What Digital Assets Should Beginners Buy?
- Must-Read for Beginners
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The crypto market is full of risks and opportunities. If you're a beginner, you might be unsure how to invest and what to buy. Simply put, there are four main types of crypto assets. Choose based on your financial ability and risk tolerance.
1. Mainstream cryptos. They refer to cryptos whose market caps top the digital assets market. For example, BTC and ETH are the most popular mainstream cryptos, with the sum of their market caps accounting for over 50% of the digital assets market. They are generally recognized by the market and have relatively low investment risk. Both cryptos have an astonishingly high potential for growth. 10,000 BTC could only buy 2 pizzas in 2010, but the price of 1 BTC is now worth tens of thousands of dollars. Issued in 2015, 1 ETH was worth less than $1. However, the price of 1 ETH is now worth thousands of dollars. The market caps of both cryptos are over US$100 billion.
2. Public-chain coins. Typical public-chain coins usually have a high market value. They have many ecological projects and investors as public blockchains allow anyone to access them. With plenty of use cases and sound investment value, they are a relatively safe asset class. The top public-chain coins in terms of market cap are ETH, ADA, DOT, etc.
3. Stablecoins. The price of a stablecoin is pegged to 1 US dollar with little daily fluctuations. Risk-averse beginner investors who have a large amount of capital can buy them in large quantities during a price pullback, and stand to profit from them at a later stage. Major stablecoins include USDT, USDC, and DAI. These stablecoins have excellent liquidity and are easier to be bought or sold in the market. People usually use stablecoins to buy virtual assets.
4. Altcoins. These coins, especially those with low market cap, tend to fluctuate greatly in the short term, have a highly uncertain future, and have poor liquidity. They might be suitable for beginners with strong risk tolerance. Low cap coins are often accompanied by a high degree of hype. Rapid rises and plunges in prices are very common, and there is a risk that they will be worthless overnight. Beginners should exercise prudence when buying altcoins with low market cap.
Conclusion
Beginner investors like you might start your virtual asset investment journey by buying mainstream cryptos, such as BTC and ETH. You could also buy stablecoins like USDT, which are suitable for medium and long-term value preservation and hedging, similar to gold in traditional markets. Once you've experienced the trading process and price fluctuations of these two types of digital assets, you can try trading public-chain coins. After gaining a deeper understanding of the crypto market, you can then explore higher-risk altcoins.
