Digital Asset Selection Guide: Analysis of Mainstream Cryptocurrency Types and Investment Strategies

The Status of Cryptocurrency in the Current Financial Environment

In an era of increasing volatility in global financial assets, besides traditional hedging tools, a wide variety of cryptocurrencies have emerged, becoming an important option for diversified asset allocation. Compared to traditional assets, digital assets offer advantages such as higher liquidity and privacy, and are gradually gaining attention from institutions and individual investors. However, with thousands of cryptocurrencies available, how should investors choose? This article analyzes the characteristics of leading mainstream coins by market cap and shares practical investment strategies and insights.

Core Logic Behind Choosing Types of Cryptocurrencies

A classic saying circulating in the crypto community is: “In a bull market, chase high-risk coins; in a bear market, stick to mainstream coins.” The underlying logic is simple and practical—

Bull Market Strategy: High-volatility altcoins are more likely to see rapid price increases, attracting investors seeking high returns; mainstream coins, due to their large market cap, find it more difficult to experience sharp price surges.

Bear Market Strategy: Mainstream cryptocurrencies, recognized by the market, have relatively controlled risks and exhibit resilience; altcoins face the risk of losing all value.

Therefore, when choosing cryptocurrencies, the primary consideration is the current overall market trend—determining which phase of the bull-bear cycle we are in. Additionally, factors such as fame, trading volume, liquidity, volatility characteristics, and practical applications should be evaluated from multiple dimensions.

Analysis of the Mainstream Cryptocurrency Landscape

The top-ranked digital assets by market cap often represent the market consensus strongest on certain projects, usually with better fundamentals, industry leadership, and acting as industry barometers. Here is the current market status of mainstream cryptocurrencies by market cap:

Important Note: The above rankings are not permanent and are adjusted dynamically with market changes. Previously top ten projects like Filecoin, Luna, Polkadot, etc., have declined due to shifts in market narratives. Investors chasing trends have suffered heavy losses. This warns us that selecting cryptocurrencies requires caution—avoid extreme strategies like “bet everything on a single asset.”

Mainstream Cryptocurrencies Worth Deepening Understanding

Bitcoin (BTC) — The Representative of Digital Gold

As the king of crypto assets, BTC has the longest history and broadest recognition, consistently accounting for over 50% of the entire market share. Since the approval and listing of spot ETFs in 2024, its price trajectory has become even more robust.

Core Strengths: Fixed supply of 21 million coins, with a halving mechanism every four years leading to deflationary characteristics; current inflation rate is below 0.80%. This scarcity makes it a preferred asset for hedging against inflation.

Ethereum (ETH) — The Heart of the Smart Contract Ecosystem

Although its market cap is less than Bitcoin, Ethereum attracts developers worldwide due to its smart contract functionality, spawning a vast application ecosystem. Its transaction volume often reaches 60-70% of BTC, demonstrating deep practical application. Currently, Ethereum’s total value locked (TVL) reaches $93.1 billion, ranking first among public chains. With the launch of spot ETFs and staking applications, institutional capital continues to flow in.

Core Strengths: Rich application scenarios, mature ecosystem, and a combination of market cap and application depth.

TAO Token (TAO) — The Integrator of AI and Blockchain

With the surge of artificial intelligence, integrating AI with blockchain has become a market focus. Bittensor provides a peer-to-peer machine learning service marketplace, where TAO tokens enable users to purchase AI model services on nodes. Its design references Bitcoin, with a fixed supply of 21 million and a gradual deflation mechanism.

Core Strengths: Closely aligned with the hottest AI trends, with high technological innovation and market demand.

Ripple (XRP) — The Choice of Financial Institutions

Operated by Ripple Labs, XRP has established partnerships with many governments and financial institutions worldwide, greatly enhancing institutional recognition. In transaction speed, XRP’s theoretical throughput reaches 1,500-3,400 transactions per second, with actual operation maintaining 500-700 TPS, far exceeding Bitcoin’s 7 TPS.

Core Strengths: Strong institutional backing, superior transaction efficiency, and a financial-grade application experience.

Solana (SOL) — The High-Performance Practitioner

Known as the “Ethereum competitor,” Solana achieves a theoretical throughput of 65,000 transactions per second through parallel processing and other technologies, with real-world performance around 3,000-4,000 TPS. Transaction costs are extremely low, averaging only $0.00025, offering excellent cost-performance. Compared to Ethereum’s 15-30 TPS, Solana demonstrates a significant advantage.

Core Strengths: Outstanding transaction speed, very low fees, and optimal user experience.

Other Notable Cryptocurrencies

Chainlink: Unique in connecting blockchain with real-world data; its oracle network allows smart contracts to securely access off-chain information, serving as an essential infrastructure. Unlike air coins, Chainlink provides actual functionality within the network, with clear market demand.

TON and DOGE: The former backed by the Telegram ecosystem; the latter supported by Musk’s continuous endorsement. These “persona effects” drive up prices in community-driven ways, leading to high volatility.

Classification System and Investment Strategies for Cryptocurrencies

Based on market cap, cryptocurrencies can be divided into mainstream coins and altcoins; based on volatility, into stablecoins and non-stablecoins.

Relationship Between Market Cap and Risk: The top ten coins by market cap are recognized as mainstream coins, followed by altcoins. Mainstream coins, due to their large market cap and high recognition, attract more capital and show strong resilience in bear markets. During downturns, high-risk altcoins are usually sold off, with funds flowing into mainstream coins—this is the fundamental reason why mainstream coins are less likely to go to zero. From a safety perspective, mainstream coins are more suitable for long-term holding over four years (a full bull-bear cycle).

Limitations of Stablecoins: USDT and USDC are pegged 1:1 to USD, with minimal fluctuations (usually less than 1%), making them unsuitable for significant investment returns, serving mainly as cash reserves.

Opportunities in Non-Stablecoins: BTC, ETH, TAO, XRP, DOGE, SOL, etc., have shown substantial gains in each bull cycle, with the most investment potential. For example, XRP lagged in the last bull market due to regulatory pressures, rising from $0.2 to $1.8 (an 800% increase), while BTC increased by about 1800% in the same period.

Short-term vs. Long-term Considerations: The above analysis is based on long-term spot holding but also applies to short-term trading. Mainstream coins, due to their large market cap, are less susceptible to manipulation, effectively reducing abnormal price volatility risks. Conversely, altcoins, especially new ones, are often controlled by project teams, making retail investors vulnerable to liquidation risks.

Practical Investment Tips and Insights

Beginners Are Better Off with Long-term Investment Strategies

Short-term trading is highly challenging for beginners—lacking systematic trading strategies, position management skills, and psychological resilience. Long-term investing is simpler; just mastering basic buy/sell operations and understanding market cap levels is enough to get started.

Holding Long-term Can Yield Higher Returns

Theoretically, short-term trading can bring higher returns (buy low, sell high continuously), but it requires precise market prediction each time. In reality, investors often miss opportunities due to misjudgment or fall into a vicious cycle of overbuying and overselling. Conversely, long-term holding advocates steadfast positions, automatically locking in profits from upward trends and avoiding the risks of frequent trading.

Asset Security Is the Top Priority

Enduring the bear market to reach the bull market is hard enough; having assets stolen overnight would be a huge tragedy. Protect your trading account passwords carefully; if storing assets in wallets, manage private keys or seed phrases securely, and stay away from suspicious applications.

Beware the Temptation of Altcoins

Beginners often make a fatal mistake—being lured by low-priced altcoins. Seeing prices with many zeros, they imagine that if the price rises to one cent or one dime, holding millions or billions of coins could make them rich. The harsh reality is that most of these altcoins go to zero or are already on that path. Even more dangerous is exchanging mainstream coins for these junk coins, risking total loss of capital.

Choosing the Cryptocurrency Types That Suit You

This article provides a list of the top ten cryptocurrencies by market cap, covering mainstream coins, altcoins, stablecoins, and non-stablecoins. Stablecoins are mainly used as value storage tools, while BTC, ETH, SOL, and other 8 non-stablecoins are worth considering for investment.

However, the digital asset market is highly volatile, with rankings constantly changing. Investors should choose suitable projects flexibly based on their trading goals.

Conservative Investors: Focus on the most well-known BTC and ETH.

Growth-oriented Investors: Besides BTC and ETH, consider mainstream coins like DOGE, ADA, SOL.

Speculative Participants: MEME coins and emerging altcoins are highly volatile; monitoring the market constantly is necessary. This article does not recommend them.

Regardless of which cryptocurrencies you choose, avoid common mistakes—unclear goals, lack of stop-loss, long-term holding of altcoins without strategy—otherwise, you will keep paying market tuition fees.

Long-term holding of cryptocurrencies does not require frequent monitoring, saving time and effort; reducing trading operations can lower transaction fees. While short-term trading offers higher potential returns, it also involves higher risks, especially with leveraged contracts that can easily lead to liquidation. Beginners should avoid such high-risk strategies and find a balance between long-term and short-term approaches based on their risk tolerance and market conditions.