What Do Newcomers Need to Consider When Choosing A Cryptocurrency to Invest in?

Due to Covid-19 and the market downturn, many investors have been hit in the real economy. Even so, crypto asset investments have become popular nowadays, not only cryptocurrency asset investments but also NFTs, Metaverse, and gaming in many ways.

Still, investing is not easy. Stories of overnight riches from crypto investments can be heard occasionally, and losses due to poor investments are commonplace. It is even more important for newbies to be cautious when making cryptocurrency investments. Because newcomers do not have a good understanding of the cryptocurrency market or possess a high tolerance for the volatility of the cryptocurrency market. What do newbies need to consider when choosing cryptocurrencies to invest in? Read on to find out.

BTC and ETH Are The Wind in The Sails of The Entire Cryptocurrency Market

BTC is the Preferred Underlying for Cryptocurrency Trading

As the originator of the entire cryptocurrency market, BTC has always determined the bull and bear movements of the entire cryptocurrency market. The entire cryptocurrency trend is strongly correlated with the market trend of BTC. Recently, as the price of Bitcoin has rebounded to nearly $30,000, many investors have started to become active and invest through the Gate.io cryptocurrency exchange.

Therefore, when choosing a cryptocurrency to trade, it is the consensus of all crypto asset players to prefer BTC. The following chart shows the trend of BTC’s market share.

ETH Is The Weather Vane for Cryptocurrency Quotes

ETH has long been ranked second in the cryptocurrency market capitalization chart, with a market share of 20%. ETH’s market trend is positively correlated with BTC, and due to Ether’s status as the world’s #1 public chain, it has a large and prosperous application ecosystem, covering almost all crypto asset track segments such as Defi, NFT, Gamefi, Metaverse, etc. While ETH follows BTC’s trend, its ups, and downs, it has at times reached higher than BTC in the same period, while ETH is also the wind vane of the cryptocurrency market. This shows that the trend of Ethereum prices is also quite important, and investors can check the latest Ethereum price changes in real-time on Gate.io for subsequent investment and trading.

Factors to Consider When Choosing a Cryptocurrency to Trade

Market Capitalization

Market capitalization is an important indicator of the merits of a cryptocurrency project, with higher market capitalization indicating more users holding the asset and a better market consensus. All things being equal, a higher market cap is better than a lower market cap, and a higher market cap indicates a more stable asset price that is more volatile in the face of extremes, which significantly reduces the risk of an extreme blowout for contract trading.

The market capitalization of 1400+ cryptocurrencies can be accessed via the Asset Tool on the Gate.io cryptocurrency exchange, which is the method of choice for most investors.

24-Hour Trading Volume

In crypto trading markets, liquidity is crucial. A highly liquid market means better asset pricing, less market volatility, easier trading, less slippage, and when reflected in technical indicators, more accuracy.

So how do you measure how liquid a cryptocurrency is? There are three main core indicators: to look at intraday spreads, depth of trading, and trading volume. One of the core indicators is 24-hour volume, which is the default ranking of pairs in the U-position perpetual list, from highest to lowest 24-hour volume. From this point of view, the top-ranked pairs are the preferable ones.

Market Heat & Volatility

The crypto market is categorized by concept, with tracks such as Defi, NFT, Metaverse, Gaming, Storage, Boca, etc. There are themes of market hype on different topics. This manifests itself in the market sentiment as the price rises and falls causing investors to chase the ups and downs, and these types of assets are often better quality trading targets. Therefore, assets with large 24-hour price fluctuations on the trading pairs list need to be focused on.

Conclusion

The current cryptocurrency market has gradually started to pick up and more investors are becoming active investing. Generally speaking, BTC and ETH are the preferred crypto targets for traders, followed by the best pairs filtered by trading volume, and upside and downside. The leading coins in each concept sector can also be focused on. Although crypto investment is a hot topic, newcomers need to be more cautious when joining.