (TRX) — A content public chain, with a market cap of $26.66B and a market share of 0.84%.

Common Investment Mistakes and Psychological Traps

Mistake 1: Buying “Cheap Coins” to Get Rich Quickly

New investors often fall into price anchoring bias: seeing coins priced at just a few cents, fantasizing that “if it hits $1, it’s 100x.” But reality is cruel: most low-priced coins eventually go to zero, and the few survivors often only see slight increases.

The correct approach is to judge a coin’s relative valuation based on “market cap” rather than “price.” For the same 1 million investment, allocating to a project with a market cap of 1 billion is less risky than one with 10 billion.

Mistake 2: Short-term Trading for “Buy Low, Sell High” Consistent Profits

In theory, short-term trading can yield the highest returns. But in practice, almost no one can predict every move accurately. Countless investors have missed out on skyrocketing rallies due to “buying too early” or “selling too early.”

In 2018, I bought three Bitcoins near $5,000 each, and sold hastily at $7,000. The price then surged to $12,000, leaving me with regret. Fortunately, the 2020 market gave a second chance to get in.

Mistake 3: Long-term Holding = Completely Ignoring Market Fluctuations

Many investors misunderstand long-term holding. They buy and then either do nothing for years or watch charts daily, repeatedly reacting to short-term volatility. The result is often selling too early during rallies or panic selling during dips.

The right approach is: clarify your investment goals, such as “hold for 5 years” or “sell at market top.” Set stop-loss and take-profit points, but don’t be disturbed by daily fluctuations.

How to Choose Between Mainstream and Altcoins

Based on market cap, Crypto can be roughly divided into two categories:

Mainstream Coins — Usually the top 20 by market cap, including BTC, ETH, XRP, SOL, etc. Features are large market cap, good liquidity, less manipulation, and relatively controllable risk. Over a complete four-year bull-bear cycle, mainstream coins are more suitable for long-term investment over 4+ years. During bear markets, capital tends to concentrate here, with extremely low risk of going to zero.

Altcoins — Coins ranked after the top 20 by market cap. Features include smaller market cap, high volatility, often manipulated by project teams or exchanges, high risk and high reward. Beginners should avoid them entirely, and even experienced traders should limit risk within their capacity.

Actual Trading Process for Crypto

Buying through Legitimate Channels

Most investors follow these steps:

1. Register an account on a reputable exchange and complete real-name verification
2. Link bank card or payment method
3. Enter the “Fiat-to-Crypto” section, buy stablecoins (USDT/USDC) via C2C trading
4. Switch to the “Crypto-to-Crypto” section, exchange stablecoins for target coins

BTC and ETH, due to their high recognition, often support direct fiat purchases.

Derivative Tools

Exchanges also offer futures, leveraged tokens, staking, and other advanced tools, but these carry significantly higher risks and are not suitable for beginners. Leveraged trading especially can lead to liquidation losses.

OTC Trading

If you find it troublesome, you can also trade OTC with trusted acquaintances, but ensure the counterparty is reliable, preferably face-to-face.

Strategies for Different Investors

Conservative Investors

If your risk tolerance is limited or you lack time and energy to handle market fluctuations, focus only on BTC and ETH. These are the market leaders and the standard holdings for funds and institutions. Their appreciation potential has been repeatedly proven over time.

Growth Investors

If you have some trading experience and can tolerate higher volatility, diversify your holdings: on top of BTC and ETH, allocate modestly to DOGE, ADA, SOL, and other mainstream coins. This way, you can participate in more market opportunities while keeping risk at a manageable level.

Advanced Traders

Only investors with a complete trading system, independent judgment, and sound psychological resilience should consider altcoins or leveraged trading. Even then, limit such investments to 5-10% of total capital.

Practical Guide for Long-term Investment

Long-term holding sounds simple (buy and do nothing), but executing it is extremely challenging. Here are some practical tips:

Define Investment Goals — Set clear exit conditions before buying, such as “sell after reaching target gains” or “reduce holdings at market top.” Avoid watching and reacting in real-time.

Avoid Temptation — Transfer long-term holdings to cold wallets or hardware wallets to physically isolate from daily trading impulses. Focus more on higher timeframes (weekly, monthly charts), less on intraday charts.

Diversify Funds — Spread your capital across multiple platforms or accounts, with some dedicated to long-term holding and others for short-term trading. This prevents short-term volatility from damaging long-term positions and satisfies trading desires.

Periodic Review — Review your portfolio quarterly or semi-annually to see if adjustments are needed based on market changes. However, avoid over-frequent adjustments—once a year is enough.

Final Reminder

The Crypto market is constantly changing. Today’s top rankings do not last forever. Coins like Filecoin, Luna, Polkadot, which once ranked in the Top 10, have now faded. Their decline often results from changing market narratives or technical challenges.

The three core points of Crypto investing:

1. Avoid blindly following trends or star effects
2. Master basic investment theories and risk management
3. Never gamble recklessly or put all eggs in one basket

Any Crypto you choose should be based on rational analysis, not emotion. Remember: The market is always there, opportunities are always there, no need to rush all in.