In Which Cryptocurrencies To Invest? Complete Guide

Since the appearance of Bitcoin more than a decade ago, many other projects have been added to the crypto ecosystem. For a person starting out in this world, it is normal to consider which cryptocurrencies to invest in, taking into account the large number of assets that are currently available.

Today there are more than ten thousand projects based on blockchain technology and these keep increasing day by day. Of course, not all of them will succeed or find their place in the market. In fact, the only safe value is Bitcoin itself , since it is the first cryptocurrency and the one that acts as the core of the market.
Given this situation, with the large amount of supply that there is, it is difficult to decide where to deposit our capital once it has been decided to enter this market. The first recommendation is to keep in mind that all Altcoins (the name given to alternative cryptocurrencies to Bitcoin) are like company shares. In other words, these are assets that are bought hoping that the real-life application of a certain project will increase its price.

As we say, with such a large offer and in the case of such a new and changing market, it is practically impossible to recommend a series of specific assets in which it is worth dedicating a percentage of our investment portfolio .

Therefore, it is much more valuable to develop the analytical skills necessary to decide for yourself which cryptocurrencies to invest in according to the characteristics that each one offers. In this way, the decision will be made based on needs and a development of one's own confidence, not by recommendations from other analysts who may not have the same objectives or investment capacity as oneself.

How to know which cryptocurrencies to invest in

As previously mentioned, in this article we are going to develop a complete guide that will serve as a reference when you want to choose a cryptocurrency to invest in. Also, to analyze the different projects in search of those that turn out to be the best opportunities. We emphasize once again that the most important thing is to have confidence and study a certain crypto before investing in it.

To know which cryptocurrencies to invest in, it will be necessary to first study what is the investment capacity you have and what are your objectives for this market. We can mainly analyze the following:

long term investor

If your objective is to buy cryptocurrencies to ' hold ', that is, to save them for the future, the choice of which cryptocurrencies to invest in is very different from whether the intention is to obtain a return in dollars or your national currency in a term short time.

In these cases, without a doubt, the best option is Bitcoin. The investment in the parent cryptocurrency must be between 60 and 90 percent of the total capital invested in digital assets based on the blockchain. In this way, we will be focusing on acquiring the most limited asset on the market and the one whose value over time is most insured.

The rest of the percentage dedicated to Altcoins, even if it is small, must also be distributed among those projects that offer us the most confidence and that meet the best conditions according to the analysis that we are going to recommend later in this article.

As a general rule, it will not be advisable to invest in more than two or three different cryptocurrencies apart from Bitcoin itself. This market is highly correlated, and it is not worth getting overexposed with many assets that are likely to make very similar moves.

However, this is not always so. There are many occasions in which certain Altcoins make independent movements and lose their correlation with the rest of the market for a few days, weeks or even months. We will also analyze all this in depth in the following sections.

short term investor

The way of investing for people looking to speculate on the price in the short term or to trade is very different. In this situation, the characteristics of the project do not really matter much, but rather the current price levels and the signals given by the technical analysis .

Therefore, it is an investment method in which the main objective is to obtain profitability in dollars or the national currency. The important thing will be to develop a good ability to trade and the deep analysis of the projects will not be so important.

In this way of investing in cryptocurrencies, it is also necessary for the investor to develop their own decision-making capacity. Following recommendations from other analysts will always help, but only if this information complements your own analysis. The worst decision that can be made when deciding which cryptocurrencies to invest in is to do it out of synergy with a certain content creator without really knowing what the real situation of the asset is.

In which cryptocurrencies to invest for the next years?

Given all of the above, in the following sections we are going to focus on the analysis of long-term projects as an educational task for all those who are starting out in this beautiful market that offers so many opportunities. But always from a responsible point of view and from a deep analysis of where the capital is being deposited. This is the only way to sleep peacefully when investing in cryptocurrencies and not lose out if the market moves against us.

Since we want this to be the most complete guide you can find on this subject, at the end we will give you a couple of concrete recommendations on cryptocurrencies that have great potential. However, after reading all the valuable content that we are going to give you below, your desire to search for yourself those projects that are most similar to the way you invest and your objectives in this market will surely increase.

the supply

Quantitative easing measures taken by different governments increasingly drive the need for people to protect their purchasing power from inflation. Especially in countries where national currencies are weak, investors need a means of protection for their capital in the long term.

Therefore, if your objective is to invest as savings and not as speculation, it is essential that the cryptocurrency in question has a limited supply. In addition, the more 'tokens' that are already in circulation over the total that will exist, the better.

The reason is very simple, with a stable or fixed supply, an increase in demand will always trigger the price. Limited or deflationary assets are always the ones with the best long-term prospects, as central bank printing of money continues to grow.

This is not to say that you can't get good returns from cryptocurrencies that don't have a limited supply, but it will always be wiser to invest long-term in a cryptocurrency where new coins don't continually appear. In this way it will be easier for the price to rise, not having to support the continuous increase in supply.

As you can see, basic economic knowledge will be very important to decide which cryptocurrency to invest in. Financial education is becoming more important than ever in this time that we have had to live and at the gates of a new paradigm in terms of the possibility of implementing a new financial system .

The sector to which it belongs

Not all cryptocurrencies have been created for the same purpose. In fact, these are very disparate, although there is great competition from projects that have similar objectives.

The difference between some projects and others lies mainly in their characteristics and the foundations that serve as an ideological guide for a given network.

There are different consensus algorithms and different ways to apply blockchain technology. The study of the characteristics of each crypto in terms of the following matters will be crucial to see if that crypto fits our investment profile:
  • consensus protocol
  • Governance system
  • Rules for creating nodes and their distribution
  • Network speed
  • scalability
  • Block Confirmation
  • Method of issuing new coins
Therefore, the characteristics offered by a cryptocurrency designed to serve as a private means of payment, for example, will not be the same as another designed for the creation of smart contracts.

The main recommendation in this regard is not to invest in more than one project that has similar objectives or characteristics. The ideal would be to choose which is the crypto that we like the most with respect to each sector and based on that, create a balanced portfolio.

Your work team

The creators and developers of a certain cryptocurrency are also a fundamental aspect to analyze when we consider which cryptocurrencies to invest in.

The reliability and reputation of the team in charge of developing the network is very important to have enough confidence to invest in a certain crypto. As we have mentioned before, investing in Altcoins is like doing it in shares of technology companies. In fact it is exactly that. For this reason, it will be essential that the team of professionals behind the project offer guarantees that they will be able to earn a place in the market

Sponsors and business partners

The support that a certain crypto has is also a very important aspect to take into account before investing. The security offered by those projects that have agreements with large companies is superior to those that do not.

Especially if a blockchain network plans to innovate in a certain market sector, it is highly recommended that it have support from companies that are leaders in that specific sector.

In the last section, where we will give a couple of recommendations following all these criteria, we will be able to give an example of this.

market capitalization

The total capitalization of a certain cryptocurrency in the market is another element that must be studied before knowing which cryptocurrencies to invest in for this and the coming years.

A cryptocurrency that is in the TOP10 of capitalization is not the same as one that has a much smaller total invested capital number.

In the first case, these are projects with a greater number and investors and that usually have a good reputation and are more stable. However, as with everything, there are exceptions.

On the contrary, in the second case, they are usually newer projects or projects that do not yet have a large community of investors. This can also be positive in a certain way, since the lower the capitalization, there is a greater margin of growth, but also the risk that must be assumed is greater.

In which cryptocurrencies to invest? recommendations

At this point, surely you really want to go to CoinMarketCap and start studying the different cryptos in search of the option that best suits your interests. To help you out, I am going to recommend two cryptocurrencies that I personally believe have a great future. Always keeping in mind that each one must carry out their own analysis and the characteristics that may be decisive for one may not be for others.

The first of these would be Cardano . It is one of the cryptocurrencies that has grown the most and has one of the most powerful technologies. It is also one of the main options for the realization of smart contracts and they have a limited supply. His commitment to the scientific method is the element that personally makes me lean towards this project and not other alternatives with similar characteristics.

The second recommendation would be Theta . This network has some very important partners and is called to be a benchmark in the world of decentralized 'streaming'. It is also in limited supply and has been created for a specific purpose, which will make it easier for you to position yourself in your particular market sector. In addition, its capitalization is small considering the possibilities of the project, so it looks very good in the long term.

With this we conclude this guide that we hope has been of great help to you. If you want to know which cryptocurrencies to invest in, never accept other people's opinions without first checking the information. Every investor has different capital goals and needs.

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