How do newbies allocate crypto assets?

Welcome to the BitMart podium: In this article, we will give a lecture on which crypto assets are suitable for new users to enter the market. As we all know, risk and return are directly proportional, and investments with high returns will naturally have many risks. In the world of crypto assets, the risk of investing in mainstream currencies is much lower than that of altcoins. Therefore, it is not difficult to understand that the investment income of some altcoins will be higher than that of mainstream currencies. Currency investments in different sectors have their own pros and cons, so which crypto assets are suitable for novices to buy? How to enter position management and psychological adjustment?

1. Understanding and selecting crypto asset types
After more than ten years of development, Bitcoin has evaded acceptance and recognition by investors. More and more users outside the circle have begun to understand Bitcoin and choose to enter the encryption world. After entering this festival, we found that not only Bitcoin As an investment target, investors also have hundreds of asset allocation options.

1. Mainstream coins
The crypto assets that rank at the top of the crypto market capitalization list are generally called mainstream coins. Mainstream coins are characterized by a large user base, good transaction depth, and a transcendent span of market activities. They have experienced the test of history and are transcendent. The ability to combat risks. General crypto assets are better and are generally recognized by investors as investment targets.
Therefore, for novice users who have just entered the market, it is relatively more suitable to allocate mainstream assets, such as Bitcoin, Ethereum, Litecoin, Ripple, etc. As the first encrypted asset, Bitcoin occupies half of the market value of all encrypted assets. Many old users will use its trend as the main reference for allocating other assets.
These mainstream currencies have relatively high market familiarity, relatively strong liquidity, and relatively low investment risks. They can be said to be a wise choice for new users to invest in crypto assets.

2. Altcoins
Relative to mainstream currencies, altcoins are based on blockchain technology and can be called “altcoins”. The vast majority of altcoins are renamed.
The word "shanzhai" in altcoin is not a derogatory term. It is also a crypto asset that uses blockchain technology and products. However, its market familiarity and liquidity are not as high as those of mainstream currencies. However, if it encounters high temperatures, Explosions will also have good performance, such as Meme coins that have been hotly speculated for some time, such as Dogecoin, Shiba Inu coin, etc., as well as DeFi concept coins and NFT concept coins, etc., which are all leaders of the craze in different time periods.
So, do altcoins have investment value? There are some opinions on this issue. Judging from the historical price trend of altcoins, their growth rate is more volatile. Therefore, time and the market will be needed to test it.
For new users, before investing in a certain altcoin, they should first understand what its essence is? Are there any application scenarios? What is your goal when investing in altcoins? Invest prudently within the scope of your own capabilities and risk acceptance.

2. Allocation of different crypto assets into different warehouses
For novice users who have just entered the currency circle, it is recommended to invest some of their idle funds. New users should try not to put their eggs in one cage when allocating funds, and learn to allocate crypto assets in different positions to reduce investment risks. Suppose you have 1,000 blocks of idle funds, then you can invest most of the funds in mainstream currencies, such as Bitcoin, Ethereum, etc. The period is lengthened. A small part of the deleted funds can be used to allocate altcoins. However, since the swings of altcoins are often relatively large, you need to pay attention to risk control. When you do not have a ten-foot handle and experience, it is not recommended to hold it for a long time. In fact, it The high risk hidden is not acceptable to all investors.

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"Don't put your eggs in one basket" actually has the second half, which is - "But don't put them in too many baskets." Asset allocation actually uses the risk differences between different assets to reduce the overall risk and reduce the true diversification of investment. What is important is the selection of investment platforms and differentiation of financial products, from the platform type, product type, investment period, expected return and other aspects. Go diversify your investments.
After understanding the allocation of crypto assets, new users also need to pay attention to the entry time. Choosing a better entry time can often lead to more benefits. If you have done enough homework, understood and understood the theory and value of crypto assets, then each new user of the market is suitable for extending the long-term investment cycle, and do not care about short-term fluctuations in exchange for greater returns; if you If you are a novice user who knows little about crypto assets and has only heard of popular coins such as Bitcoin and Dogecoin, then what you need is to understand the overall market trends and the historical price trends of the crypto assets you want to invest in, and at the same time, you need to be timely Get the latest news to assist your judgment, buy low, sell high, and earn profits based on market fluctuations. Of course, the market for crypto assets is highly volatile, and you need to pay attention to risk control.

3. Position management and psychological management
Every time there is a large market fluctuation in the crypto market, position management and psychological management are extremely important.

That is to preserve the principal, and the same is true for investing in crypto assets. When the market fluctuates greatly, our first goal is to preserve the principal, and then make a profit. Every investor needs to build a position management system of his or her own, and must remember to strictly stop losses. Many people know the method of adding positions with compound interest. This method is equivalent to abandoning position management, so this must be done at this time. To the absolute and strict stop loss, the result of neglecting it will be to lose everything.

In addition, mentality management is a point that many investors often overlook. Some investors who know all about the K-line can be said to be sane when analyzing trends or technical aspects, such as left trading, right trading, Fibonacci retrieval, etc. However, if they cannot do a good job in psychological management, then investors are extremely likely to fail. Two mistakes in judgment may cause a great sense of shock and self-doubt, and may even affect future investment and financial management for a long time. In the end, humans are not gods and cannot make every judgment accurate. , you can also quickly collect good moods and regroup. Mood management can make investors and traders more trustworthy in transactions.

Good mentality management includes thinking about risks, accepting risks, resisting FOMO emotions, eliminating illusions, managing return expectations, etc. The ancients said, "A general will be fooled before he will win, so he can fight a hundred battles without danger." On the contrary, not accepting risks means avoiding risks, and the consequences may be disastrous. For example, investors who like to avoid risks tend to have FOMO emotions when the market trend is good, that is, they see a certain crypto asset rising continuously and the product chases the rise. This kind of target buying does not analyze the market. The trend is likely to make investors sigh when the crypto asset declines.

Conclusion: As a novice user who is about to enter the market or has already entered the market, you must not only comprehensively review mainstream currencies like Bitcoin, but also have an in-depth understanding of the use and value of other blockchain projects. When you look at the value of blockchain projects, such as the popular DeFi, NFT, Polkadot and other sectors, then you will be more willing to invest, and your understanding of risks and the position of stop-profit and stop-loss will be clearer. Of course, just like investing in other products, there are also risks involved in crypto asset investment and non-profit making, so investors need to pay attention to position management and psychological management, and reasonably control risks.