Building a Cryptocurrency Investment Portfolio from Scratch: A Guide to Selecting Mainstream Coins and Trading Strategies

The volatility of cryptocurrencies has attracted a large number of investors seeking diversified asset allocation options. However, faced with thousands of coins, how can one identify which ones are worth关注？This article will analyze the characteristics of mainstream coins with leading market caps and reveal investment strategies under different market environments.

Logic of Coin Selection in Bull and Bear Cycles

There is a saying circulating in the crypto community: “追風口 in a bull market, accumulate small positions in a bear market.” The core logic of this strategy is not complicated—

During upward cycles, investors tend to allocate to small-cap coins, hoping for multiples of returns. Small coins are prone to rapid price increases, while mainstream coins have relatively limited growth space. Conversely, when the market is in a downtrend, investors turn to mainstream coins to protect their principal. Mainstream coins, due to their large base, institutional holdings, and high market recognition, rarely go to zero even in bear markets, whereas small coins face significant devaluation or even extinction risks.

Therefore, the first step in choosing coins is to judge the current market trend. Next, evaluate multiple dimensions such as the coin’s notoriety, trading volume, liquidity, volatility, and practical application scenarios.

Current Mainstream Coins Panorama

Market cap rankings often represent industry consensus. These coins not only have excellent project quality but also serve as industry leaders. Here is an overview of the current mainstream coins:

It is worth noting that rankings are not fixed. Projects like Filecoin and Luna, once in the top ten, have been pushed out successively, reflecting the dynamic changes in market narratives. New investors often blindly chase hot spots at the time, ultimately paying for high risks.

In-depth Analysis of Eight Long-term Worthy Mainstream Coins

Bitcoin(BTC): The Foundation of Crypto Assets

As the first blockchain application, Bitcoin has been around for 16 years. Its market share remains stable at around 55%, occupying an absolute dominant position in the industry.

BTC’s core advantage lies in scarcity—total supply is only 21 million coins, with a halving event every four years, leading to increasingly obvious deflationary effects. Recent data shows that the current inflation rate is below 0.80%. Since the approval of spot ETFs in 2024, institutional funds have continued to flow in, further strengthening its asset status.

For long-term investors, Bitcoin is the most defensive choice.

Ethereum(ETH): The Core of Smart Contract Ecosystem

Although Ethereum’s market cap is not as large as Bitcoin’s, its trading volume often reaches 60-70% of BTC’s. The key reason is its open smart contract platform that attracts millions of developers building applications.

According to real-time data, the total value locked(TVL) in Ethereum’s ecosystem reaches hundreds of billions of dollars, ranking first among all public chains. This indicates a large amount of capital circulating within the Ethereum ecosystem, forming a strong network effect. ETH has also gained support from spot ETFs, and several institutions are applying for ETF staking functions, which will further enhance its attractiveness.

TAO Coin: The Intersection of AI and Blockchain

With explosive development of artificial intelligence technology, integrating AI with distributed networks has become a new narrative focus. TAO Coin’s behind-the-scenes network, Bittensor, aims to create a peer-to-peer machine learning service marketplace. Users can purchase AI model services on nodes using TAO.

TAO’s design draws inspiration from Bitcoin, with a fixed supply of 21 million coins and a gradual emission mechanism. The current price is $209.20. This project precisely captures the hottest AI trend.

Ripple(XRP): The Bridge for Institutional Channels

Ripple, the company behind XRP, has established deep cooperation with hundreds of government agencies and financial institutions worldwide. This provides XRP with a unique institutional endorsement.

Technically, XRP’s theoretical processing speed reaches 1500-3400 transactions per second, with actual maintained speeds of 500-700 TPS, far exceeding Bitcoin’s 7 TPS. This makes it an ideal choice for enterprise-level cross-border payments.

Solana(SOL): The High-Performance Challenger

SOL is called the “Ethereum competitor” due to its excellent performance. Using a parallel processing architecture, SOL’s theoretical throughput can reach 65,000 transactions per second, with actual stable performance around 3000-4000 TPS, far surpassing Ethereum’s 15-30 TPS.

What’s more attractive is its ultra-low transaction fee—averaging only $0.00025 per transaction. The combination of high performance and low cost makes SOL a top choice for on-chain applications. The current price is $122.14, with a circulating market cap of $68.71B.

Chainlink(LINK): The Data Hub of the Real World

Chainlink’s unique value lies in being a bridge between blockchain and real-world data. Its Oracle network enables smart contracts to securely access off-chain data sources, possessing an irreplaceable infrastructural attribute.

Unlike air projects, Chainlink has actual functional value within its network, with clear market demand.

DOGE and TON: Community-Driven Outliers

Dogecoin’s longevity is due to Musk’s multiple endorsements and spontaneous community promotion. Whenever he posts support, DOGE’s price experiences sharp fluctuations.

TON Coin, developed by the Telegram team, also attracts attention due to the influence of its founder. Although these projects lack traditional technical advantages, the power of their communities and celebrity effects should not be underestimated.

Mainstream Coins vs. Small Coins: The Balance of Risks and Returns

Mainstream Coins’ Defensive Advantages

Top ten market cap mainstream coins have unparalleled safety margins. Their large market caps mean they are difficult to manipulate, and their prices fluctuate relatively rationally. From a long-term holding perspective(4+ years, covering full bull and bear cycles), mainstream coins almost have no risk of going to zero.

Limitations of Stablecoins

USDT, USDC, and dollar-pegged assets generally fluctuate less than 1%. This makes them suitable as cash reserves but difficult to generate significant investment returns.

Traps of Small Coins

A common fatal mistake for beginners is being attracted by the low price of small coins. Seeing coins with many zeros behind the price, beginners fantasize about getting rich just by reaching one cent. Little do they know, most small coins will eventually go to zero or are on the way there. Even scarier, project teams or exchanges may manipulate prices, causing ordinary investors to be liquidated.

Beginners often exchange high-market-cap mainstream coins for a bunch of junk coins, ending up empty-handed on both ends.

Investment Strategies for Different Styles

Conservative Investors

Prioritize Bitcoin and Ethereum, the two largest and most consensus coins. Consider a allocation ratio of 60% BTC + 40% ETH, hold long-term without change.

Growth Investors

On top of BTC and ETH, consider adding other mainstream coins like SOL, XRP, DOGE. It’s recommended to keep 70% of funds in top-tier coins and 30% exploring other opportunities.

Trading Investors

Besides long-term holdings, they can also use short-term volatility for trading. But beware, leverage trading is extremely risky and can easily lead to liquidation, not suitable for beginners.

Practical Trading Guide

Purchase Channels

The most direct way is to register an account on a crypto exchange, complete identity verification, and link a payment method. The usual process is to buy stablecoins(USDT/USDC) via fiat, then exchange for target coins in the spot trading area. BTC and ETH are more special; they can be bought directly via C2C.

Besides spot trading, exchanges also offer futures, leveraged tokens, staking, and other derivatives.

OTC Trading

If you dislike the complexity of exchanges, consider OTC trading. The simplest way is to buy from trusted acquaintances, but face-to-face transactions are recommended to reduce risks.

Long-term Holding Challenges

In theory, long-term holding is simple—just buy and hold. But in practice, rising prices tempt you to take profits, while falling prices tempt you to sell for stop-loss. This psychological game repeatedly disrupts your plan.

The solution is to set clear investment goals and timeframes, separate long-term and short-term funds, and consider transferring long-term assets to cold wallets( hardware wallets) for physical isolation, cutting off the temptation to “touch” at the source.

Common Investor Mistakes

Mistake 1: Chasing zero-value small coins

Animal coins, MEME coins are highly volatile and speculative. Beginners are often fooled by low prices, ending up as bagholders.

Mistake 2: Concentrating all in a single coin

Even if you are optimistic about a certain coin, risk diversification is necessary instead of putting all your capital into one basket.

Mistake 3: Lacking stop-loss awareness

Refusing to cut losses when losing, turning small losses into big ones. Set stop-loss points in advance.

Mistake 4: Blindly following trends

Investing impulsively based on others’ recommendations, ending up as a bagholder. Investment decisions should be based on your own research and judgment.

Mistake 5: Ignoring security protections

Persisting from bear to bull markets with joy, only to have your account hacked and lose everything. Protect passwords, private keys, seed phrases, and other sensitive information. Avoid interacting with unknown DApps.

Summary: Choose the Investment Path That Fits You

The crypto market is constantly evolving, with rankings and patterns continuously adjusting. The key is to learn to select suitable coins based on market cycles and your own risk tolerance.

For beginners, Bitcoin and Ethereum are the safest starting points. They represent industry consensus and value support.

For investors with some trading experience, explore other options like SOL, XRP, DOGE within the mainstream framework, but avoid over chasing small coins.

Long-term holding not only saves effort and fees but also effectively avoids the pitfalls of short-term trading. Historical data shows that patient investors often reap the most substantial returns during bull markets.

No matter which path you choose, the focus should be on clarifying goals, managing risks well, protecting assets, and finally waiting patiently for the market to give answers.